WHAT YOU NEED TO KNOW ABOUT DOGECOIN

“I find that often times the most ironic or entertaining outcome is the most likely. And to me the most entertaining outcome would be Dogecoin becoming the global new earth currency.”- Elon Musk

This came a few days after an acclaimed “Chairman of WallStreetBets” tweeted “Has Doge ever been to a dollar”. After both incidents, Dogecoin hit new all-time highs with its current price hovering around $0.038 (February 1st 2021).

It is important to note that on the first day of the year 2021, Dogecoin was going for $0.0049 and in 1 month, it has skyrocketed by almost 800%. I believe it is okay to say Dogecoin is investment-worthy, however, you need some background information before you make that investment.

THINGS YOU NEED TO KNOW ABOUT DOGECOIN

It Started in 2013

It was started by software engineers Billy Markus and Jackson Palmer in 2013 as some form of parody for the increasing number of altcoins. What started as a joke became somewhat practical due to its abundant supply and its low price.

The coin was inspired by a meme of the famous Shiba Inu dog hence the name “doge”. Within one month of the launch of the coin, the website dogecoin.com received one million visitors and an online community was formed.

It is high in Circulation

In contrast to Bitcoin’s block time of 10 minutes, and Litecoin’s block time of 2.5 minutes, the interval time for the coin is 1 minute making it faster to mine than other blockchains.

Initially, there was a supply limit of 100 billion dogecoins. However, when the 100 billionth coin was hit, they began a release of new 5 billion coins every year afterwards. This effort was aimed at consistently reducing the inflation rate of the coin over time.

The number of coins in circulation is far more than what other digital currencies allow. There is a high volume of the coins in circulation as there is no cap to supply of the coin and this allows the coin to inflate substantially.

See why you should invest in cryptocurrency

There is Increasing Usage of the Coins

On Reddit and Twitter, Doge users commonly make exchanges like with every other regular coin. As at 1st February 2021, the market capitalization of the coin stands at about $5.11B and between 31st of January and 1st of February, the trading volume of the coin stood at $8.42B (Source: Coindesk).

The stats send a signal of massive transactions using the coins. Aside from increased investments into the coins, there is also increasing usage of the coin by members of the “doge online community”. On a defunct cryptocurrency transaction service, they allowed users transfer the coins via Reddit comments.

Another system the community has utilized to increase usage of the coin is fundraising. By raising funds in the currency, it leads to marginal increase in demand for the currency which has impact on the price. For example, during the 2014 Winter Olympics, the online community sought to raise $50,000 worth of the coins. On the second day of the fundraising, $36,000 worth of the coins had been raised and Dogecoin to bitcoin exchange rate rose by 50%.

At a point in 2014, the trading volume of dogecoin surpassed that of Bitcoin and other cryptocurrencies combined.

It Has Never Hit $1

Dogecoin has been a beneficiary of extensive social media attention with most of the time, the aim being to hit the $1 mark. However, it’s all time high stands at $0.078.

In July 2020, a Tiktok trend started to get the price to $1. The price spiked but it never hit the $1 ceiling. In January 2021, it rose by almost 800% but it still never crossed the $0.1 mark.

Who knows? Maybe it’s going to cross the $1 mark in the future.

There is a Strong Online Community

The online community of doge users are an exemplary set of people. Over the years, they have displayed a level of loyalty and compassion that has helped the coin community thrive.

In 2013, after a hacker stole millions of coins from the crypto wallet “Dogewallet”, other doge users contributed for those who had lost, they tagged it “SaveDogmas” and within a month, they raised the amount of money that had been lost.

In 2014, the online community raised $50,000 to sponsor the Jamaican Bobsled team to the Sochi Winter Olympics. They also sponsored a water project of approx. $30,000 in Kenya.

Get to understand the factors that affect bitcoin here now!

CONCLUSION

This may be the right time to invest in dogecoins, as they have a thriving platform that will be attracting more attention in the coming weeks.

Time after time, the coin has shown promise in being a good investment option. With astronomical increases in price ranging from 75% to 300% to 800% while its steepest dip in price was 80% which occurred at the start of the currency.

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