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Gold Dogecoin coin
April 19, 2022

What is Dogecoin and Is It Worth Investing In?

April 19, 2022

Dogecoin began life as a joke, but no one’s laughing now. In fact, this dog-themed coin has proved to be a cryptocurrency with infinite potential. 

In 2009, Bitcoin (BTC), the world’s first cryptocurrency, set in motion the idea of decentralised finance. The idea quickly grew into an entire industry, and there are now, at the time of writing, over 12,000 cryptocurrencies with a combined market capitalisation of over $2 trillion. 

Dogecoin (DOGE) is one of the most famous of these cryptocurrencies.

Having started life as a meme, Dogecoin has grown to become the 11th most valuable cryptocurrency with a market capitalisation of over $18 billion, thanks in no small part to big names singing its praises. 

Positive Dogecoin tweets from the likes of billionaires Elon Musk and Mark Cuban escaped few people’s notice in 2021, sending the price of Dogecoin soaring in the first half of that year.

Accurate Dogecoin predictions have proved hard to make, though, so before deciding whether to invest in Dogecoin, it’s a good idea to learn a bit more about the cryptocurrency.

What is Dogecoin? 

Dogecoin was originally created as a joke in 2013 by software engineers Billy Markus and Jackson Palmer. It’s a peer-to-peer, open-source cryptocurrency and was named after the popular internet meme that referred to the Japanese dog breed, Shiba Inu, as Doge. 

Indeed, in reference to the dog breed and taking inspiration from Bitcoin’s pseudonymous founder Satoshi Nakamoto, Markus, as lead developer, was referred to as Shibetoshi Nakamoto.

How does Dogecoin work?

So, how does Dogecoin work in practice? Well, Dogecoin’s blockchain is based on Litecoin’s proof-of-work algorithm, which was specified in such a way that only the more complex ASIC (Application-Specific Integrated Circuit) devices can be used to mine DOGE. 

The miners receive 10,000 DOGE for each block discovered, which works out to about 14.4 million Dogecoins mined every day, and there are just over 132 billion Dogecoins in existence.

Unlike other cryptocurrencies, such as Bitcoin, Dogecoin has no limit to its supply, with around 5.26 billion new Dogecoins entering the market every year.

Within two weeks of Dogecoin’s launch in December 2021, the price had leapt 300%, offering a glimpse into the Dogecoin future we now know today.

Elon Musk and Dogecoin

Currently, those 132 billion Dogecoins are worth around $0.13 each, putting the cryptocurrency amongst the most valuable in existence.

In May 2021, Dogecoin reached an all-time high of $0.69, gaining over 12,000% in value since the start of that year. Much of this meteoric rise can be put down to a series of Elon Musk Dogecoin tweets, in which the eccentric billionaire endorsed Dogecoin.

The tweets had a powerful effect on the DOGE price, even prompting an investigation by the Blockchain Research Lab into exactly how Musk’s tweets affected prices in the cryptocurrency market

This phenomenon is now known as the ‘Musk Effect’, and the Dogecoin community has informally acknowledged the power of Musk and his Dogecoin tweets, prompting his honorary appointment, in absentia, as Dogecoin’s CEO. 

Moreover, following the GameStop ‘short-squeeze’ event in 2021, the Redditors involved turned their attention to Dogecoin, giving it more time in the limelight. Dogecoin was actually one of the most traded cryptocurrencies in the space for several days. When Elon Musk bought Twitter in April 2022, Doge spiked heavily while other coins slide in price.

Love him or hate him, there’s no denying that Elon Musk has a huge influence on the Dogecoin price. These days, any Dogecoin predictions need to factor in, at least to some extent, what the Tesla owner is saying about the coin.

Is Dogecoin a good investment?

When it comes to investing in Dogecoin, the question isn’t so much why, but why not?.

Encouraged by Dogecoin’s popularity and with Dogecoin predictions from its ‘CEO’ now suggesting it could become one of the most used cryptocurrencies (a far cry from the original intention when it was created), the wheels of progress have begun turning. 

Dogecoin’s core development team is on a mission to turn the meme-inspired cryptocurrency into a platform for development in the DeFi space. Instead of simply copying Bitcoin’s upgrades line-for-line as has become a tradition for many lesser coins, the Dogecoin team is proposing exciting new ways to improve its scalability issues. 

Furthermore, Dogeo, a Dogecoin-inspired stablecoin, can now be minted by staking Dogecoin, thanks to a partnership between OpenDAO and Ren. 

To a seasoned crypto-enthusiast, owning Dogecoin has long been seen as a right of passage for becoming a true member of the cryptocurrency space.

As far as the Dogecoin future goes, these developments, in combination with its popularisation, could give Dogecoin the push it needs to get serious and compete in the cryptocurrency space. 

Simply put, it’s an old DOGE with new tricks.

Where can I buy Dogecoin?

Buy Dogecoin at xcoins.com.

Are you ready to become part of the Dogecoin community? You can buy Dogecoin quickly and easily at xcoins.com by simply following the steps below. 

Step One: Sign up at xcoins.com if you haven’t already and complete the verification process.

Step Two: Once you’re verified and your account is up and running, click “Buy Dogecoin”.

Step Three: Choose the amount of Dogecoin you want and the currency you’d like to buy it in, then select the payment method.

Step Four: Enter your wallet address so we know where to send your Dogecoin.

Step Five: Finally, click “Complete Payment” and your Dogecoin will be with you within a few minutes.

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Frequently Asked Questions (FAQs)

What is Dogecoin?

Dogecoin is a peer-to-peer, open-source cryptocurrency created by software engineers Billy Markus and Jackson Palmer in 2013. Modelled on the Shiba Inu meme, it was originally created as a jokey homage to Bitcoin. 

How does Dogecoin work?

Dogecoin uses the same technology as Litecoin, and is based on its proof-of-work algorithm. Unlike Bitcoin, Dogecoin has no supply limit, with roughly 5.26 billion Dogecoins mined every year.

Is Dogecoin a good investment?

Dogecoin has seen dramatic price fluctuations in recent years and Dogecoin predictions are difficult to make. With backers like Elon Musk, though, it’s undoubtedly becoming a cryptocurrency to be reckoned with.

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