What is Dogecoin (DOGE)?
Dogecoin (DOGE) is an open source peer-to-peer cryptocurrency, with the coin DOGE. It is one of the ten largest altcoins by market capitalization, and was launched in December 2013. years. This coin is best known for its distinctive “meme” logo of the dog Shiba Inu. It uses the same mining algorithm as Litecoin (Scrypt), but it differs in the coin offering since litecoin is limited to 84 million, and with DOGE the limit does not exist, i.e. the offer is unlimited. One of the features of Dogecoin is its large and passionate community, which over the years has brought popularity to this cryptocurrency, and so the attention of multimillionaire Elon Musk. Despite being originally created as a joke, Dogecoin has gained a significant following and is used for various purposes, including charitable donations, online tips and even as a way to pay for goods and services, all thanks to the low cost of transaction fees on the DOGE network combined with the popularity this cryptocurrency has gained.
What are "meme" coins?
Simply put meme coins are cryptocurrencies, for the emergence of which the inspiration was a certain meme (humorous image or video). Dogecoin is arguably the most famous, and the main reason for this is that it is also the oldest. These currencies carry with them a lack of innovation and general utility, given that their only purpose is to go viral on the internet, the same as the original memes. Since the value of a meme coin is entirely based on the popularity of the meme they represent, these coins are additionally volatile compared to the rest of cryptocurrencies, as their popularity fluctuates every day. Dogecoin developers, Billy Markus and Jackson Palmer, never intended dogecoin to be used in any practical way, much less that this currency would be worth more than eleven billion dollars.
Bitcoin and Dogecoin
Dogecoin is recognized as a “fun” or “meme” version of Bitcoin, with a dog Shiba Inu on its logo. The biggest problem of this cryptocurrency is the unlimited amount of coins in circulation given that rewards to miners are not reduced, as is the case with Bitcoin, where the reward is reduced to half every four years. With Dogecoin, 10,000 new DOGS come into circulation every minute, on the other hand Bitcoin needs 1,600 blocks for this amount of coins, or just over eleven days. The reason for the unlimited offer, according to the developers of the Dogecoin project, is a faster, more adaptable and friendly network, unlike Bitcoin. This argument may have been valid in 2013. Dogecoin was launched in 2001, but today there are numerous cryptocurrencies that offer all the capabilities of Dogecoin, with lower inflation, and some other benefits such as building smart contracts and other decentralized applications.
Famous people interested in Dogecoin
The success of Dogecoin is closely related to several celebrities who have publicly supported this meme cryptocurrency. Mark Cuban, Snoop Dogg and above all Elon Musk are some of the famous people who have had a huge impact on the growth of the popularity of this meme currency. A few weeks ago, the American entrepreneur who owns the social network Twitter, Elon Musk, uploaded an image of Dogecoin as the logo of Twitter. This caused a growth of almost 40% within a few hours. The only problem was that this growth did not last. Just a few days later, the price of Dogecoin returned to the level it was previously with elon musk’s change. An even bigger drop occurred when Elon decided to restore the recognizable Twitter logo again, i.e. the blue bird instead of the yellow dog. This gives us an insight into the enormous volatility of Dogecoin. The entire crypto market has been recognized as extremely volatile and risky by the traditionally financial world. Dogecoin and other crypto memes take this volatility to a higher level given that double-digit, sometimes triple-digit, price shifts are daily events for crypto currency memes. On the other hand, Bitcoin is decreasing volatility day by day, making it increasingly attractive to institutional investors.
Conclusion
Despite its large market capitalization, Dogecoin remains an extremely risky digital asset. Its value is proportional to online excitement combined with the support of celebrities. As a result, you should be extremely careful if you decide to allocate some of your capital to Dogecoin or other meme cryptocurrencies. Investing in them is very risky, but equally extremely rewarding, if you choose the right moments to buy. Other cryptocurrencies base their value on fundamental values, so it is easier to determine whether they will be relevant in a dozen years. With Dogecoin, this is completely unpredictable, because no one can say for sure whether people in the future will be interested in this cryptocurrency or not. In any case, if you decide to buy Dogecoin, you can always do it on our Kriptomats, with minimal commissions and maximum security. We hope you enjoyed reading today’s blog, and you can share your opinion about Dogecoin and other meme cryptocurrencies with us on our social networks (Twitter, Instagram).
