Dogecoin is a cryptocurrency that, much like bitcoin, allows peer-to-peer transactions across a decentralized network. Technically speaking, the biggest difference between both giants is that Bitcoin is the original blockchain proof-of-concept while Dogecoin is a copy of a copy.
The answer is quite simple: being an open-source blockchain, Dogecoin’s absolute death is highly improbable. Also, many people embarked on the world of cryptocurrencies with this coin thanks to its approachable nature: memes and a low price used to diminish the fear of a potential financial loss.
The Wall Street Journal reported in February that a Dogecoin whale owns as much as 28% of the cryptocurrency. The possibility of someone dragging the whole market down by themselves if they decided to sell the coin destabilizes Dogecoin’s ecosystem.
The Beginning of Dogecoin
This peculiar cryptocurrency was co-founded in 2013 by two software engineers in an attempt to draw positive attention to cryptocurrency. Jackson Palmer, Adobe’s Creative Cloud Engagement Platform Director, and Billy Markus, an IBM software engineer, devised Dogecoin as an alternative to Bitcoin.
Furthermore, special care was put into making it accessible to more people than its counterpart, which only had 1.54 billion U.S. dollars in market capitalization at the time. At a more detailed level, Jackson Palmer is credited with turning the idea into reality. He purchased the domain Dogecoin.com and rendered it in a low-end way, adding a plain splash screen with the logo scripted in comic sans.
Billy Markus contacted Palmer for further development of the newly contrived coin, and so it all began. Litecoin and Luckycoin were used as protocol examples, which explains some of Dogecoin’s features as of today. This open-source cryptocurrency uses a scrypt-based algorithm, just like its contemporaries.
Creators of Dogecoin Made it as a Meme – Stating that it’s Worthless
Among other revelations, Markus and Palmer said that the coin was created in two hours, to poke fun at the extensive number of cryptocurrencies that were being launched at the time.
Markus left the community he helped create in 2015, selling every single Dogecoin he owned. He then proceeded to share on Twitter what he had spent the proceeds on a used Honda Civic. When asked about the reason behind this shocking move, he stated that “the cryptocurrency community did not get the joke” and furthermore described it as a “crypto for sillies”.
The creators have literally stated that Dogecoin is worthless and should be worthless, but that hasn’t stopped investors from pushing it to the top 3 by market capitalization.
The founder of Tesla seems to be Dogecoin’s most significant cornerstone. Or, as Elon musk calls himself: the ‘Dogefather’. Whenever he tweets about the coin, the price jumps.
Traders around the world pay close attention to every word he says, given the big impact his tweets have had on the price. His last appearance on a television show tumbled Dogecoin as he admitted that this digital asset is just a “hustle”.
Despite some negative statements about environmental issues regarding cryptocurrencies in general, this coin has seen a stunning increase since Musk adopted it as a potentially useful coin.
Dogecoin Could Become Useful if Enough People Use It
The solid community formed around the Doge memes and jokes is still attracting newcomers 8 years later, and the reason is well-grounded. Miners can extract as many as 5 billion coins a year. That adds up to nearly 15 million Dogecoins per day.
This number will never go down, giving Dogecoin a potentially infinite supply. As a result, miners will always have an incentive to keep the Dogecoin network running. In addition, its mining software is available for free on the internet, and it does not require special hardware, unlike Bitcoin.
However, this also means that Dogecoin’s total supply will continue to increase even if its price remains unchanged. Although Dogecoin itself doesn’t have a specific use case, Elon Musk has stated that Tesla and potentially SpaceX will utilize the digital asset in the future.
Furthermore, Mark Cuban, one of the richest men in the world has also publicly supported Dogecoin and made the digital asset a payment option for people interested in purchasing tickets for The Dallas Mavericks, the team he owns.
This continuous boost of the community translates to more adoption and growth. As long as people use Dogecoin and it gets accepted in more places, the digital asset will most likely grow. However, investors should be careful and realize that an infinite supply translates to inflation which means Dogecoin might not be the best investment right now.