A cryptocurrency started as a joke and is now one of the biggest and most popular coins around. Dogecoin was a lighthearted joke for crypto enthusiasts. It takes its name from a once-popular dog meme featuring the Shiba Inu, a Japanese bread of dog. Despite its peculiar origin story, it has exploded in popularity in 2021; as of writing, Dogecoin is the eleventh largest cryptocurrency by market cap. But is really that simple? And what’s so great about Dogecoin?
What is Dogecoin?
Dogecoin is a first-generation cryptocurrency that can be used to transfer value globally in a secure way. Like Bitcoin and Litecoin, its main purpose is to allow peer-to-peer transactions in a censorship-resistant way. While it started seemingly as a joke, Dogecoin’s blockchain still has its merit. It uses a scrypt algorithm and its notable features are its low price and unlimited supply.
History of Dogecoin
Dogecoin was created in 2013 by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a joke, making fun of the wild speculation in cryptocurrencies at the time. It is the first Meme coin. In late 2017, Dogecoin was participating in the cryptocurrency bubble that sent the values of many coins up significantly. After the bubble burst in 2018, it lost much of its value, but it still has a core of supporters who trade it and use it to tip content on Twitter and Reddit.
Dogecoin and Elon Musk
The world’s richest man is known for his public goofiness and love of silly things. Dogecoin started out pretty silly and it caught his attention and his admiration for the crypto is very popular. He often tweets about it and that causes its price to rally up most of the times. One time, the price went up more than 100% following his tweet. In a Clubhouse interview earlier this year, Elon Musk stated why he likes the meme coin so much, saying: “Arguably the most entertaining outcome, the most ironic outcome would be that Dogecoin becomes the currency of Earth of the future.” When it comes to actual business, however, he has shown to be a far bigger fan of Bitcoin.
PS: Elon isn’t the only celebrity publicly endorsing Doge. Rapper Snoop Dogg is also on board, as is Kiss singer Gene Simmons.
Pros and Cons
- Dogecoin perfectly fits investors who don’t have enough capital to invest in more expensive cryptocurrencies. It allows newcomers to get to know the cryptocurrency market and gain necessary experience.
- Dogecoin allows fast, cheap transactions.
- It has a very active community. The cryptocurrency originally conceived as a joke has functioned since 2013 and is gradually gaining popularity. It sees stable, albeit slow, growth, and even counts Elon Musk among its fans.
- Dogecoin ranks among top 20 cryptocurrencies in market capitalization, which suggests its high stability and trust.
- Lack of a supply cap is one of the biggest disadvantages of Dogecoin. Cryptocurrencies with no supply cap are unideal assets to hedge against inflation.
- Poor Technical Support.
- It is an extremely risky investment characterized by its pump-and-dump behaviors.