What is Dogecoin? 

Investing in Crypto: What is Dogecoin?

The Dogecoin meme cryptocurrency rose in price in May 2021. It overtook companies such as Gazprom and General Motors in terms of capitalization. Some investors do not understand how money created as a joke can go up so quickly. Others, like Elon Musk, are willing to buy Dogecoin and feel very optimistic about this altcoin.

What is Dogecoin

Back шn 2013, IBM programmer Billy Markus and Adobe engineer Jackson Palmer introduced Dogecoin cryptocurrency. The authors conceived the new electronic cash as a joke – they combined the altcoin with the then-popular DOGE meme about the Shiba Inu breed.

The creators decided that name of Dogecoin must be more straightforward because most cryptocurrencies created after bitcoin have complex technical terms associated with their peculiarities or specifics work.

If shortly, all this was supposed to interest the mass user to get acquainted with the young crypto-industry. It needs to say that the authors did not lose the title. A week later, Palmer buys the dotcom domain of the same name for the site, which visited more than a million people in the first month.

In addition to memes, the Dogecoin project has gained wide popularity for its participation in charity, numerous pumps (promotion with increasing value) through social networks, and mentions in tweets of famous entrepreneurs like Elon Musk.

Fun Fact: In 2014, the DOGE community-supported NASCAR racer Josh Wise by raising about $ 55,000 in Dogecoin to compete.

Dogecoin and Bitcoin

In 2009, an anonymous developer named Satoshi Nakamoto released the first-ever Bitcoin cryptocurrency using distributed and sequential ledger technology (blockchain). The invention quickly fell in love with crypto enthusiasts, hackers, anarchists and supporters of the ideas of the free market and “private” (non-state) money. In his article, Satoshi writes that bitcoin is distinguished from the traditional paper currency, which is also called fiat currency, by the following competitive advantages:

1. Limited and decentralized emission (production) of coins. The central banks of different countries print ordinary money. At the same time, states do not limit their emission and, in principle, can print any amount of money as they want, which leads to inflation. For example, anyone can produce bitcoin (that is, mine). At the same time, its emission limits to the amount of 21 million BTC.
2. Each person can transfer coins to another in the bitcoin network, without intermediaries participation anywhere in the world. So, for example, Mary can transfer John 1 BTC directly from her wallet to his wallet, even if they are in different countries.
3. Wallets are anonymous, and transfers are encrypted. Therefore, you can track any transfers from anonymous wallets through the blockchain. It was a real Bitcoin Revolution indeed!

After the success of bitcoin, many developers got excited about the idea of creating their own electronic money. The first cryptocurrencies used the BTC source code but with minor technical improvements. For reference: any cryptocurrency, except bitcoin, is called altcoins. And those altcoins based on the BTC program code are sometimes called bitcoin forks. DOGE is just such a coin.

According to the crypto community, Dogecoin is an excellent entry point into the crypto market for a modern person. The world is changing. To replace the white collars investors comes WallStreetBets youth – a community of young investors ready to set their own rules. So, it has for millions of people worldwide. Each dogecoin buyer is a person who has become familiar with how cryptocurrency works, how the software works, what exchanges are there for this.

Main technical features of Dogecoin

One of the first bitcoin forks was the well-known cryptocurrency Litecoin. It is the same bitcoin, only faster. LTC creator Charles Lee used a new Script algorithm to replace the previous SHA-256. Because of this, the speed of processing transactions on the network has increased by about four times. Unfortunately, Litecoin also increased emission – up to 84 million units against 21 million for BTC. But Litecoin did not become an “extreme” cryptocurrency either. On its basis, another fork creates called Luckycoin, already with new modifications. And it was based on Lacoin that made DOGE. In short, bitcoin is the great-grandfather of Dogecoin.

The DOGE course for today is as follows:

The DOGE emission is non-standard since it initially assumes that it would amount to 100 billion units. Secondly, it would be much faster (98 billion was mined already in 2014), and, thirdly, it would be limited. But a year after its creation, Jackson Palmer announced the removal of the emission limit. So, now miners receive 10,000 DOGE for each new block created in the blockchain. To date, the number of coins already mined exceeds 129 billion units. By the way, each new partnership forms approximately once a minute. So, it means that the speed of data processing in the dogecoin network is an order of magnitude higher than the speed in the bitcoin network because each new block forms approximately once every 10 minutes.

Dogecoin and Elon Musk

The head of Tesla, Elon Musk, was so fascinated by the funny cryptocurrency that in May 2021 he announced that he would take part in its further development. Judging by the entrepreneur’s Twitter, he has long noticed the digital coin. He publishes new memes about it with some frequency. So, what increases the DOGE rate and fuels interest in electronic cash.

And recently, he even opened a vote among his subscribers, where he asked: “Would you like Tesla to start accepting Dogecoin for payment?” Again, most of the fans responded positively.

The crypto community evaluates Musk’s actions ambiguously. For example, earlier, when the head of Tesla announced the purchase of bitcoin by the company for $ 1.5 billion, many crypto traders and investors accused the businessman of manipulating the market. So, the famous group of hackers from Anonymous went even further and declared war on Musk. Hackers claim that because of his manipulations, ordinary people suffer, who could consistently make money on an independent financial instrument. But sharp ups and downs in value do not allow them to do this.

Dogecoin has long secured a reputation in the crypto market because it has gone through more than one crypto winter since its inception in 2013 and had previously become an object for pumps (in the same 2017 or 2018). Still, it reached its peak popularity in 2021, when the participants of the WallStreetBets subreddit united and inflated the prices of several shares, beating shortlists from among the significant hedge funds. When the pump with stocks became common knowledge, and the popular mobile app Robinhood suspended trading in them, the participants in this subreddit switched to Dogecoin, raising its price several times. Later, Elon Musk’s tweets about DOGE added fuel to the fire.

Many people are happy with Musk’s actions and believe that all this will benefit the price of Dogecoin in the long term. In general, any advertising, and even more so from the head of Tesla, is good.

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