If you have even just so much as a passing interest in the crypto world, you have probably heard about Dogecoin ($DOGE). But what is Dogecoin, why is everyone including Elon Musk talking about it, how did it manage to increase its value almost 10x since late January 2021, and should you buy it? Well, here we’ll tell you all you need to know, so you can decide whether this is the right cryptocurrency for you.
Overview
Dogecoin’s Humble Beginnings
What is Dogecoin?
Why is Dogecoin Gaining Traction?
Should I Invest in Dogecoin?
Where Can I Buy Dogecoin?
Dogecoin’s Humble Beginnings
The inspiration for Dogecoin came in November 2013, when Jackson Palmer, then a marketer at Adobe, noticed that a huge amount of altcoins with almost no differentiating features were popping up everywhere.
As a joke aiming for the abundance of altcoins, he tweeted: “Investing in Dogecoin. Pretty sure it’s the next big thing,” referencing the viral meme of a Shiba Inu. His tweet got a lot of attention, and one night, as a way to keep the joke going, he purchased dogecoin.com and photoshopped a picture of the internet-famous dog onto a coin.
Billy Markus, a software developer at IBM, saw the website and reached out to Palmer with the idea to make Dogecoin a reality, based on some of the experimentation he had already done with creating his own cryptocurrency. After a few emails back and forth, they launched Dogecoin, and the rest was history.
What is Dogecoin?
Although Dogecoin has its roots as a meme coin, it quickly became an internet currency that facilitated online tipping on social media platforms due to its high supply and low price. It also functions similarly to many other cryptocurrencies and can be used as a means of payment wherever it is accepted.
Technically speaking, Dogecoin is very similar to some of the earliest altcoins, which, like Bitcoin, operate on proof of work consensus. Since it was forked from the now-defunct Luckycoin, which was itself a fork of Litecoin, the two coins share many similarities.
Although the technology behind Dogecoin is similar to Litecoin and bitcoin, it is important to note that Dogecoin has an infinite supply, unlike LTC and BTC. This means that all else equal, the price of Dogecoin will continue to fall unless its adoption and utility outpace this rate of inflation.
Why is Dogecoin Gaining Traction?
On January 27th, 2021, amidst the events of the Gamestop short squeeze saga, redditor u/lomac2w0 posted a thread proposing to start a Dogecoin rally, which quickly gathered almost 10,000 upvotes and spawned numerous similar threads. Then popular Twitter user The Chairman (@WSBChairman) tweeted, “Has Doge ever been to a dollar?” to his 750,000 followers. That was all it took for $DOGE to go on a monster rally from $0.007 to $0.087 over the 24 hours.
Price of Dogecoin from January 24 to February 9
However, despite explosive early gains, the momentum could not be sustained, and $DOGE quickly crashed from $0.08 to $0.023. The party seemed to be over until February 4th, when Elon Musk came to the rescue of $DOGE traders, tweeting a photo of a rocket blasting off to the moon captioned by a single word: “Doge.” Other celebrities such as Gene Simmons and Snoop Dogg also jumped aboard to hype up Dogecoin.
Should I Invest in Dogecoin?
Before you try your hand at trading $DOGE, you should remember that $DOGE is a highly volatile token, with potential downward price swings of -75% in one day, as seen in its price chart. Nevertheless, with such high volatility, savvy traders who don’t mind playing the risk could potentially reap the rewards.
Where Can I Buy Dogecoin?
You can buy Dogecoin today on the Crypto.com App!
