Introductory Guide To DOGE: Things To Know About DOGE

What is Dogecoin? If you’ve been an avid follower of memes for the last 10 years then it’s highly unlikely that you haven’t seen “Doge”, the adorable Shiba Inu who makes this really funny face. For those who don’t know, “Doge” has her very own cryptocurrency named after her called dogecoin.

What is Dogecoin?

Dogecoin (DOGE), a cryptocurrency based on the Shiba Inu emblem, was created in 2013 as a lighter alternative to Bitcoin (BTC). You may have seen the name and emblem of a popular Japanese dog breed called the Shiba Inu popping up on social media. 

Dogecoin, on the other hand, was designed to be indefinitely plentiful, with 10,000 new coins being mined every minute and no cap on the total number of coins ever created. Dogecoins.

Because of its poor initial market value, Dogecoin was mostly dismissed in 2013 as little more than a harmless internet joke. Even though each Dogecoin is worth only a few cents, CoinMarketCap rates Dogecoin as one of the top ten most valuable cryptocurrencies on the planet. 

Because there are so many Dogecoins floating around, it’s hardly surprising. Like Bitcoin, Dogecoin is prone to price inflation because it was created to be freely available. Currently, there is 130 billion DOGE in circulation, with 10,000 new coins being mined per minute, or one billion DOGE each second, in new currencies. 

During that time only 12.5 Bitcoin (BTC) are being mined every 10 minutes, even though there are around 19.4 billion BTC in circulation.

Dogecoin was launched in 2009 as a low-risk alternative to Bitcoin. Plenty is the keyword here. DOGE immediately garnered an enthusiastic online community after its release in late 2013, with users using the cryptocurrency to thank strangers for pleasant Reddit comments to sponsor the Jamaican bobsled squad during the 2014 Winter Olympic Games in Sochi.

Why is it Valuable?

The value of DOGE is determined by supply and demand, just as it is for any other type of investment. Demand has to increase dramatically as a result of the abundant supply for prices to climb as much as they have in recent months.

When retail investors on Reddit (especially those on the wallstreetbets subreddit, which was at the center of the “meme stock” frenzy) banded together to drive prices higher in the first few months of 2021, prices soared by around 7,000 percent. 

During his visit on Saturday Night Live in May 2021, Elon Musk, the inventor of Tesla, was able to capitalize on the broader cryptocurrency boom and months of seemingly tongue-in-cheek tweets.

For some time, increased media coverage and social media posts about the quickly increasing price of DOGE in 2021 created a cycle that attracted other investors and resulted in further price hikes. 

When an asset has such significant gains, new traders enter the fray out of a sense of “fear of losing out” (FOMO). There is no assurance that the value of DOGE will climb or decline shortly, just as there is with any other investment.

How does it Work?

In the same vein as Bitcoin and Ethereum, Dogecoin operates on the blockchain. Decentralized digital currency transactions are stored in a distributed, secure digital record known as the blockchain.

The Dogecoin blockchain record, which is frequently updated with all new transactions in the cryptocurrency, is carried by every Dogecoin holder. Dogecoin’s blockchain network, like other cryptocurrencies, uses encryption to ensure that all transactions are safe.

To execute transactions and record them on the Dogecoin blockchain, people called miners utilize computers to solve complicated mathematical problems. This is known as a “proof of work” mechanism. Dogecoin miners receive more Dogecoin in exchange for processing transactions and supporting the blockchain ledger.

Because of this, Dogecoin isn’t a good long-term investment vehicle. Because there is no limit on the number of Dogecoins that may be mined, the cryptocurrency is designed to be extremely inflationary by default. This makes it extremely difficult for Dogecoin’s speculative price gains to hold up over time because the blockchain rewards miners by creating millions of new Dogecoins every day.

History of Dogecoin

Adobe Inc.’s Sydney, Australia, product manager Jackson Palmer created Dogecoin in 2013 as a parody of the cryptocurrency craze. “Skeptical-analytic” is how Palmer has been described, and his first tweet about his new cryptocurrency venture was a joke. After receiving encouraging feedback on social media, he purchased the domain name dogecoin.com for his project.

Meanwhile, in Portland, Billy Markus, an IBM software developer who wanted to create a digital currency but was having difficulty advertising his efforts, discovered the Dogecoin buzz. For the development of a real Dogecoin, Markus contacted Palmer and requested authorization.

As with Litecoin, Markus initially employed a randomized payout for block mining but switched to a static reward in March 2014 after learning about the success of Luckycoin, another Litecoin offshoot. A Proof-of-Work (PoW) coin, Dogecoin employs the Scrypt algorithm developed by Litecoin.

Many cryptocurrencies rely on Proof of Work (PoW) to provide safe, decentralized consensus.

On December 6th, 2013, Palmer and Markus officially unveiled the coin. On December 19, two weeks later, Dogecoin’s value had increased by a whopping 300%, possibly as a result of Chinese banks being prohibited from investing in cryptocurrencies.

