Dogecoin (DOGE), first released in 2013, came into existence as a meme and is now a cryptocurrency.
It uses the Shiba Inu dog from the popular Doge meme as its logo.
Dogecoin operates on a Proof-of-Work decentralized peer-to-peer system.
This is why DOGE is well known for it’s efficiency in micro-transactions, it has low costs and quick processing times.
There is no limit to how many coins can be supplied, however, around five billion new coins are created each year.
Introduction
Founded in December 2013 by software wizzes Billy Markus and Jackson Palmer, Dogecoin cryptocurrency was created as a joke and gained popularity over the years. It was inspired by the famous Doge memes that showcase the Shiba Inu dog. This cryptocurrency has a massive community that has supported various charitable initiatives along with online tipping.
The Origins of Dogecoin
The purpose of Dogecoin was to add a new twist on Bitcoin and make it more lighthearted. Putting some attention to a larger group, it aimed to draw away from the complexities associated with cryptocurrencies. Its mascot was a Shiba Inu dog from the meme Doge which added a comical view to the currency. The developers behind Dogecoin sought to make it more refreshing and easy to grasp compared to other digital currencies. This very attempt brought up the rapid surge in adoption and loyal community of the coin.
How Does Dogecoin Work?
Dogecoin uses its own blockchain, operates on the Proof-of-Work (PoW) consensus mechanism, just like Bitcoin and Litecoin. Although Dogecoin is a lot more efficient with its time as it adds a new block every minute. This means users experience faster substantiation of transactions with a significantly lower fee. Therefore, Dogecoin becomes an ideal choice for small payments and micro-tipping. Moreover, Dogecoin can be merge-mined with Litecoin, enabling miners to earn both currencies at the same time.
Dogecoin’s Supply and Inflation
The maximum supply of Dogecoin is not capped unlike Bitcoin. In the beginning, Dogecoin imposed a restriction of 100 billion coins, but Dogecoin removed this cap in 2014 so they could have a better rate of inflation. To this day, roughly 5 billion new DOGE are minted each year. Dogecoin’s method of inflation helps assure the price and accessibility of Dogecoin, however, it also limits the currency’s ability to control a controlled driven cost rise.
Dogecoin’s fastest supporters, the ‘Shibes’, have been crucial for the coin’s growth. The lcommunity has sponsored the Jamaican bobsled team for the 2014 Winter Olympics and built a well in Kenya among other philanthropic efforts. Low transaction fees attached to Dogecoin and it’s processing speed makes the coin toilet friendly on Reddit and Twitter.
$DOGE is going to spread like wildfire when Elon Musk implements Doge payments on X
Most people took notice of Dogecoin in 2021 after it got accelerated endorsements from famous people which included Elon Musk. Whenever Musk tweets or speaks publicly about DOGE, the price always seems to rise or fall. Dogecoin achieved its maximum price of nearly $0.74 in May 2021. As the price may have stabilized after that, DOGE still remains one of the leading cryptocurrencies in market capitalization. Dogecoin temporarily reached over 0.7 dollars during mid-2020″ Investopedia
Risks and Considerations
While the perks of investing in Dogecoin are limitless, it is pivotal to consider the risks as well. Here are some associated risks.
Volatility: DOGE’s price can be very volatile, swaying with the tide of market sentiment as well as social media trends.
Inflation: The unlimited supply of DOGE can lead to long-term inflationary presures which will make the coin lose its value.
Lack of Development: When compared to other cryptocurrencies, Dogecoin has a less active development cycle and lower technological upgrades throughput.
Conclusion
Dogecoin began as a joke, but now has real-world applications and a large, active community. Its rapid processing times and low transaction costs make it a suitable candidate for microtransactions and online tipping. Potential investors should keep in mind the currency’s inflationary nature and extreme volatility. As with any investment, thorough research and an understanding of personal risk tolerance needs to be evaluated before making leaps into DOGE.
Disclaimer: The information is for educational purposes only and should not be considered as investment advice. Cryptocurrency trading carries significant risks, and readers should do their own research and consult with a financial advisor before making any investment decisions. Past performance is not indicative of future results, and all investments can lose value.
Laziel sits at the intersection of crypto culture, on-chain economies, and digital identity—crafting narratives that make Web3 human. A writer by profession, he explores the history and evolution of the decentralized internet. From long-form essays to protocols breakdowns and captivating threads, Laziel decodes blockchain and its ethos beyond the hype. He has contributed to multiple DAOs, advised various founders, and built a reputation as a critical voice in a saturated ecosystem.
