Cryptocurrencies have always been a somewhat exciting project. The idea was to take on the traditional financial markets and provide a completely new way of storing value and making purchases. It actually worked and now it’s a huge market widely accepted by traditional banking institutions.
No cryptocurrency has a stranger story, however, than Dogecoin. It started as an internet meme, one of countless millions and eventually, it evolved into an actual cryptocurrency that’s widely used and has real-life applications in many industries.
Dogecoin is a cryptocurrency based on a meme of a dog called Shina Inu. The creator of the meme spoke less than perfect English and that’s why it’s Doge and not “dog”. It was a small insider joke that was making its way around Reddit and what was then Twitter, but no one was paying too much attention to it.
The meme went viral when Elon Musk took note of it and started making jokes about it on Twitter. Given how many followers and fans the Tesla owner had at the time, it had a huge effect on the world of crypto trading.
Musk, who was “just” a Tesla founder at the time, tweeted “Who let the doge out” and the world took notice of the meme. It had a growth of about 37 percent within a day and it continued growing from there. Musk’s fans and followers started buying the Doge crypto and things went on from there.
After the tweet and the currency went viral, mainstream media started writing about it and it made it even more salient among those willing to risk a bit on crypto. For some commentators, it showed how interesting the market is, while others still made fun of it.
How is it’s Doing?
Even though it was considered to be a joke at first, Dogecoin had a life of its own after it was mentioned by Musk. The currency was kept in use and it grew as it gained new investors. Over the course of more than a year, it came to a market cap of 6.4 billion.
This means that DogeCoin grew as much as 600 percent. This made it into a respectable cryptocurrency that was widely accepted by countless online businesses and services. Even though the meme died out after a while, the currency hasn’t.
How is Dogecoin Used?
Dogecoin can be used to store value or make purchases online. It allows users to make purchases without providing any personal data. That’s why the best Dogecoin gambling site attracts so many players. It can also be used to subscribe for services online or as an investment opportunity you can hold on to.
The payments made with Dogecoin are faster than the ones with fiat currency and the payments are safe and easy to trace. In this regard, DogeCoin is no different than any other cryptocurrency using blockchain technology.
How does it work?
Like most other cryptocurrencies DogeCoin is based on blockchain technology. It has its blockchain and it’s always updated with new transactions. The network uses cryptography like any other crypto and it’s what keeps the transaction made with Dogecoin safe. Blockchain uses proof-of-work, meaning that the miners process transactions and record them on blockchain.
As is the case with other cryptocurrencies that use proof-of-work, Dogecoin is a great choice if you want to make a purchase, but not so great if you want to use it to store value in the long run. That’s because nothing is stopping the users from creating more coins all the time and causing inflation.
Dogecoin and Bitcoin
All cryptocurrencies are compared to Bitcoin which was the first one and is still the most valuable crypto. The same goes for Dogecoin since both are used in similar industries such as online gambling, making online purchases, and micro-transactions. However, there are many differences between the two.
Dogecoin is a bit faster than Bitcoin when it comes to processing payments. It’s about ten times faster based on how many users it has. If it quickly expands and gets new users, chances are it won’t be able to provide the same quality of service.
There’s also no cap on the number of Dogecoins that can be created, as we mentioned above. This means that it’s prone to inflation in a way Bitcoin can’t be. There is a lifetime cap of 21 million Bitcoin that limits the maximum possible number of coins that can be created. It’s an important downside that the users should be aware of in the long run.
How to Buy Dogecoin
Dogecoin is now widely accepted as a legitimate cryptocurrency. It can be bought and sold in the crypto exchanges just as any other currency. There are over 200 different exchanges to choose from. The exchanges have rules of their own and some charge higher fees than others. Some exchanges are also better suited to novice users, as they have a simplified interface.
It’s important to take the fees into account if you’re buying a small amount of Dogecoin. The fees bite into your investment especially when you’re buying Dogecoin using fiat currency. When it’s bought using other crypto the fees are lower regardless of which exchange you’re using.
Is Dogecoin A Good Investment
This isn’t an easy question to answer. When Dogecoin was first created and when it burst on the public scene it was a joke. But, now a few years later it’s accepted and legitimate and it’s used in countless industries. This shows that it’s a good investment since it can be a safe and fast way to make purchases while providing online privacy. In this regard, it may be better than Bitcoin.
It’s also important to keep in mind that it may not be a good investment when the long run is taken into account. Since there’s no cap on how many Dogecoins can be created, it can lead to inflation.
Should You Buy Dogecoin?
It’s even more difficult to consider how well Dogecoin will fit into any individual portfolio. There are different opinions as to how much of an investor’s portfolio should be in crypto in the first place. The amounts that are in crypto should be diversified among different currencies – it’s wrong to stick to Bitcoin only.
If an investor has already purchased some Bitcoin, Ethereum, and other altcoins, there’s nothing wrong with them venturing into Dogecoin as a way to further diversify a portfolio. It’s important, however, not to overlook Dogecoin because of its strange origin.
Dogecoin started as an online joke but it evolved from that because it had a following. That following was further amplified when Elon Musk mentioned it. It quickly exploded and increased by hundreds of percent. After the initial novelty wore off Dogecoin remained as a valid cryptocurrency, used in gambling, online retail, and many other industries.
Dogecoin is somewhat faster when it comes to transactions but it’s more volatile and prone to hyperinflation since there’s no limit as to how many coins can be created. Dogecoin can therefore be a good investment at least from a midterm perspective. In the long run, it’s less safe, however.