Dogecoin is one cryptocurrency that has been making the news for some months now. In the last 12 months, this digital currency has recorded an increase of over 15,500%. Dogecoin has recorded an incredible increase in its value by 7,000% in the first half of this year. It is impressive progress as there are several cryptocurrencies in the market. Dogecoin has managed to gain an impressive reputation and has stayed on top of many news headlines for months. Achieving this height signals the possibility of positive things to come.
The progress by Dogecoin is the talk of the crypto world because it has increased more than some other cryptocurrencies considered the big names in the game. For instance, Bitcoin and Ethereum have increased in the last 12 months as well. However, they have not recorded a staggering percentage increase as Dogecoin. Bitcoin has increased by 300%, and Ethereum has increased by 1,000%.
The return experienced by these coins is by no means exclusive to them. Other cryptocurrencies have recorded impressive returns. However, Dogecoin’s progress is spectacular. These figures are not what one looks at once and forgets. They deserve some admiring glances.
What is Dogecoin?
Dogecoin is one of the cryptocurrencies around today. Dogecoin is explicitly meant to be a parody of all the ‘serious’ clone coins trying so hard to differentiate themselves, but all seemed the same. Dogecoin was just another clone coin, but instead of taking itself seriously, it was just Dogecoin. According to Billy Markus, the co-creator of the cryptocurrency.
Dogecoin derives its name from a meme that featured a Shiba Inu dog in a revelation that explains why the currency picture also draws from the dog meme. In creating the cryptocurrency, the developers used codes from Litecoin, which itself is a fork of the bitcoin blockchain.
Dogecoin has over 130 billion tokens in supply. Each day, there is a supply of over 14,400,000 new tokens created. With every block, dogecoin miners get a benefit of 10,000 Doge. Dogecoin has been making waves in the crypto world. It has been in the talk of investors, and people have been advocating for a token to sell for $1.00. Dogecoin came into existence in 2013 and has grown since then. With a market capitalization of roughly $75 billion as of May, the currency has improved. The token is pairable with the USD fiat currency and others.
Features of Dogecoin
Dogecoin, like every other coin, has some features that make it worth people’s attention. Here are some of the features the currency brings to the table:
Dogecoin has an infinite supply
Unlike bitcoin that has a finite supply, Dogecoin has an infinite supply. Bitcoin is a cryptocurrency that thrives on several factors, including its scarcity and finite resources. This method has contributed to the success of the currency. Dogecoin, on the other hand, has an infinite supply. In addition to the meme culture and the theoretical approach, this supply status has contributed to the currency’s success.
In the Dogecoin system, miners are making a considerable amount of Doge with every block they mine. A miner or the miners working together can earn up to 10,000 Doge each time they solve a block.
Every blockchain network thrives with decentralization. Decentralized Finance, that is, DeFi, is one reason why most people are buying into the crypto way of doing Finance. They appreciate the efficiency and aptness of the decentralized system that the blockchain system makes available.
For instance, bitcoin has garnered the level of interest it has because of the decentralization system it operates. Because of this decentralized system, bitcoin is secure and trustworthy. This security is one reason why it prospers as a cryptocurrency that several users control.
For Dogecoin, the story is somewhat different. The decentralization system that Dogecoin operates does not measure up to that of Bitcoin. While Bitcoin has almost 10,000 nodes accessible in over 97 countries, Dogecoin has fewer nodes than Bitcoin. It features 1090 nodes, and it makes it susceptible to attacks. If there happens to be an attack, users will be exposed to a great attack. Users may be at risk of losing their assets.
Dogecoin is in the hands of a few wallets
A limited number of wallets operate Dogecoin compared to other cryptocurrencies like Bitcoin. The majority of the coin’s supply is in the hands of a few people.
The implication of this is that the coin’s price is under the control of these few people. Presently, 0.002% of the Dogecoin wallet controls the coin’s supply to a great extent up to 2/3rd. This uneven distribution is not the same with a cryptocurrency like bitcoin.
Glassnode reports that bitcoin is so evenly distributed that 6.6% of the total supply of bitcoin is in the hands of Bitcoin wallets with 500 to 1000 Bitcoin. In contrast, wallets with 10 to 50 Bitcoin control 9% of the total supply of Bitcoin, 5% of Bitcoin’s total supply is controlled by wallets with one or less than one bitcoin.
Why is the value of Dogecoin on the rise?
With these statistics and seeing that Dogecoin is not favored compared to other cryptocurrencies like Bitcoin, one wonders why the coin’s value keeps increasing. Dogecoin’s value has witnessed an upsurge. Here are some reasons why the coin is doing well.
Inflation and stimulus
Some market conditions have put the currency on the rise, and inflation and stimulus have been a part of it. The economy had $15.4 trillion in February 2020. The figures have gone higher after some stimulus packages. There was an impressive increment that saw the figures soaring up to $20 trillion.
