Everything you should know about the cryptocurrency Dogecoin
Like Bitcoin or Ethereum, Dogecoin is a cryptocurrency, albeit it is fundamentally distinct from both of these well-known currencies. Dogecoin, which derives its name from a once-famous meme, was first developed at least in part as a humorous prank for cryptocurrency fans. Despite its peculiar history, Dogecoin has had a meteoric rise in popularity in 2021; at the time of writing, it is the fifth-largest cryptocurrency by market valuation.
The cryptocurrency Dogecoin, which was first created as a joke, has seen a significant increase in market value following tweets from Tesla CEO Elon Musk and artist Snoop Dogg. The WSJ examines the factors driving internet investors to invest in the meme-inspired virtual currency.
The new Bitcoin is Dogecoin. Perhaps it’s too soon to say, but Dogecoin might become the cryptocurrency of 2021 within the next few months. It’s already on track and has had a significant upswing since the beginning of the year. Since January 2021, Dogecoin has returned about 1900%. You did read that correctly. One coin used to just be worth a penny, but the current increase has raised its value to $0.122680, or roughly 12 cents. That’s amazing for a virtual currency that was first created as a joke. Soon, we shall reach to that section.
The cryptocurrency increased dramatically, according to a report posted on Tuesday by the financial market news website Benzinga.
since the beginning of 2021, to around 1,900%. Given that Bitcoin had a rise of 117.47 percent within the same time period, the increase is noteworthy. Yes, Bitcoin has advanced significantly and is predicted to be the cryptocurrency that will shape the future, but Dogecoin’s potential influence cannot be discounted.
Dogecoin was developed by software developers Billy Marcus and Jackson Palmer in late 2013. Palmer used a joke from the era that contained the purposefully misspelt term “doge” to refer to a Shiba Inu dog to brand the cryptocurrency’s logo.
According to Pat White, the CEO of Bitwave, “Doge was actually launched to poke fun at Bitcoin.” In the beginning, a group of supporters planned marketing events to increase awareness of Dogecoin, including raising money to sponsor a NASCAR driver or send the Jamaican Bobsleigh squad to the 2014 Olympics.
On Reddit’s WallStreetBets message board, which was the main driving force behind the GameStop incident in January, Dogecoin attained cult status in early 2021 with devotees promising to drive its value “to the moon” (that was before all discussion of crypto was banned on the subreddit).
Given its recent price explosion and gain of more than 5,000% in 2021, Dogecoin is no longer a joke. Tesla CEO Elon Musk, who cited Dogecoin as his preferred cryptocurrency, is one of its supporters. Additionally, Musk referred to Dogecoin as the “people’s cryptocurrency” and pledged to place a real-world Dogecoin token on the moon.
Like Bitcoin and Ethereum, Dogecoin is a cryptocurrency that utilises blockchain technology. All transactions done with a decentralised digital currency are recorded in blockchain, a distributed, secure digital ledger.
The Dogecoin blockchain record, which is frequently updated with all fresh transactions in the cryptocurrency, is carried by every owner in an exact duplicate. Dogecoin’s blockchain network secures all transactions using encryption, much as other cryptocurrencies.
A “proof of work” technique is used by people known as miners to process transactions and log them on the Dogecoin blockchain by using computers to solve difficult mathematical problems. Miners receive more Dogecoin in return for processing transactions and maintaining the blockchain record, which they may then keep or trade on the open market.
Although Dogecoin may be used for transactions and purchases, it is not a particularly good way to hold wealth. This is mostly due to the fact that there is no limit on the total amount of Dogecoins that can be produced through mining, making the cryptocurrency very inflationary by design. It is extremely difficult for speculative price increases in Dogecoin to last over time since the blockchain compensates miners for their labour by generating millions of new Dogecoins every day.
On a cryptocurrency exchange like Binance or Kraken, you may purchase Dogecoin. You must create and fund an account with US cash or cryptocurrency on the exchanges. Following that, you’ll be able to swap and acquire cryptocurrencies, including Dogecoin. It’s noteworthy that popular cryptocurrency exchange Coinbase does not permit purchases of Dogecoin.
You may purchase Dogecoin through certain online brokers, like as Robinhood and TradeStation, in addition to more traditional assets like stocks, mutual funds, and bonds. Compared to exchanges, they don’t provide as many coins, however Dogecoin is usually accessible.
As with other cryptocurrencies, it is preferable to transfer your Dogecoin funds to a crypto wallet as soon as you have done so. Wallets come in a variety of shapes and sizes, including apps for mobile devices, physical hard drives, and internet services provided by exchanges like Coinbase (you cannot purchase Dogecoin on Coinbase, but you may keep it there). The wallet is protected with a personal password. Your coins are stored separately from an exchange, adding an additional degree of security against hackers.
You used to be able to earn free coins for completing easy activities online before Dogecoin became popular and skyrocketed in price.
C. Neil Gray, partner in the fintech practise areas at Duane Morris LLP, stated that for many years, you could complete chores at Dogecoin “faucets” to earn Dogecoin instead of purchasing it. Tasks like watching a commercial or completing a survey were among them. It’s becoming harder and harder to locate any that function recently.
A Good Investment: Dogecoin
There is virtually little incentive to retain Dogecoin for the long term because there is no lifetime cap on how many Dogecoins may exist and millions of fresh Dogecoins are placed onto the marketplace every single day. Due to the system’s lifetime restriction on the amount of coins that may be issued, Bitcoin’s value keeps increasing.
Doge, according to White, “truly is more like DASH or Bitcoin Cash and less like Bitcoin, where the explicit objective is a spending money.
Dogecoin has historically had an extremely low value per coin, hovering around $0.003 per coin for the most of 2020, making individuals more willing to give them away. Dogecoin may be used by users on social media sites like as Reddit, Twitter, Facebook, and others to “tip” one another for publishing content.
The improvements in Dogecoin that have been observed in 2021 could not be long-term viable. We’ll have to wait and see if the cryptocurrency’s culture of tipping and giving persists.
Elon Musk like ridiculous things, and Dogecoin is certainly silly, so you can see where this is headed. Musk, the CEO of Tesla and SpaceX, has frequently shown his appreciation for Dogecoin, primarily via tweets. His comments frequently drive the price of Dogecoin to all-time highs; at one point, the price increased by more than 100% as a result of a Musk tweet.
Those that purchased Dogecoin at the beginning of 2021 have profited greatly. White is still a little hesitant to purchase Dogecoin, particularly as an investment. The value of the coin was continuously under pressure due to the steady influx of new coins into the market.
Dogecoin poses greater security dangers than other well-known cryptocurrencies, according to White. It just hasn’t undergone the same amount of security and code inspection as Bitcoin or Ethereum. Additionally, Doge doesn’t have a very large mining community, so the vulnerability to a mining-level assault is much higher than it would be for a currency like Bitcoin.
Purchasing any kind of cryptocurrency, including Dogecoin, entails risk. It’s always worthwhile to purchase a few coins and get acquainted with the system, but it’s definitely advisable to avoid investing more than a small portion of your hard-earned cash in a cryptocurrency that was initially created as a joke.
Every person wants to get entertainment, every person likes sports, some person likes to watch,…