What is Dogecoin? And How Does It Work? All you need to know about this cryptocurrency.
There was a time when one Dogecoin was worth less than a cent, but the recent surge has taken its value to $0.122680 or almost 12 cents.
Dogecoin is a cryptocurrency invented by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system that is instant, fun, and free from traditional banking fees. Dogecoin features the face of the Shiba Inu dog from the “Doge” meme as its logo and namesake.
- Dogecoin has seen a surge in value recently.
- It has given 1900 per cent returns in 2021.
- Dogecoin was found as a joke in 2013.
- Dogecoin is an open-source peer-to-peer digital currency
- “Doge” is our amusing and friendly mascot!
- Dogecoin has one of the most active and largest communities in the cryptocurrency world.
- Unlike Bitcoin, Dogecoin has no upper limit, which means there are actually more than 100 billion dogecoins in circulation.
What is Dogecoin?
Software engineers Billy Marcus and Jackson Palmer created Dogecoin in late 2013. Palmer branded the cryptocurrency’s logo using a meme popular at the time that featured the deliberately misspelled word “doge” to describe a Shiba Inu dog.
“Doge was really started to poke fun at Bitcoin,” said Pat White, CEO of Bitwave. In its early days, a community of enthusiasts arranged publicity stunts to raise Dogecoin’s profile, gathering funds to send the Jamaican Bobsleigh team to the 2014 Olympics, for instance, or sponsoring a NASCAR driver.
In early 2021, Dogecoin gained cult status on Reddit’s WallStreetBets message board—the prime instigator behind the GameStop affair in January—where enthusiasts had promised to propel its value “to the moon” (that was before all discussion of crypto was banned on the subreddit).
Today Dogecoin is no joke, having exploded in value and gained more than 5,000% in 2021. Among its boosters is Tesla CEO Elon Musk, who called Dogecoin his favorite cryptocurrency. Musk also named Dogecoin the “people’s crypto,” and promised to plant a physical Dogecoin token on the moon.
Dogecoin vs. Bitcoin
While Dogecoin’s size is nowhere near Bitcoin, the ‘joke’ currency’s market cap has been catapulted from over $1 billion during early January to $47 billion on Saturday, as per CoinMarketCap. Created in 2013 by software engineers Jackson Palmer and Billy Markus, Dogecoin was intended to make fun of all the crypto craze that time led by Bitcoin. The currency took its name and logo from a famous 2013 meme called Doge that featured the image of the Japanese dog breed Shiba Inu accompanied by multicolored text that represented some sort of inner monologue by the dog. Despite years after the meme was created, Dogecoin continued to be traded and recently gained traction following Musk’s tweets. “Dogecoin is the people’s crypto,” Musk had tweeted on February 4, 2021.
How to Invest in Dogecoin from India?
In India, crypto investors can open accounts on any of the Dogecoin-supporting crypto exchanges including WazirX, BuyUcoin, and others. Interested individuals can Dogecoin using a debit or credit card, bank transfer, IMPS transfer from the available platforms.
Is Dogecoin a Good Investment?
Since there is no lifetime limit on the number of Dogecoins that can exist, and millions of new Dogecoins are released onto the markets every single day, there is very little incentive to hold the cryptocurrency for the long term. Bitcoin continues to rise in value because of the system’s lifetime cap on the number of coins that can be created.
The gains in Dogecoin that have been seen in 2021 may not be sustainable over the longer term. Whether the crypto’s tipping and donating culture will continue remains to be seen.
Should You Buy Dogecoin?
Those who bought Dogecoin to start 2021 have been well rewarded. Still, White is a little wary about buying Dogecoin, especially as an investment. The constant flow of new coins onto the market put unending downward pressure on the coin’s value.
White also warned about additional security risks for Dogecoin, compared to other major cryptocurrencies. “It just hasn’t had the same security and code-level scrutiny that Bitcoin or Ethereum has. Plus, there’s just not a particularly robust mining community around Doge, so the exposure for a mining level attack is well above that of something like Bitcoin.”
Buying any sort of cryptocurrency involves risk, and that includes Dogecoin. It’s always worth buying a few coins and familiarizing yourself with the system—but it’s probably best to refrain from sinking more than a token amount of your hard earned money in a cryptocurrency that started life as a joke.
Dogecoin’s implementation differs from Litecoin by several parameters. Dogecoin’s block time is 1 minute as opposed to Litecoin’s 2.5 minutes. Several cases of people using their employers’ or universities’ computers to mine Dogecoin have been discovered.
Dogecoin started its initial coin production schedule with 100 billion coins in circulation. By mid-2015 the 100 billionth Dogecoin had been mined with an additional 5 billion coins put into circulation every year thereafter. Although there is no theoretical supply limit, at this rate, the number of dogecoins put into circulation will only double in 26 years. Like any currency, there is no implemented hard cap on the total supply of Dogecoins. Initially, Dogecoin had a supply limit of 100 billion coins, which would already have been far more coins than the top digital currencies were allowing. Nonetheless, in February 2014, Dogecoin founder Jackson Palmer announced that the limit would be removed in an effort to create a consistent reduction of its inflation rate over time.