Dogecoin: Origin, Success and Concerns Related to this Viral Cryptocurrency
Dogecoin – a cryptocurrency that began in 2013 as an internet joke/parody – has risen dramatically as one of the top cryptocurrencies, adding about $19.9 billion in just a single day. For a cryptocurrency that is based on an internet meme and was conceived as a “fun” alternative to Bitcoin, that is indeed a stunning achievement.
In late April 2021, Dogecoin doubled in value within a day to be valued at 28 cents in the US. It even witnessed a seven-day rise of 300% and is now considered to be a top-10 crypto token. As of May 7, 2021, Dogecoin had a market capitalization of around $92 billion after a six-month climb of more than 26,000%, outpacing almost every other investment out there. The current price of 1 Dogecoin is $0.07 and its total market cap is $10,210,925,909.84.
In this article, I will help you understand some of the important details regarding Dogecoin.
What is Dogecoin?
Dogecoin is a cryptocurrency that aims to serve as a supportive introduction to the concept of cryptocurrencies. It was started on December 6, 2013, by two software engineers, Billy Markus and Jackson Palmer, who wanted to create a payment system that does not come with traditional banking fees. They also wanted to produce a peer-to-peer digital currency that could reach a far broader demographic than Bitcoin.
Originally, it was incepted as a satire on the large number of fraud crypto coins that were rampant during that time. Its name and logo have been taken from the Shiba Inu dog featured in the “Doge” meme that was viral several years ago.
Palmer, who was working in the marketing department of Adobe Systems in Sydney at the time, purchased the domain Dogecoin.com and incorporated a splash screen featuring the crypto coin’s logo and scattered text in the Comic Sans font. After going through the site, Markus contacted Palmer, and the two of them started working together to develop Dogecoin.
Markus created Dogecoin’s protocol along the lines of certain existing cryptocurrencies like Litecoin and Luckycoin. These currencies use scrypt technology in their proof-of-work algorithm. Because of this, miners are forced to use dedicated FPGA and ASIC devices for mining instead of the usual and relatively simpler SHA-256 bitcoin mining equipment.
Soon after its creation, Dogecoin developed its own online community and went on to achieve much greater success than anyone could’ve imagined. Dogecoin numbers have no upper limit, unlike Bitcoins, whose maximum possible number has been fixed at 21 million (experts claim that this number could be reached by the year 2040). As of now, there are more than 100 billion Dogecoins in existence.
When this cryptocurrency was first started, the online community supporting it drew attention by rooting for certain unconventional causes, such as sponsoring Jamaica’s bobsled team at the 2014 Winter Olympics. That very year, a Nascar driver in the US received $55,000 worth of the crypto coin by the Dogecoin community.
What is the reason behind the success of Dogecoin?
Most experts agree that the primary reason for Dogecoin’s exponential rise is the same for the success of Ethereum and Bitcoin – the listing of the most popular virtual currency exchange in the US, Coinbase. In April 2021, after it went public, Coinbase’s market cap momentarily reached $100 billion. At the same time, the values of Ethereum and Bitcoin touched $2,500 and $64,000, respectively. It looks like Dogecoin rode atop this frenzied wave of triumph as well.
Apart from this, “Doge” has seen a fervent support from Tesla CEO Elon Musk, whose regular tweets about Dogecoin certainly seem to have contributed to the mania surrounding the cryptocurrency. In fact, on one occasion, Musk changed his Twitter bio to “former CEO of Dogecoin”. Some other celebrities like rock musician Gene Simmons and rapper Snoop Dogg have promoted Dogecoin on social media as well.
A Reddit group known as SatoshiStreetBets has added to the present success of Dogecoin as well. The members of this group put in the effort to develop an enthusiasm for the crypto coin similar to what led to the popularity of GameStop earlier in 2021. As some of you might certainly have guessed, this group has been named after Satoshi Nakamoto – the screen name of the individual or group of individuals behind Bitcoin.
What are the uses of Dogecoin?
A number of online exchanges provide DOGE trading facilities. With several users, Dogecoin serves as an altcoin as well. Another mainstream commercial application of this cryptocurrency is an interesting tipping system, in which users tip others on social media for putting up engaging and unique content. In online platforms where users regularly share currency-related information, such as Twitter and Reddit, physical items are traded in exchange for DOGE.
A cryptocurrency transaction service known as Dogetipbot was used on popular websites like Twitch and Reddit to send Dogecoins to other users with the help of commands given through Reddit comments. Dogetipbot was taken down in May 2017, and its creator declared bankruptcy. As a result, several Dogetipbot users lost all their coins that were stored in the service’s system.
Is Dogecoin a Scam?
Since Dogecoin originated as a joke, a lot of financial experts and people in the mainstream media simply don’t take it seriously. Moreover, Dogecoin has, unfortunately, had a long and troubling history of scams. For example, on December 25, 2013, a hacker gained access to the online cryptocurrency wallet platform Dogewallet and stole millions of coins. This attracted a lot of attention to the cryptocurrency and made it the most mentioned altcoin on Twitter at that time, albeit in a negative light. The Dogecoin community subsequently began an initiative called “SaveDogemas” in order to help users whose coins had been stolen during the theft.
Akand Sitra at the cryptocurrency risk management platform TRM labs feels that Dogecoin itself is nothing but a scam and points out that more than 65% of all Dogecoins are held by 98 wallets across the globe. Also, he claims that the largest known wallet holds 28% of all Dogecoins in existence, whereas five wallets control 40% of the cryptocurrency’s entire market.
Some investors have also been concerned that the rise of Dogecoin can potentially lead to a bubble because most buyers don’t seem to find the crypto coin of any meaningful value and are only trading to earn cash while the price keeps increasing. Also, cryptocurrencies, in general, are considered extremely volatile because they don’t have any intrinsic value like gold or land. Thus, experts warn that they can crash as fast as they can rise, making them vulnerable to sudden scares. Also, small elite groups which hold large numbers of digital tokens in circulation can manipulate it as well.
How to invest in Dogecoin from India?
If you are interested in investing in Dogecoin, you can open an account on any of the crypto exchanges which support Dogecoin, such as BuyUcoin, CoinSwitch WazirX, and many more. You can buy Dogecoin using a credit or debit card, bank transfer, or IMPS transfer from the available platforms. However, before doing so, make sure you read through this article thoroughly and weigh the pros and cons of the cryptocurrency properly. After that, you can make an informed decision about using it or not.
Dogecoin Price and Market cap
The current price of 1 Dogecoin is $0.07. This means that $100 will buy you 1,428.5714 DOGECOINS.
The current market cap of Dogecoin is $10,210,925,909.84 – which makes it one of the largest cryptocurrencies in the world.
Dogecoin versus Bitcoin and other Altcoins
Bitcoin is obviously the biggest cryptocurrency right now followed by a rapidly growing Ethereum. See how it fares with top cryptocurrencies.