A complete guide on “is dogecoin a good investment?”
Introduction to Dogecoin
Billy Markus and Jackson Palmer, two software developers, invented Dogecoin as a “joke” to mock the irrational speculation happening at the time in the cryptocurrency market.
The Shiba Inu dog’s face from the “doge” meme is used as Dogecoin’s moniker and logo. It is particularly recognized as the first “dog coin” and “meme coin.” Even though it is satirical, others see it as a good financial opportunity. It debuted on December 6, 2013, and its online community grew swiftly.
The dogecoin website gained popularity soon after its launch in the first month. One of the things that makes Dogecoin amusing is that it is a full-fledged cryptocurrency with its blockchain and a mining process similar to Litecoin’s.
Recent availability and historically low prices have made it appealing for investors to think its value would grow.
Dogecoin vs Bitcoin
One of the key distinctions between the two kinds of cryptocurrencies is supply. Dogecoin has an infinite number of coins available. Without a cap, the coin can expand indefinitely without being constrained.
But the supply of Bitcoin is constrained. For each Bitcoin, a particular technique is used to mine it. Also, to be fair, Dogecoin outperforms Bitcoin in terms of efficiency. Additionally, Dogecoin transactions are much quicker and less expensive than Bitcoin transactions.
Miners must complete challenging online mathematical puzzles to add new Bitcoins. It requires a strong infrastructure, a high electricity demand, and powerful computers.
The mining procedure used for Bitcoin is exclusive. Each cryptocurrency has a method for adding to its supply, but Bitcoin uses the most power. In comparison to Dogecoin transactions, Bitcoin transactions are processed more slowly.
How Many Dogecoins are Currently in Circulation?
As of mid-2022, there are roughly 132 billion Dogecoins.
Since then, some individuals have found Dogecoin to be somewhat appealing due to the idea of utilizing it for micropayments, but the same enormous supply will maintain the low price of Dogecoin.
Dogecoin is an inflationary coin since there is no limit to its supply. The total number of Dogecoins that may be released is also unrestricted. The creators of Dogecoin did not take their creations seriously. Since then, considering how inexpensive transactions are, some have considered it a feasible payment option.
Working of Dogecoin
Dogecoin is a cryptocurrency that utilizes Blockchain technology. Blockchain is a digital ledger that records cryptocurrency transactions.
1. Every member of the Dogecoin network has a digital wallet with two keys: a public key and a private key. Requesting a transaction with someone else is possible if you know their wallet ID and public key.
2. As soon as a proposal for a transaction is made, the program notifies all Dogecoin miners worldwide to continue with the procedure.
3. The Dogecoin miners confirm whether or not the sender has enough Dogecoins to complete the transaction. The transaction request is then approved after the validation process.
Worldwide, Dogecoin miners compete to acquire all of the nonce or pending transaction data.
4. The miners then use a mathematical formula to generate the appropriate hash value for that specific nonce of the pending transaction.
5. They deposit 25 Dogecoins into the miner’s account as compensation for successfully producing the right hash number.
6. Subsequently, both users receive a notification confirming that their request for the transaction has been authorized.
7. After a short while, the required quantity of Dogecoin is added to the recipient’s wallet, concluding the transaction.
How to Buy Dogecoin?
The steps to purchase dogecoin are as follows:
1. Register for a Dogecoin account on a cryptocurrency exchange.
2. Finish the identification confirmation procedure. A scan of an identity document, like a passport or driver’s license, is often required for exchanges.
3. Transfer funds to the bitcoin exchange from your bank account. The exchange might accept other payment options. However, bank account transfers often have the lowest costs.
4. After the funds have been deposited into your exchange account, choose “buy” to acquire Dogecoin.
Following your purchase, you may keep your Dogecoin on your exchange account or move it to a cryptocurrency wallet that supports Dogecoin storage. It is advised to move it to a Dogecoin wallet so that you have total control over your money rather than the exchange.
Information to Consider Before Buying Dogecoin
1. Only invest in Dogecoin what you can afford to lose.
2. When the markets are down, buy and hold, and sell when they are up, as they are now.
3. Purchase Dogecoin only from trustworthy cryptocurrency exchanges.
4. Ensure account security by taking necessary measures.
5. Get your DOGE from exchanges once you purchase.
6. Using a wallet where you control the keys, whether a hardware or software wallet, is the best way to store them.
7. You should also invest in other cryptocurrencies, simply in case, Dogecoin turns out to be less successful than the market.
