Dogecoin was officially launched on December 6, 2013, as a peer-to-peer, open-source cryptocurrency. At first, it was taken as a joke by traders and investors alike, but nowadays, it’s the most prominent cryptocurrency by market capitalization in the meme coins sector. The meme that inspired Dogecoin, Doge, consists of a picture of a Shiba Inu dog with his eyebrows raised, often shared with humorous Comic Sans text. Elon Musk has been a big proponent of the meme coin over the years. In 2023, he temporarily changed the logo on X (formerly Twitter) to the Doge logo.
Often referred to as the “people’s cryptocurrency”, Dogecoin became popular on Reddit, reaching a market capitalization of $8 million within two weeks. The Dogecoin price increased by 300%, defying all odds. 2014 saw the creation of DogeTipBot, a third-party tipping service on Reddit and Twitch that allowed users to send Dogecoins to each other for posting favorable content. Another contributor to the meme coin’s popularity is the expansive list of celebrity endorsers who frequently voice their support. Examples include Snoop Dogg, Carole Baskin, and Kai Greene.
IBM Software Engineer Billy Markus And Adobe Software Engineer Jackson Palmer Created Dogecoin
Billy Markus, a former IBM programmer, joined forces with Jackson Palmer, a marketing professional from Adobe Systems, to build Dogecoin from Litecoin, the so-called “silver to Bitcoin’s gold”. Utility was never a priority for the cryptocurrency. Dogecoin became more popular than anyone expected, that is, a zealous community formed around the token, motivated by its commitment to “Do Only Good Everyday”. Since it didn’t have the necessary hashrate to prevent a 51% attack on the blockchain, Charlie Lee suggested merge mining Dogecoin and Litecoin because both coins use the same algorithm – Scrypt.
Historically, low prices and abundance have made meme coins attractive to speculators hoping to create fortunes. Dogecoin is an inflationary token, whereas cryptocurrencies like Bitcoin are deflationary, making them inherently scarce. Still, it has a diminished inflation rate, which means that every year, the rate of inflation decreases in comparison to the total supply, making Dogecoin a legitimate currency. Online platforms let you purchase various gift cards. Amazon, Steam, and Netflix allow you to pay for products using cryptocurrency. Multiple exchanges offer trading options against other cryptos and fiat currencies.
Dogecoin Relies On The Proof of Stake (PoS) Algorithm To Verify Transactions
Originally, Dogecoin used a Proof of Work (PoW) consensus mechanism, where miners race to solve intricate mathematical puzzles to confirm transactions and add new blocks to the blockchain. There are many drawbacks to the PoW consensus method, such as energy-guzzling equipment and scaling issues that impede growth. Vitalik Buterin, one of the advisers of The Dogecoin Foundation, helped the project transition to the more efficient Proof of Stake (PoS) consensus mechanism. The reduction in energy consumption is substantial, and the blockchain network can have more nodes.
One Of Dogecoin’s Differentiating Features Is Its Transaction Processing Speed
Since it uses the PoS protocol, Dogecoin can process up to 33 transactions per second (TPS), whereas Ethereum only handles 20 to 30 transactions per second. TPS counts not only for speed and efficiency but also for scalability, which means there are no theoretical limits to the number of transactions Dogecoin can process concurrently.
The Dogecoin Foundation aims to onboard one million retailers by the end of the year, and if successful, it could drive significant growth and adoption in the years ahead.
Dogecoin ETFs Could Soon Be Approved, Which May Trigger A Price Increase
Several asset management firms filed for Dogecoin ETFs, including Grayscale, Rex Shares, Bitwise, and Osprey Funds. The Securities and Exchange Commission (SEC) has acknowledged and is set to review the crypto ETF proposals, where authorized participants can handle cash rather than Dogecoin directly. The 240-day review window commences after its Federal Registration publication. Investing in ETFs simplifies entry into the crypto market, so traders and investors can harness the growth potential of Dogecoin while diversifying their portfolios. Still, the inherent volatility of meme coins requires a strategic/informed approach to investing.
For Dogecoin, based on a meme that has been swept up in the mania, the regulatory seal of approval lends legitimacy to its efforts. The added security and traceability can open up the meme coin sector to institutional investors, who can bring significant capital inflows that can increase liquidity and reduce volatility over time. The approval of Bitcoin ETFs helped drive the cryptocurrency to new heights. Attention must be paid to the fact that there are differences between Bitcoin and Dogecoin that may prevent the SEC from giving it a thumbs-up.
Fortunately, Dogecoin Can Be Purchased On Various Crypto Exchanges
Many factors influence the price of Dogecoin, such as supply and demand, innovation, market sentiment, competition, regulatory approval, and adoption. Price prediction is, therefore, a challenging task. The likelihood of Dogecoin surpassing its all-time high is low, but its value may increase by +5% and reach $0.327175 by 2030. If you’re eager to add this meme coin to your portfolio, set up an account with a crypto exchange; it can be funded through U.S. dollars or cryptocurrencies. Search for Dogecoin on the platform, check its market price, and make a purchase.
A wallet is necessary if you want to trade or HODL Dogecoin. The best choice depends on the purpose for which you intend to use the meme coin. Wallets can be hot or cold. A hardware wallet is much safer since it eliminates the risk of remote hacking, but you’ll need a software-based wallet for day-to-day purchases.
Ultimately, the decision comes down to your appetite for security versus convenience. Always back up your wallet by writing down the recovery phrase and storing it in an offline location.
Wrapping It Up
Dogecoin is anything but a joke currency. It has stood the test of time, having survived countless bull and bear markets, and remains the go-to meme coin for many traders and investors. Elon Musk’s role in the Department of Government Efficiency (DOGE) translates into notable implications for Dogecoin and the broader crypto landscape. The “people’s cryptocurrency” could experience further adoption as a symbol of streamlined governance.
