All You Need To Know About Dogecoin
In this article, I will be explaining in detail all you need to know about dogecoin.
Cryptocurrency is a form of digital currency that can be exchanged online for goods and services. It was created to serve as an alternative to fiat currencies and restrict government control over the flow and exchange of money in the market.
Ever since the creation of the first digital currency Bitcoin, several other alternative digital currencies have been developed. Amongst which is Ethereum, Binance coin, Litecoin, Ripples, and Dogecoin amongst many others. In total, there are over six thousand different digital currencies traded publicly with a total value of over two trillion dollars.
For those conversant with the cryptocurrency market, you would have observed that in the past week, Dogecoin has been the rave of the market. It experienced a surge in market value in the past week, reaching its highest value in exchange price $0.45.
How did it begin?
Dogecoin started as a meme or joke coin by its developers Jackson Palmer and Billy Markus, it was created as a fun currency in 2013. Software engineer Jackson Palmer tweeted about it as a joke, referring to it as the next big thing in the cryptocurrency world. He went on to buy a domain for the coin on domain.com. He then partnered with another software engineer Billy Markus.
After creating the currency, both engineers did not take it seriously or promote it. However, users of the popular website Reddit began sending it to each other as tokens. This increased the popularity of the coin and gave it the resources to make it successful.
Irrespective of the popularity of the coin, crypto traders still did not take it seriously until the Billionaire inventor and owner of Tesla Elon Musk began tweeting about it in 2020. Though many people felt musk’s interest in Dogecoin was a joke. However, it gave the coin a major push as other celebrities also began showing interest in the coin.
Mark Cuban, owner of Dallas Mavericks announced that the team would begin to accept payment in Dogecoin. A TikTok trend also began that encouraged people to buy the coin. In the past two years, the coin has had over one billion dollars’ market capital despite it not having a software update in the past two years.
Dogecoin comparision with bitcoin
Unlike Bitcoin, Dogecoin is not as actively managed and even the owners still cannot understand the surge in the price of the cryptocurrency. For a coin that was just basically a copy of another cryptocurrency, Dogecoin keeps getting bigger. As of the 20th of April 2021, there is over fifty-three billion dollars’ worth of Dogecoin now in circulation. Its price increased by 20 percent and it is now the fifth most valuable cryptocurrency in the world.
An increase in demand for the coin will mean that more Dogecoin will keep getting generated every year. It has an infinite supply, unlike bitcoin which has a finite supply of twenty-one million. This is part of the reason why the latter is more valuable.
Impact of dogecoin on problem solving in financial and economic sector
Cryptocurrencies were created to solve a problem in the financial and economic sector but Dogecoin does not solve any problem. This makes investing in the coin very unreliable, unlike Bitcoin, Ethereum and Binance coins that were created to solve actual problems.
The surge in the price of Dogecoin is primarily due to the fact that influential people keep hyping it up and investing millions of dollars in it. A dump of the coin by its prominent investors could lead to a devaluation of the coin and cause a huge decent in its price and value.
Investors who are not so experienced might see its price surge as an avenue to buy into it but this would be a gamble as its prices tend to go down as quickly as it goes up. This however does not make Dogecoin a bad investment option for most experienced investors because an increase in demand would also mean an increase in its value.