More access to crypto trading
With the influence of technological innovations, there has been improved access to crypto space. Anyone with a phone, internet connection, and the right amount of knowledge can trade in cryptocurrency.
This access is greatly improved with most sizeable retail brokerage platforms trading and investing more accessible and affordable for anyone within the acceptable age. In 2019, most of the brokerage platforms wiped out the commission fee, making it $0.
This access to crypto trading also advanced with the availability of finance apps. For instance, most young people use apps like Robinhood. In some forums like Reddit, there has been the influence of young people. There has been the influence of humor in trading rather than investment decisions.
There is always the influence of popular opinion on the choices of traders and investors in the crypto sphere. If a coin is doing well, there is the expectation that traders’ and investors’ interest will be on it. Also, news and the media have a strong influence on the performance of a cryptocurrency.
The information on a cryptocurrency can either make interest grow or wane. If there is the notion and information that a coin is doing well, interest will grow. On the other hand, if the information on a coin is negative, it will spur people to watch their steps before investing in it.
Information on Dogecoin has been positive, giving its market performance so far. Although there has been information on its uneven distribution of supply, infinite supply, and concerns about its decentralization, the coin has grown its value over time. Investors and traders are interested in a coin with such value, and Dogecoin has enjoyed the attention.
Reports reveal that celebrities are endorsing Dogecoin. For instance, the billionaire, Elon Musk, has tweeted some comments about Dogecoin, and this has driven interest in the coin. His posts have driven interest from traders, investors, and crypto enthusiasts as well. This influence is why a general manager at Ripple‘s, Asheesh, described Elon Musk as a “guy who is sort of like the cult leader.” Other celebrities like Snoop Dogg have also endorsed the token. With the influence of celebrities, interest in the token is increasing, and the value is on the increase.
Is Dogecoin a risky investment?
Dogecoin has been the talk of investors, traders, and cryptocurrency enthusiasts because it has recorded some impressive returns. In situations like this, investors are in a rush to make some transactions. Seeing that the currency is good for sales, everyone wants to be a partaker in the positive gains.
However, you have to be careful before making any investment. You do not want to waste your money on a transaction that will give negative results. That a coin is making sky-high leaps does not mean that it will always remain that height. Cryptocurrencies are known to be volatile. The market fluctuates, and prices record positive and negative marks. Therefore, you have to be careful of investments.
For instance, a coin may sell cheaper than its competitors, but it does not mean a wise investment. Presently, Dogecoin sells cheaper than its competitors. Bitcoin and Ethereum are more expensive than Dogecoin. These cryptocurrencies are two of the big names in the crypto world. Investors are more comfortable investing in them because they have established themselves in the crypto world as major currencies to invest in. their years of impressive returns and technological advancement in services have enabled them to garner an impressive reputation.
On the other hand, Dogecoin is not as big a name as Bitcoin, but it is a significant investment going by several factors. In mid-April, Bitcoin recorded a peak performance when it sold for %65,000 per token. Ethereum also experienced a peak performance in mid-May and sold for $4,000 for a token.
Dogecoin has recorded a high performance where it sold for $0.68 in the same period. This considerable price difference saw Dogecoin selling fast because it was a very affordable investment. Anyone can buy some dogecoin tokens and make transactions.
However, experiences have shown that cheap investment is not always a significant investment. If you buy the currency because of its current price, you may record some losses if you do not consider other factors.
Factors to consider before investing in Dogecoin
Dogecoin may be cheap, but you have to consider other factors before investing in it because, aside from the low price of a currency, some areas of consideration are essential as well. You have to do some thorough homework before taking that step.
What Dogecoin brings to the table
Dogecoin is making the rounds in several crypto areas for some reason. Giving what it brings to the table and the price at which it sells, interests in it are soaring by the day. It is easy to follow the trend when you are investing in cryptocurrency. However, you have to consider what the token and the platform offer.
Considering what it brings to the table, it is easy to denote that the coin will be a wise investment because it offers a lot to remain in the market for a long time.
The future of Dogecoin
There is no use investing in an asset if it will not stand the test of time. In the crypto market, the price of tokens is not static. Despite the rate of volatility, the token will still do well. The market can be bearish or bullish, but the coin will still stay put.
Dogecoin has experienced an impressive rise in value over the last 12 months. Also, from the predictions so far, the coin is set to perform better. You can buy Dogecoin and trade with the assurance of making profits.
With an impressive market cap, market data, and predictions, Dogecoin is making waves in the crypto markets. Many investors are interested in the currency’s cultural value aside from its underlying technology. You can buy your very own Dogecoin and become a part of a global movement. However, whether or not you choose to make a long-term investment with Dogecoin is entirely your decision to make.