When Dogecoin launched, it advertised itself as a “fun” version of Bitcoin, complete with a Shibu Inu logo. With Dogecoin’s laid-back presentation, the emerging crypto community was perfectly in sync. A speedier, more nimble, and more user-friendly form of Bitcoin was argued for by its scrypt technology and limitless supply.

A “deflationary coin” like Dogecoin has no limit on the number of coins it may make, but an “inflationary coin” like Bitcoin can create an infinite number of coins. Mining rewards are halved every four years, and the pace of inflation is halved as well until all Bitcoins are released into circulation.

To help the Jamaican bobsled squad travel to the Sochi Winter Olympics, the Dogecoin community donated 27 million Dogecoins in January 2014.

In March of that year, the Dogecoin community donated $11,000 to build a well in Kenya and $55,000 to sponsor NASCAR driver Josh Wise with Dogecoins worth of.

Dogecoin had a $20 million market worth and a devoted following by the time it turned one.

It was in 2015 that Dogecoin’s lightheartedness began to wane as the cryptocurrency community as a whole became increasingly serious. Initial indications that Dogecoin wasn’t doing well came from Jackson Palmer’s resignation, who claimed that a “toxic environment” had sprung up around Dogecoin and the money it was making.

Moolah co-founder Alex Green was a member of that toxic subculture, and he founded the exchange. When Alex Green (his pseudonym) paid $15,000 to the NASCAR fundraiser instead of $1,500, he became a household name in the neighborhood.

It was then revealed that Green had used the money he received to acquire over $1.5 million in Bitcoin, which he then spent on an extravagant lifestyle. Green’s exchange had persuaded members of the community to contribute huge sums to assist support the establishment of his exchange. In addition, Kennedy was sentenced to 11 years in jail in 2016 for several rape convictions.

Dogecoin in Recent Years

The value of Dogecoin rose and fell with the rest of the cryptoverse during the bubble that peaked at the end of 2017.

A new record was set for Dogecoin’s market value in 2017 and 2018 as it crossed over to $1 billion for the first time.

In the summer of 2019, Dogecoin and the rest of the crypto market saw another rise in value. Fans of Dogecoin rejoiced when Binance listed the coin, and some even assumed Elon Musk, CEO of Tesla, Inc. (TSLA), had given his endorsement to the coin in a cryptic tweet.

In May, Tesla CEO Elon Musk tweeted that he was working with Dogecoin’s creators to increase the efficiency of transactions. SpaceX’s founder asked on social media earlier this year whether Tesla could take Dogecoin as payment. For digital gift card transactions in December, AMC Entertainment Holdings, Inc. (AMC) announced in October that it would accept Dogecoin, a meme-based cryptocurrency.

Dogecoin had a market capitalization of $31.9 billion as of Oct. 8, 2021, up from a ranking of 48 and a market value of $339 million a year earlier.

Is Dogecoin Worth Investing in?

Pat White, CEO of Bitwave, recalls how Doge had begun to make fun of Bitcoin. Dogecoin’s early days were marked by publicity stunts, such as raising cash to send the Jamaican Bobsleigh squad to the 2014 Winter Olympics or sponsoring a NASCAR driver.

Since the quantity of Dogecoins that can ever exist is unbounded and millions of fresh Dogecoins are released onto the market every day, there is little need to hold onto the cryptocurrency for the long term. Because of the lifetime cap on the number of coins that may be issued by the system, Bitcoin’s value continues to climb.

Compared to Bitcoin, “Doge truly is more like DASH or Bitcoin Cash, where the express objective is a spending money,” explained White.

Dogecoin’s per-coin value has historically been extremely low, hovering at $0.003 for the majority of 2020, making it more attractive for people to give them away. Dogecoin may be used to “tip” each other on social media networks like Reddit, Twitter, and Facebook, according to Gray.

“Dogecoin’s 2021 gains won’t hold up in the long run. We’ll have to wait and watch if the cryptocurrency tipping and donation culture persists.”

People that bought Dogecoin at the beginning of 2021 have received a lot of value for their money. Even so, White is cautious about investing in Dogecoin, particularly as a long-term strategy. The value of the coin plummeted due to the steady influx of new coins into the market.

Additionally, he warned that Dogecoin posed additional security dangers than other well-known cryptocurrencies. As a result, it hasn’t been subjected to the same amount of security and code-level scrutiny as Bitcoin or Ethereum. There isn’t a large mining community for Doge, thus the risk of a mining-level attack is much higher than for Bitcoin.”

Dogecoin, like any other cryptocurrency, carries a degree of risk. To learn about the system, it’s a good idea to buy some coins and get a feel for how it works—but it’s best not to invest more than a tiny amount of your hard-earned money in a cryptocurrency which began as a joke.

In the end, it’s up to you to decide whether it’s worth it or not because the cryptocurrency market is very volatile and no one can accurately predict how it’s going to go.

Conclusion

To conclude, Dogecoin started as a joke but it’s quite valuable and it has a lot of potential to it. The cryptocurrency market is, after all, volatile and unpredictable. Hopefully, this article helped you understand what is Dogecoin and why people find it funny.

* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.