Elon Musk is once again the reason why the price of the “anonymous small” token has skyrocketed. This time
Elon Musk has been a big fan of Dogecoin for a long time as well. It has often been the case that his tweets have pushed the price of DOGE up significantly. He has also tweet that Dogecoin is a cryptocurrency for people.
What is Dogecoin ($DOGE)?
Markus and Palmer launched Dogecoin for the first time on Dec. 6, 2013. It is a cryptocurrency with a friendly brand image that aspires to be a helpful introduction to cryptocurrencies. The name and picture used for the coin are based on the popular meme featuring a Shiba Inu dog. DOGE was created using the open-source code from Litecoin, which itself was a fork of the Bitcoin blockchain and advertised from the start as a casual, fun cryptocurrency. This helped Dogecoin become the main topic of conversation in the industry into 2014.
Since it’s been around for a long time, developers have said that they take the project and their responsibility to users very seriously. As proof, the project would even try out some interesting ideas about how to design a cryptocurrency. Additionally, Dogecoin would emphasize the value of community in cryptocurrency systems. As the community successfully raised funds for various charities in 2014. The funding generated the following:
- $30,000 to assist Jamaica’s bobsled team in qualifying for the Winter Olympics
- $50,000 to fund the building of water wells in Kenya
- Sponsorship of NASCAR driver Josh Wise for $55,000
By 2021, such publicity stunts had elevated Dogecoin to relatively close status. It gained traction on Reddit’s WallStreetBets discussion boards and on Twitter, where its value skyrocketed in response to famous Elon Musk tweets such as “to the moon,” “favorite cryptocurrency,” and “people’s crypto.” The price rocketed following Musk’s tweet, rising roughly 30% within minutes of Musk’s pronouncement. It’s unclear whether Musk was serious about sending DOGE to the moon, but considering the company’s lunar exploration goals, it’s possible. The volatile has increased more than 4,000 percent during 2021 alone, due to the influence of a massive online community that includes Elon Musk, Mark Cuban, and Snoop Dogg.
How Does It Work?
Dogecoin is a digital asset that may be purchased, traded, transferred, and used to make purchases (although very few merchants accept it or any other cryptocurrencies). It uses blockchain technology to keep track of all transactions in a decentralized digital ledger.
Just like Bitcoin and many other cryptocurrencies, Dogecoin validates transactions using the proof-of-work method and a process called mining. Miners use powerful computers to solve mathematical equations that verify and record transactions on Dogecoin’s blockchain. Miners are rewarded in DOGE for confirming Dogecoin transactions. In 2014, its mining process was made to work with Litecoin’s, too. This meant that anyone who was mining Litecoin could also mine DOGE without having to do extra work
DOGE’s first block rewards were designed to be random and range from 0 to 1 million DOGE. This continued until it reached a supply of 100 billion, which was February 2018. Since then, each mined block gives 10,000 DOGE
To Dogecoin’s credit, it is significantly more efficient than Bitcoin. Its mining is faster than Bitcoin mining and consumes far less energy, hence it has a minimal environmental effect compared to Bitcoin mining. Dogecoin transactions are also substantially faster and fewer fees than Bitcoin transactions. There are currently other major cryptocurrencies that outperform DOGE in terms of transaction fees and processing times
Where did Dogecoin come from?
DOGE, like other cryptocurrencies, is “mined” by the decentralized network of computers that manages the cryptocurrency’s operation. Networked computers execute complicated mathematical computations, which in turn release coins or fractions of coins as a reward for completing transactions on the network.
As of August 2021, around 131 billion DOGE were in circulation, despite the fact that new coins are being minted on an almost hourly basis. In addition, unlike Bitcoin, which has a hard limit on the total number of coins that may be issued, Dogecoin has no limit on the number of coins that can be mined. The yearly issuance of new coins, on the other hand, is restricted to 5 billion, and this supply can continue indefinitely.
The value of Dogecoin
Dogecoin is a cryptocurrency, and as with all cryptocurrencies, it is extremely volatile and prone to massive price spikes and falls. Dogecoin, in particular, has had a volatile past and is prone to experiencing rather dramatic price shifts. The key driver of DOGE’s price has been media attention, particularly considering the cryptocurrency’s digital cultural significance. The meme-based coin’s value soared in early 2018 when a number of media publications reported that Doge had reached a market valuation of more than $2 billion dollars.
There was a big bubble in 2017 that saw many different types of cryptos soar. DOGE was one of them, and it fell with them when the bubble burst in 2018. In May 2021, DOGE reached its highest value yet of $0.7. This kind of story frequently results in new traders pouring money into a currency, typically because of the FOMO.
They look like a “pump and dump” scheme, where people raise the price of an inexpensive asset by drawing attention to it, encouraging investors to buy, and dumping it when the price goes down. Then they leave behind investors who were too slow or not savvy enough. There are also a lot of anonymous people who own Dogecoin, so it may not take much to move the price in either direction.
How to buy DOGE
You can buy Dogecoin by creating an account with a cryptocurrency exchange. Coinbase, Binance, and Kraken are some of the exchanges that allow Dogecoin transactions. Additionally, Webull and eToro also enable you to trade the coin.
Is DOGE a good investment?
It’s very risky to buy cryptocurrencies, like any other investment, because you never know if you will make money. The explanation is personal and depends on upon the level of speculative risk you are willing to accept. At the moment, much of Dogecoin’s rise appears to be based entirely on speculation and fun. It has undoubtedly offered opportunities for good comedy and profit, but the question now is whether it is sustainable.
When opposed to finite cryptocurrencies such as Bitcoin, it is practically hard to place a fundamental value on Dogecoin due to its unlimited and rapidly growing supply. There is a potential that it will continue to increase as long as Bitcoin is in a bull market, but taking that chance is a dangerous proposition.
The Foundation is a non-profit organization that is registered in the state of Colorado in the United States. It was set up to help the community with its charitable efforts
Find more information:
If you have any questions, comments, suggestions, or ideas about the project, please email [email protected].
DISCLAIMER: The Information on this website is provided as general market commentary, and does not constitute investment advice. We encourage you to do your own research before investing.