Ever since Elon Musk announced his interest in Dogecoin and twitted about it, Some people have been frantic to know if it's a good investment ,while others have took the leap of Faith to acquire it.
Dogecoin is the most popular and successful meme cryptocurrency out there. In fact, it is so popular we can’t help but constantly ask ourselves if Dogecoin is a good investment
If you’re asking any traders what was one of those cryptocurrencies that got the crypto world by surprise, he’ll surely mention DOGE.
Dogecoin price was around $0.0001 in 2015. In 2021, it had a major run in which it almost hit $0.7.
The ‘meme tokens’ bull season, alongside with elon tweets, made dogecoin appears worldwide and increased it’s popularity.
This growth, alongside with the trading volume, made DOGE very popular – and it was listed on all of the major cryptocurrency exchanges
What is Dogecoin (DOGE)?
Dogecoin (DOGE), the internet meme coin, is a digital currency created in 2013 as a humorous spin-off of Bitcoin. It features a Shiba Inu dog as its mascot and has gained popularity among crypto enthusiasts. It was created by Jackson Palmer and Billy Markus.
Dogecoin’s blockchain technology is based on Litecoin and uses the same proof-of-work algorithm, which makes it more accessible and less costly than Bitcoin. DOGE has an unlimited supply, meaning it has no cap on the number of coins that can be created.
Despite its origins as a joke, Dogecoin has developed a loyal community of supporters who hodl and use it as a tipping cryptocurrency for social media content. DOGE also gained attention from high-profile individuals such as Elon Musk, who has tweeted about it several times. What’s more, Elon Musk changed Twitter’s logo to Dogecoin’s for a while, drawing attention to the coin once again
While it may not have the same widespread acceptance as Bitcoin or other established cryptocurrencies, Dogecoin’s unique branding and supportive community make it a fun and exciting option for those looking to explore the digital currency world.
HOW DOGECOIN CAME INTO EXISTENCE
In 2013, Jackson Palmer purchased a website, photoshopped the Shiba Inu Doge meme over a coin, and made the dogecoin.com website. He aimed to create a fictional currency to mock the market’s greed and the clone coins that kept popping out.
Palmer had never intended to do anything more than a joke; however, American software developer Billy Marcus contacted him to propose turning the joke into a reality.
So, Dogecoin came into existence based on a fork of Litecoin called Luckycoin. This means that it is a proof-of-work coin, with its own blockchain, miners, and transaction confirmation.
The network supports ≈30 transactions per second and confirms a transaction in 5-10 minutes at only one cent.
DOGECOIN TOKENOMICS EXPLAINED
Tokenomics refers to the study of what makes Cryptocurrency valuable. It looks at how many coins are available, how quickly new coins are made, how they are distributed, and how they can be used.
By understanding these factors, Experts can try to predict how successful a cryptocurrency would be.
So the Tokenomics is subdivided into;
Token Distribution
Token Utility
Token Supply
TOKEN DISTRIBUTION:
Initially, the token distribution was set at a staggering 100 Billion DOGE. Unlike some cryptocurrencies implementing pre-mining or private sales, Dogecoin’s genesis block was utterly public, allowing widespread participation.
In 2018, the original supply of 100 billion DOGE was depleted. Following this, each mined block generated 10,000 new DOGEs, resulting in an annual increase of 5 billion coins in total supply.
While many cryptocurrencies aim for scarcity and limited supply, Dogecoin takes a different approach. This deliberate inflationary nature (5 billion coins annual increase in total supply) is designed to provide plenty of tokens for transactions and usage within the Dogecoin ecosystem.
Dogecoin’s token distribution is also fueled by its mining mechanism. Dogecoin employs a continuous mining reward system, unlike some cryptocurrencies with limited supplies. Miners play a crucial role in securing the network and validating transactions, and in return, they are rewarded with newly minted DOGE coins.
TOKEN UTILITY:
When it comes to utility, it should be clear that Dogecoin is not Ethereum or any other top coin. However, believe it or not, Dogecoin has always had a purpose, and that purpose is simple – it’s money! In fact, Dogecoin stands out among cryptocurrencies as one that has been used for its intended purpose right from the start.
Over time, Dogecoin has been primarily used for tipping Reddit and Twitter users. But weirdly, this meme coin is listed on most crypto exchanges.
Thanks to its low fees and fast transaction speed, Dogecoin has consistently served as a practical currency for tipping and incentivizing others to achieve their goals. Dogecoin’s standout utility, and perhaps its most significant utility among cryptocurrencies, is its ability to facilitate seamless transactions.
TOKEN SUPPLY:
Dogecoin lacks a hard cap on total supply, but in 2014, its founder announced the removal of the limit to achieve a consistent reduction in inflation. The inflation rate declined from 5% in 2015 to below 4% in 2019. Further declines are anticipated, reaching 3% by 2027 and 2% by 2035.
By striking a delicate balance between supply dynamics and inflation, Dogecoin aims to maintain controlled and sustainable growth.
IS IT A GOOD IDEA TO INVEST IN DOGECOIN?
While Dogecoin may exhibit a moderate rate of value appreciation, it is unlikely to reach the same price levels as Bitcoin, Ethereum, Solana, or other top-tier cryptocurrencies. However, Dogecoin is preparing some significant updates, and considering all the hype surrounding the coin on social media; it can be a good investment if the right investment strategies are used. Consequently, it becomes challenging to consider Dogecoin as a favorable investment option when numerous superior choices exist in the market.
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