A cryptocurrency that started as a joke in 2013 has become a popular ‘meme coin’ gaining much recognition by each passing day. Elon Musk never stops tweeting about his favourite crypto making Dogecoin cross the 10 cents mark in mid-April. The coin has a Shibu Inu mascot image which has slowly got a remarkable volume in top crypto exchanges worldwide. Moreover, many top experts believe that the market cap of Dogecoin can reach a trillion shortly which means, Dogecoin can trade between $7 to $8. Although Dogecoin has many positive signs for the future, risks related to it must not be overlooked by investors at the same time.
Dogecoin, also known as DOGE is an open-source, peer-to-peer cryptocurrency. The coin is also regarded as an altcoin and is sarcastically a meme coin. Dogecoin has a Shibu Inu dog logo while its primary technology is derived from Litecoin. Some of the basic features of this meme coin are: the coin uses a scrypt algorithm, unlimited supply potential and low price.
The History of Dogecoin
Dogecoin was created by a product manager in Sydney based Adobe Inc. named Jackson Palmer. The coin was launched in 2013 as a satiric hype in the name of cryptocurrency. This made Palmer known as a ‘sceptic analytic’ and a keen observer of the latest technology while his new creation tweets were taken as a joke. Though, he got attention in social media so he bought a domain in the name dogecoin.com.
Another software developer in IBM Portland named Billy Markus also wanted to develop a digital currency but found difficulties in promoting them. He discovered dogecoin buzz and reached to Palmer to get his permission and build his software around dogecoin.
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The Dogecoin code of Markus of Luckycoin was derived from Litecoin and was initially used as a random reward for block mining. This was a new change seen in static reward in 2014. Dogecoin since then is a proof-of-work coin and uses Litecoin script technology. When Markus and Palmer combinedly launched the coin in December 2013, the value of the coin jumped 300% just after the two weeks.
Controversies related to Dogecoin
The coin which started as a joke lost its charm in 2015 when the crypto community showed serious interest in the market. The first bad sign for Dogecoin was the departure of Palmer after commenting that a ‘toxic community’ grew around the coin to produce more money. One of the members belonging to that toxic community was Ryan Kennedy or Alex Green who created a Dogecoin exchange Moolah. Alex Green was known as a lavish tipper in the DOGE community who mistakenly gave $15,000 to a NASCAR fundraiser instead of $1,500.
The exchange made by Green convinced its community members to donate large money to support the charity from the exchange funds. Though, it was later found that the money he used like donations were worth more than $1.5 million Bitcoin that was used by him for living a lavish life. Green was convicted individually in multiple courts for rape cases and sentenced to 11 years in prison.
What Drives Dogecoin price?
Like most other cryptocurrencies, Dogecoin is highly volatile and prone to large dips. Unpredictable market movements and powerful events mean long-term investors have to invest in a well-chosen stock that can likely deliver a decent return and as per their analytical predictions. However, Dogecoin has gained its buying and selling tendency from a meme incarnation which makes it different from the others. Although being a meme coin, it has some significant capabilities which shifts it to a potential medium of the stock exchange.
Why can the Dogecoin price go to the moon?
In the longer run, we have seen Dogecoin has retained its value even being through a roller-coaster ride. All the cryptocurrencies are rising for the past few weeks and Dogecoin is no exception to it. This is the reason it is often valued more than Bitcoin and even the entire crypto market during the accent since Dogecoin price has hovered in between $0.30 to $0.40 for a week. The stability was seen even though overall trading volume reduced sharply in major exchanges.
Dogecoin is more advantageous than Bitcoin particularly for young demographics or crypto enthusiasts who like bulk purchasing. The low electricity used to mine and utilise DOGE as compared to BTC can boost its attractiveness specifically among the environmentalists. While Bitcoin uses 707 kilowatts per hour, Dogecoin uses only 0.12 kilowatt of electricity in every transaction.
One concern associated with Dogecoin is that there is no limit on the number of Dogecoin which can be mined as compared to Bitcoin’ hard cap. However, the maximum number of Dogecoin that can be mined in a year is capped at 5.26 billion. Presently 129 billion coins are in circulation that has somehow capped the mining rate and ensures that the Dogecoin inflation rate gains stability over time providing an incentive to mine it continuously.
Why is Dogecoin winning wider acceptance?
Like many other crypto coins, Dogecoin is gaining wider acceptance like a medium of exchange. Many small businesses have now started using DOGE as a form of payment without impacting the economy negatively. Though, some large entities have also accepted DOGE such as NBA Dallas Mavericks which means, the customers can buy merchandise and tickets with the help of BitPay.
5 interesting facts about Dogecoin
- Dogecoin gained inspiration from Lucky Coin since both of them used SCrypt language. To make it look funnier, its founders added a strange feature through which miners could either get zero or a large number of coins to produce new blocks as rewards. However, this feature was changed later and made limited to 10,000 to look feasible.
- Dogecoin is circulated in large numbers in the crypto exchange. To date, every day 10,000 new DOGE is released in Block rewards making 5.2 billion coins mined every year.
- The mining process of Dogecoin is very swift. More than 98.9815 Dogecoin can be easily mined per day. The coin uses script encryption which can be harvested quickly as compared to other cryptocurrencies.
- Dogecoin fan following does not restrict to crypto traders only but to entertainers and business tycoons. Some of the loyal fans of DOGE include Elon Musk, Snoop Dogg, Gene Simmons and Kevin Jonas. Many social media applications like Twitter and Reddit accepted Dogecoin in its initial days.
- Tesla CEO Elon Musk is like a flag bearer of Dogecoin who does not forget to tweet about the coin on his social media accounts frequently. He is so active with Dogecoin related tweets that have made DOGE an attractive prospect for new and existing crypto traders.