Rise of Dogecoin
In 2013, Dogecoin witnessed a massive rise, even among those barely interested in investing in cryptocurrency.
Elon Musk, the founder of SpaceX and the most well-known Dogecoin supporter, frequently began tweeting about a fake “Doge” magazine cover after that, which caused the value of this joke cryptocurrency to increase. After that, more well-known individuals such as Snoop Dogg and Gene Simmons began tweeting about and promoting Dogecoin on social media.
Dogecoin’s value increased by approximately 600% after Elon Musk tweeted, “Doge barking at the moon,” in April 2020. These initiatives have increased Dogecoin’s value to $41 billion now.
Dogecoin Price History
From December 2013 to December 2020, the price of Dogecoin was unchanged. In January 2014, the Dogecoin community briefly outperformed Bitcoin and all other cryptocurrencies collectively regarding trading volume.
Dogecoin momentarily hit its lowest price since its founding on May 6, 2015, at $0.0000869. Dogecoin’s price momentarily increased at the beginning of 2018. Still, it quickly suffered the same fate as other cryptocurrencies as the crypto market collapsed in the wake of the bitcoin crash or cryptocurrency crash of 2018.
The Tesla CEO, Elon Musk, made some comments later in January 2021, which caused Dogecoin’s price to rise by around 339% to $0.032642. With a price of $0.682 per Dogecoin, on May 8, 2021, the cryptocurrency briefly reached its highest price since its inception.
Is Dogecoin Utility Investable?
Even though Dogecoin cannot be used for any useful purpose, many companies and big brands have begun to accept it as a valid payment option. These notable businesses and industry niches where Dogecoin is used are listed below.
1. Gambling online: One of the cryptocurrencies that are most frequently used in the realm of online gaming is DOGE. You may use this cryptocurrency token in many gaming platforms, from online casinos to sports betting sites.
2. Theaters for movies: The first major movie theatre chain to accept DOGE for ticket payments was AMC Entertainment. Soon after, Regal Cinemas began accepting DOGE transfers and other crypto exchanges for movie tickets and product purchases.
3. Shops in malls: Customers can use Dogecoin to pay for goods globally at thousands of retail stores, distribution centers, and logistics providers. Among them, GameStop and Walmart are two of the most well-known brands.
4. Entertainment: For quite some time, several entertainment businesses have accepted Dogecoin payments, including social media sites (Reddit) and streaming services (Twitch). Using DOGE, you may compensate tip authors and subscriber services.
The use of Dogecoin as a medium of exchange is also growing. Following are some examples:
- Third, companies like BitPay and Coinbase have incorporated dogecoin payments.
- Several businesses that provide prepaid cards also accept DOGE tokens.
- Businesses can communicate directly with the Dogecoin blockchain, especially using the JSON-RPC interface.
- Many well-known companies and online stores, like Gamestop, Airbnb, AirBaltic, Gucci, and many others, accept Dogecoin.
- Some of Tesla’s items can also be paid for using DOGE.
Is Dogecoin a Good Investment?
Dogecoin was initially created as a joke. The meme coin is still among the most well-liked in today’s cryptocurrency industry. The price may not be at its highest point, but the coin’s long-term earning potential appears reasonably optimistic.
In contrast to other cryptocurrencies like Bitcoin or Ethereum, it is also more suited as a medium of exchange than a long-term investment. The use of Dogecoins as a “tip” or incentive for submitting material on social media sites like Reddit and Twitter has gained popularity.
According to certain market analysts, Dogecoin is more of a short-term speculative asset, where investors profit from price fluctuations. Despite this, Dogecoin is one of the top ten cryptocurrencies and is gaining popularity.
Many experts are optimistic about Dogecoin’s future, which may suggest that it’s a worthwhile long-term investment. Investors could think about diversification to spread the risk and only invest small amounts in cryptocurrencies.
Nevertheless, despite the aforementioned factors, DOGE saw a significant increase in 2021. According to several cryptocurrency specialists, the increase is not long-term sustainable. Other unfavorable characteristics of Dogecoin, such as comparatively lax security and code level scrutiny and a lack of a significant mining community compared to its competitors like Bitcoin, also prevent currency purchases. These difficulties put you at risk of a minefield attack.
