Doge Starting Points
The name Doge comes from a picture of a Shiba Inu that was posted to an online blog in 2010. From here it snowballed and became one of the biggest memes on the internet due to 4chan and Reddit usage. It was intentionally spelt incorrectly to try and mimic how the Shiba Inu would talk if it could.
It transcended being just a meme when Dogecoin became a reality in December of 2013. There was very little intention of being anything other than a bit of fun for internet users at first. In fact, it had even been used to tip Reddit users for good quality posts early on. However, things started to change as Dogecoin became more widespread.
How does Dogecoin Work?
It is essentially very similar to Bitcoin. It’s built on blockchain technology and uses proof of work confirmations. There are obviously positives and negatives to using this method, but the main positive is that proof of work won’t exclude people with less money from investing.
Reasoning Behind Dogecoin
The creation of Dogecoin was genuinely a joke. Billy Markus and Jackson Palmer were two developers who had seen crypto explode. They felt it would be funny to make their own coin to poke fun at this market explosion.
Dogecoin Starts to Grow
Things changed when Dogecoin started to build up an online following. This allowed it to become more than just a joke. What makes Dogecoin different to other cryptos is that scarcity isn’t part of its model.
This means that Dogecoin is abundantly available in comparison to the majority of other cryptos. As such, when it first appeared on the market it was extremely cheap to buy a Dogecoin. This abundance meant that many prospectors were able to easily acquire tokens without a large outlay.
Why is Dogecoin so Abundant?
The reason for the abundance of Dogecoin is that it is much easier to confirm when compared to other cryptos. For comparison, Dogecoin can be confirmed in a single minute, whereas Bitcoin takes 10 minutes. It means that there is less than 20 million Bitcoin in existence compared to over 130 billion Dogecoin.
This helps to keep the price low because supply will almost always be higher than demand. However, this changed slightly in 2021 when Doge exploded.
Is Dogecoin a Good Investment?
At the start of 2021, things started to change for Doge. A perfect storm creates an investment flurry. The online community combined with people looking for the next big crypto had helped to make Doge into mainstream crypto. Elon Musk had also taken an interest in the coin, regularly tweeting about Doge to his vast number of Twitter followers.
A large number of new investors meant that Doge saw a sharp increase in price. It actually rose over 7,000% over the course of just a few months. It led to Doge becoming one of the top cryptocurrencies on the market. It hit a total market cap of $85 billion at one point, although it has settled down since then.
This level of growth has caused people to see Doge as an investment opportunity. However, the forced abundance of the coin does mean it is more volatile than most other cryptos.
Should You Buy Dogecoin?
Dogecoin isn’t guaranteed to increase in price in the future, just like any crypto. The price of the coin will almost always be linked to supply and demand. Due to the high level of new coins that reach the market, it does make it harder for Doge to hit high increases again in the future. However, it has happened before so there is nothing to stop it from happening again. If demand increases to a sufficient level, then Doge prices will begin to increase again.
It has also seen Dogecoin casinos become more popular. This allows players to enjoy playing at a crypto casino without having to deposit huge amounts of fiat.
With a guaranteed number of coins created every year, 5 billion, it allows users to understand the exact rate of inflation. This means that in the future, Dogecoin has the potential to be pursued as a viable way to make payments.
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Reviewed and Fact Checked by Vlad Hategan , NFT Gaming Specialist