Understanding Dogecoin

The first cryptocurrency to be inspired by a famous meme called Doge is Dogecoin. In December 2013, programmer Billy Markus alongside a marketer known as Jackson Palmer, launched the Dogecoin as some kind of a joke based on the famous Doge meme — an image of a Shiba Inus dog with colorful Comic Sans phrases that are meant to showcase its inner monologue. This is also what serves as the mascot of the cryptocurrency.

This crypto became very popular in the early days of cryptocurrencies where developers started exploring the possibilities of blockchain technology after Bitcoin was created. While the project has been seen as one with so much humor, the developers have constantly stated that they have and will always take their responsibility to Dogecoin users as well as the entire project seriously.

The creation of the project was in a bid to bring personality as well as accessibility to the distributed ledger technology. This has also increased the popularity of the project in 2014. Reading about over 2,000 crypto projects to know the best ones to invest in is not easy. One way to cut off some of the blockchain projects that are not very promising is to read “The Digital World of Crypto Riches.” The book contains a summary of some of the best crypto projects, their features and use cases.

So, what is Dogecoin?

What started seemingly as a joke has over the years offered several benefits. Dogecoin is an open-source, peer-to-peer cryptocurrency with a market capitalization of almost $500 million as of December 2020. It’s a digital currency that allows users to send funds online to any location around the world. You can see it as “the internet currency.” It is also among the top 50 cryptos based on market cap rank provided by CoinMarketCap. The coin marketed itself as a “fun” version of Bitcoin by making use of a Japanese dog called Shibu Inus as its logo.

The casual presentation of Dogecoin was quite suitable for the mood of the increasing crypto community. The justification for the use of scrypt technology as well as the unlimited supply of the coin was to make it a consumer-friendly version of Bitcoin and a more adaptable coin. Since the supply of Dogecoin is unlimited, it is an “inflationary coin.”

Over the years, the Dogecoin community has executed several projects that would endear the crypto to the hearts of many. For instance, in January 2014, the community successfully funded the Jamaican bobsled team’s trip to participate in the Sochi Winter Olympic games by donating 27 million dogecoins estimated to be about $30,000.
Later in March of the same year, they also donated 411,000 worth of the coin to help set up a well in Kenya and the NASCAR driver, Josh Wise, was also sponsored with Dogecoin worth $55,000. All this ended up influencing the market cap of the crypto by its first birthday, which increased to $20 million. But that’s not all; the kind gestures also created a loyal fanbase for the coin.

Dogecoin’s main asset isn’t its technology or team of developers, but its loyal fan base. The coin was originally designed to be a more approachable and friendly form of digital currency that can easily connect with users who find Bitcoin and the early cryptos complex. The Dogecoin community is one of the largest in the crypto world and one of the major uses of the coin is as a tipping service.

Users of the coin tip other users for contributions and posts they feel deserve recognition. You can see it as a “like” for a post with more impact. After Jackson Palmer left the project in 2015 stating that he was embarking on an “extended leave of absence,” the project has not had any development or technical updates.

Factors that Influence the Price of Dogecoin

The crypto market is extremely volatile and Dogecoin is no exception to the frequent extreme surges and big dips. But several factors drive the price of the coin. One of such factors is media attention. Media attention is perhaps the primary factor that drives the price of DOGE. For instance, there was a spike in the price of DOGE in early 2018 when several media outlets started picking up the story that the coin’s market cap has exceeded $2 billion.

Stories like this often influence new traders to invest their funds with the hope of making profits within a short time. A big dip usually follows such spikes in price as traders take their profit. Another factor that drives DOGE’s price is the rumor of an update since there hasn’t been any update since 2015.

So, if you are interested in investing in DOGE, then you should watch out for any news of anticipated new features of Dogecoin or new services that are interested in using DOGE as a payment method. It would be helpful to follow Dogecoin’s active and extremely funny subreddit. Apart from the memes as well as jokes, the community also organizes serious events occasionally. Whenever Dogecoin successfully completes a fundraiser, the coin would attract media attention, which will positively influence the price of DOGE.

The currency has retained its purchasing power and just like other digital assets, it has a floating exchange rate with other cryptocurrencies. Anyone can buy, trade and even exchange DOGE for physical goods and services or fiat. It is popularly used for tipping on several social media sites, especially on Reddit where it is exchanged. Buying DOGE is not difficult because you can find it on Bittrex, Coinbase, Poloniex, Kraken, and most popular crypto exchanges.