Is Dogecoin a Worthy Cryptocurrency?
For many years, Dogecoin remained a sleeper. However, things started to change when Elon Musk expressed interest in it around 2020. The long-forgotten Dogecoin development team updated the code, which came along with price increases.
The following are some reasons why Dogecoin is worthwhile to purchase right now-
1. A decentralized cryptocurrency: Dogecoin is one of the most decentralized ones currently available. It utilizes a Proof-of-Work algorithm, so anyone can mine it without specialist hardware. As a result, the Dogecoin network’s support is spread across the world.
One of the more secure cryptocurrencies to purchase right away and hold for the long term is Dogecoin, thanks to its high degree of decentralization. Dogecoin may gain significantly as more investors begin to value decentralization.
2. Unique market position: Dogecoin has established a community around itself as the first and largest meme coin, giving it a unique market position. Most other market-available meme coins are built on the same idea as Dogecoin.
Given its current market standing, Dogecoin has an advantage over most of its top DOGE rivals. As a result, once the cryptocurrency industry gains momentum, Dogecoin may set the example for the other meme coins to follow.
3. Scalability: Dogecoin has never had a problem with this. Network issues and poor confirmation times are rarely a problem because of how widely used it is. Scaling puts Dogecoin in the lead among cryptocurrencies with the prospect of widespread adoption.
4. Vibrant and expanding community: The community now numbers in the millions and features well-known figures like Elon Musk and Mark Cuban.
5. Listed on numerous exchanges: Dogecoin is the only meme coin listed on practically all major cryptocurrency exchanges. Even on Robinhood, a website popular among Americans for being a broker that welcomes novices, Dogecoin is featured.
In several ways, Dogecoin benefits from the influence of multiple postings.
6. Durable: Dogecoin, one of the most successful meme coins ever created, is currently the oldest.
Cryptocurrencies like Dogecoin, which have shown to have a survival component, may experience considerable growth in the future in light of the recent collapse of a cryptocurrency worth many billions of dollars.
7. Convenient for routine transactions: Compared to other cryptocurrencies like Bitcoin or Ethereum, Dogecoin has no transactions. Dogecoin transactions are also pretty quick and get confirmed in minutes.
Additionally, users of Dogecoin are assured by its decentralized structure that their transactions cannot be restricted, in contrast to when utilizing centralized systems like banks. For an investor who thinks cryptocurrencies will have a bright future, Dogecoin is a wise cryptocurrency investment because of all these alluring aspects.
This is because the more Dogecoin is used as a payment mechanism, the more demand will offset its inflationary effects.
Advantages and Disadvantages of Investing in Dogecoin
1. High price fluctuation with potential for significant gains.
2. A vibrant, expanding community and initiatives developed with open-source software.
3. Exchange listings that are widely available and make trading simple.
4. Special positioning on the market as the first meme coin.
5. Supporters on social media sites, including Facebook, Twitter, Reddit, and Wall Street Bets.
6. Dogecoin produces blocks per minute, unlike bitcoin’s every ten.
7. Since Dogecoin is a cryptocurrency, many services accept it.
8. Donations can also be made with Dogecoin.
1. Extreme price unpredictability that can lead to significant losses.
2. No supply constraint restricting the rate of the price increase.
3. Restricted technical development and assistance.
4. Excluded uses other than for minor digital payments.
5. Traders may grow bored in meme stocks and coins.
6. Due to the vast number of coins involved and the relatively low value of Dogecoin, mining doesn’t seem viable.
7. Dogecoin has a low potential for investment because it is an inflating currency.
8. In comparison to other leading cryptocurrencies, it is seen as less reliable.
Conclusion on Dogecoin Investment
Dogecoin is one of the cryptocurrencies currently a hot finance issue. Given that it was developed as a joke to spread laughter and joy, this coin stands apart from other cryptocurrencies in an unusual way.
Elon Musk has promised to continue backing Dogecoin despite the current crash in the cryptocurrency market. This is a significant development because he is a major factor in Dogecoin’s recent success. It’s a solid justification for considering Dogecoin as a promising cryptocurrency investment in 2022.
Despite this, many investors continue to recognize the potential value of dogecoin and other comparable cryptocurrencies. Consider the dangers of this investment if you are interested in using cryptocurrency in your investment strategy.