Is A Dogecoin Investment Worth it? Check out the Highs and Lows

Dogecoin is one of the few cryptocurrencies that hold a meme status but also proved people wrong about its value. Many investors consider Dogecoin a poor investment while still investing in the cryptocurrency, why is that? Why is Dogecoin investment so tricky? Well, let’s find out.

Dogecoin Overview

Jackson Palmer, an Adobe engineer, and Billy Markus, an IBM software developer, launched Dogecoin (DOGE) on Dec. 6, 2013. The DOGE cryptocurrency was created as a slap in the face to an industry that they felt had become overly profitable.

Doge, a misspelled use of “dog,” is remembered by cryptocurrency users as the internet meme representing the Shiba Inu Japanese dog breed with its multicolored text in Comic Sans font, as well as questionable English grammar.

To create Dogecoin, the creators used code from Litecoin’s fork of the Bitcoin blockchain, which is now known as Dogecoin. A fork occurs when a community alters the blockchain’s protocol or fundamental set of rules. This causes the chain to split, creating a second blockchain with the same history as the first but in a new direction. 

However, its value has since increased and attracted more serious attention, making it the “fun” version of Bitcoin (BTC). Because of celebrities like Elon Musk and Snoop Dog, Dogecoin’s value has risen. It was reported that a popular cryptocurrency platform would accept Dogecoin, which gave the currency a boost.

Because of the increasing popularity of Shiba-Inu-themed cryptocurrencies, it’s interesting to learn how they got their start. A look at Reddit and Tumblr comments in 2013 reveals why the DOGE coin became so popular among meme enthusiasts.

According to Jackson Palmer, Doge’s creator, the cryptocurrency industry gained a human face. Dogecoin, on the other hand, offered a new and clearer image of a cryptocurrency that was free of the negative connotations associated with Bitcoin, such as money laundering and drug purchases. 

Due to several charitable initiatives that quickly entered the Reddit space in 2014, it was quickly the currency of “generosity.”

Is it Worth it?

A Dogecoin is only worth what someone else is willing to pay for it, just as with Bitcoin and precious metals like gold and silver. For some reason, Shiba Inu meme coin collectors are willing to pay a lot of money for it.

The price of Dogecoin is not determined by the underlying technology, but rather by the cultural significance of the currency.

Dogecoin has somehow managed to unite people around the world in pursuits of money, laughter, and connectedness during the Robinhood-GME-Twitter pandemic era.

It’s now possible to buy your Dogecoins for the low price of $0.15 or even less and join a worldwide movement. The true measure of a cryptocurrency’s value is its market capitalization, not its price per token. Dogecoin’s low per-coin price is due to its high circulating supply.

Since the beginning of 2017, Dogecoin has surged by more than 2,000 percent three times. That’s a characteristic of its own. There is still a billion-dollar question to be answered. Nobody is entirely certain, to be honest. 

You would have been sent to the psychiatric ward in 2017 if you suggested $1 dogecoin, but now it’s all the rage on Twitter.

Pros and Cons of Investing in Dogecoin

With this being said, Dogecoin is still a cryptocurrency and it does bring some things to the table despite its “meme” status. It has its own set of advantages and disadvantages that you should consider before you decide on investing in it.

Pros

Growing Community

Dogecoin’s growing community of supporters and holders is one of its major advantages. Cuban and Mark have previously stated that its growing user base makes it a suitable medium for trading. An important factor contributing to its growing popularity is the fact that investors view it as an absolute value. 

Additionally, these investors are very active on social media, where they post crypto-themed memes to spread the word about the currency.

Dex Compatability

Decentralized exchanges are a viable means of transacting and trading DOGE. There have been significant advancements in the Ren project that have allowed it to run on both Ethereum’s blockchain and also give it access to the decentralized financial network. Doing so shows that DOGE is compatible with the decentralized finance movement in the cryptocurrency market.

Unique Position

Several investors consider DOGE unique because of its inflationary status, unique mining feature, and ties to Litecoin. As a result of this, Dogecoin’s mining model relies on proof-of-work, which necessitates solving complex computational problems to verify transactions on its blockchain.

Easy to Use

Dogecoin is similar to Bitcoin in many ways, and as a result, it offers some of the same advantages. The coding of the crypto is very similar to that of Bitcoin, making it more secure and easier to use. The Dogecoin mining pool is also unrestricted. Investing in Dogecoin, whether for the short term or the long term, has never been easier.

Cons

It has no supply capitalization

Dogecoin’s lack of a supply cap is one of its main drawbacks. Cryptocurrencies with no supply limit are therefore unsuitable as inflation-hedging instruments. The infinite mining of DOGE will eventually necessitate even larger-scale blockchain mining operations. In addition, because it employs a proof-of-work mechanism, it will be able to support the ever-increasing volume of transactions.

Lack of support

Despite the growing number of users and supporters, technical support for Dogecoin is lacking. In comparison to Bitcoin, Ethereum, and Cardano, DOGE’s development team is not nearly as large. DOGE hasn’t made any technological advancements or changes in over a year. Aside from the fact that its technology is not unique, this is an important point to make.

Lacks Transactional Power

Dogecoin can only be used as a digital currency (for now?), unlike other currencies like Tronic and Ether, which can be used for transactions. The market value of cryptocurrencies like Bitcoin, Litecoin, Dash, and Bitcoin Cash is greater than that of DOGE.

Elon Musk and Dogecoin

There can be no doubt that successful marketing campaigns and connections with social media influencers and celebrities have a significant impact on the success of meme coins like Dogecoin.

As an important investment tool, Dogecoin is widely accepted by exchanges and frequently included in institutional investment portfolios. Celebrities like Snoop Dogg, Gene Simmons, and Elon Musk, who have been tweeting about cryptocurrency since early 2019, are a big part of the reason why the price keeps rising.

While Elon Musk first made light of the idea that he served as the CEO of Dogecoin in a series of tweets, he has since appeared to take the position more seriously and is currently collaborating with Dogecoin developers to improve the system’s transactional efficiency.

When Elon Musk tweeted about DOGE’s development, the software programming process had been in a state of limbo for quite some time.

Existing DOGE developers like Ross Nicolls, who has been working on the project for a while, became concerned about scaling issues as the cryptocurrency became more popular for trading and tipping.

Even though Dogecoin’s software has been built on top of Bitcoin’s since 2014, it’s still closely linked to the Bitcoin Core project because it’s an indirect fork of it. Dogecoin’s developers had to catch up on several Bitcoin Core releases since DOGE’s last update in 2014 because the decision was made to tie Dogecoin to Bitcoin Core.

Multisignature wallets are used by Dogecoin developers to access a community-donated developer fund. A multi-signature wallet can be used to increase the security of a device when multiple private keys are needed to sign and send a transaction.

Conclusion

In conclusion, Dogecoin should be a bad investment on paper. But because of its meme status and the unpredictability of the cryptocurrency market, this meme coin was able to garner a rise in value over the years. 

Dogecoin investment is special thanks to its interesting position, many argue that it is a bad investment and they have well-reasoned points for that. However, people will keep on investing in this cryptocurrency because of celebrity endorsements and because some just find it funny. Who knows? Maybe Dogecoin will keep on surprising us, the crypto market is volatile after all.

* 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.