Dogecoin: What is it? Is it a Good Investment?

The Dogecoin is a popular Crypto founded by Billy Markus and Jackson Palmer. Dogecoin founders created it on the 6th of December, 2013 as a joke. It’s surprising how the coin gained much fame in 2021 as a digital currency. 

Dogecoin experienced an extraordinary market rise like never before in 2021, only to fall again. That’s why you must understand everything related to this coin before investing. 

In this article, I’d provide you with the needed things to know so you’re on top of the game. Keep reading!

Understanding Dogecoin

Dogecoin is an accessible user-friendly cryptocurrency founded by 2 expert software engineers. It features a Japanese dog, Shiba Inu as its logo and it’s based on a famous internet meme “Doge”.

Developed as joke crypto, the coin established its fanbase and by January 2014, it boasts a cash value of $60 million! In contrast to several coins, it has a fast first coin creation plan. i.e., availability of 100 billion coins as of the middle of 2015.

What’s more? Dogecoin produced additional 5.256 billion coins yearly afterward! They finished mining the 100 billion coins in June 2015.

Dogecoin’s codebase was a fork of Litecoin. Where several of the same features such as hash bashing algorithms were passed on. The only difference is its vast inflating ratio and modeling.

Today, the coin boasts large mainstream fame, even distributing an increased number of meme coins to the crypto market. And also, became the favorite meme of a significant figure, Elon Musk.

Mechanism of the Popular Meme Coin

First off, Dogecoin functions with a chain’s technology. This blockchain technology uses a safeguarded and distributed digital ledger. How does it work? It adds and keeps every transaction made to the network.

Dogecoin applies the use of cryptography to safeguard every transaction in the chain’s technology. Although the coin isn’t effective as a store of value crypto, it’s well equipped for making purchases and payments!

Mining Dogecoin means using the “proof-of-work” notion. Here, miners use computers to figure out complex mathematical equations. Where they use these mathematical equations to record and process transactions on the blockchain system.

The miners get to gain dogecoins as profits for their operations. They can choose to hold the earned coins in their wallet. or put it off for trading in crypto exchanges. 

Using the proof-of-work notion makes the recording of transactions and finishing mathematical equations stress-free. Meaning it makes the coin more productive for processing dogecoin earnings.

To be more specific, it takes just one minute to permit and process new dogecoins. On the other hand, it takes a whole 10 minutes to carry this out on a Bitcoin!

Features of Dogecoin

I’ve explained the definition of dogecoins, how it works but you must be wondering, what makes up dogecoin? What differentiates it from other cryptocurrencies in the market? The core uniqueness of Dogecoin are; 

Decentralization

This is the major part of the security many cryptocurrencies use. Fortunately, Dogecoin is part of those cryptocurrencies. Decentralization simply means any crypto privacy lies in the hands of a collection of crypto investors worldwide.

You can measure the decentralization of any crypto by the number of nodes available in its miner dispersion and system. Coming to dogecoin, it has 1,090 nodes in comparison to 10,000 nodes over 97 countries for bitcoin.

Therefore Dogecoin’s security is extremely low and it’s exposed to approximately 51% of attacks. The bad news is that a single individual supervises 51% of Dogecoin’s network.

Zero Maximum Supply

This meme coin has zero top supply. Its miners earn 10,000 Doge per block where they create each Doge minute by minute. As a result, 14,400,400 dogecoins are created daily. Miners either keep the coins or trade them as they wish.

Few Controls Dogecoin

Approximately 0.002% of dogecoins wallet keeps about ⅔ of the total supply of dogecoin. Why? Well, most dogecoins wallets have a wide range of Doge in circulation. 

You’d agree this is a big risk. Because they’ve got extreme control over liquidity and price fluctuations in the crypto market.  

Dogecoin contract address

Dogecoin makes use of the BNB Smart Chain network.

BNB Smart Chain network (BEP20): 0xba2ae424d960c26247dd6c32edc70b295c744c43

Is Dogecoin a Good Investment?

What made Dogecoin popular is its tremendous usefulness as a tip/reward. This is for the publication of numerous content on popular social media platforms. Such as Twitter and Reddit.

Despite the coin’s enormous surge in 2021, many analysts believe the rally remains unsustainable for a long-term investment. Because it lacks a powerful mining population, and it has weak code-level scrutiny and security. 

The fact that a large number of new coins are released every day into the market. As well as the absence of a lifetime margin on the dogecoin subjects it to low pressure. As a result, it’s not a good investment most especially for a long-term investment. 

The most comforting word about the coin is the fact that it’s wonderful as a transacting currency. Otherwise, Dogecoin has no competitive power compared to the likes of Ethereum and Bitcoin.

Worth of Dogecoin

Dogecoin’s live price today is $0.116187 with a day trading volume of $15,616,513. Sadly, Dogecoin is down with 4.93% in the last 24 hours and it’s ranking on the 13th position in CoinMarketCap. 

Dogecoin’s maximum supply isn’t available, however, its circulating supply is 132,670,764,300. This is with a live market cap of $15, 414,669,854.

Where to Purchase Dogecoin

Top trading exchanges for dogecoin includes;

• Binance
• Robinhood.
• eToro.
• OKEx.
• Gemini.
•  Upbit.
• Coinbase.

To start the process of purchasing a dogecoin, you’ll need to open an account with crypto in support of Dogecoin. Next, you’d fund the account using cryptocurrencies or the U.S dollar.

After funding the account, then you can start purchases by placing an order through any broker of your choice. You’d see the Doge in your wallet upon successful purchase. 

Alternatively, you can purchase a crypto wallet inscribed with a set of private keys for the storage of your dogecoin. Note that using a crypto wallet means increased security of your coin.

Bottom Line

In comparison with many cryptocurrencies out in the market, Dogecoin is exceptionally unsteady. Therefore it’s for the strong minds! I mean people that are willing to take the risk of believing the hype on the coin will drive its price higher. 

In conclusion, you can’t call dogecoin a cryptocurrency investment, talk more of a good investment! Because it’s liable to crash at any moment and the crashing could be very disastrous.