Dogecoin (DOGE) is a cryptocurrency that is based on the once-viral Doge meme, which features a Japanese Shiba Inu dog. DOGE was one of the first altcoins to appear on the cryptocurrency market. Over the last two years, it has gained global attention because of a series of tweets from Elon Musk, who strongly promoted the project and jokingly referred to himself as the CEO of Dogecoin.
Dogecoin is the most well-known meme cryptocurrency. The project has largely speculative worth, but thanks to the efforts of its creators, it has also gained fundamental value. In addition, as of July 2023, DOGE is ranked #8 on CoinMarketCap’s cryptocurrency chart.
Is it wise to have Dogecoin as an investment? This article looks at some reasons why you should buy DOGE and what makes the project so appealing to the cryptocurrency world. But before we get started, let’s go through Dogecoin and its history.
What is Dogecoin?
Dogecoin is a decentralized, peer-to-peer digital currency that was founded in December 2013 as a lighthearted take on the then-growing cryptocurrency movement. It’s based on the popular “Doge” Internet meme, which depicts a Shiba Inu dog with subtitles in comic sans language. Dogecoin was one of the first altcoins to appear on the cryptocurrency market.
Dogecoin was created as a joke, but its speedy and low-cost transactions immediately acquired traction in online forums. At one point, several internet forums, notably Reddit, included Dogecoin as a tipping mechanism. Dogecoin recently gained popularity as a result of Elon Musk’s extensive promotion.
Dogecoin follows the same fundamental concepts as Bitcoin and other cryptocurrencies. Transactions are recorded on a public ledger known as a blockchain, and new DOGE tokens are generated via a process known as mining. Dogecoin is a popular alternative for short transactions and micropayments because of its rapid block time of under one minute and cheap transaction cost.
Despite its humorous roots, Dogecoin has gained a devoted following and has been used for a variety of philanthropic projects and online tipping. While it has been chastised for lacking a clear use case and having a less secure network than other cryptocurrencies, Dogecoin remains one of the world’s most well-known and extensively utilized cryptocurrencies.
Reasons to Buy Dogecoin
1. Use Cases
Although the majority of DOGE’s worth is speculative, there are a few aspects that contribute to the project’s basic value.
Dogecoin’s first use case was to reward individuals online for creating useful content by tipping them with DOGE. Since then, the project’s use cases have developed, and Dogecoin is now predominantly used as a medium of trade.
During the Dogecoin craze, Elon Musk made it easy for individuals to purchase Tesla items with DOGE. Other smaller businesses and merchants have followed suit and accepted DOGE as a payment method.
Dogecoin has also been used to make charitable contributions. For example, the internet donated Dogecoin to the Jamaican bobsled team in order to help them qualify for the 2014 Winter Olympics in Sochi. This was one of Dogecoin’s first real-world applications.
The Dogecoin blockchain is a Proof of Work network that verifies transactions through mining. The blockchain has been made exceptionally fast by the developers, allowing investors to move money to one another while paying low fees for some of the quickest transactions in crypto. Doge’s value may rise if more merchants accept it as a payment mechanism.
2. Fast and cheap transactions
Dogecoin has its own blockchain network based on Proof of Work consensus. Dogecoin generates a new transaction block every minute, whereas Bitcoin generates one every ten minutes. Furthermore, the transaction throughput of Dogecoin is now approximately 40 transactions per second.
The blockchain used by the project also has extremely cheap transaction costs. A transaction on the Dogecoin blockchain costs only a few cents. Dogecoin’s low costs make it a viable payment option for the internet and increase its reputation as a method of trade.
When you combine rapid and inexpensive transactions, you obtain a very appealing cryptocurrency that can really be used as money. If more online retailers, merchants, and businesses accepted Dogecoin as a payment method, the project’s intrinsic worth would skyrocket.
3. High growth potential
During the previous crypto bull run, there was one meme that brought all Dogecoin investors together: “Doge to $1!” Dogecoin is a cryptocurrency with a massive circulating supply and a low price. In truth, DOGE was hardly worth a fraction of a dollar before its meteoric surge in 2020. Even today, DOGE is just $0.065.
Many people believed in the DOGE to $1 meme since the project had a very cheap starting price. With little to no investment activity, it was quite simple to drive up the price of Dogecoin merely by recruiting new investors. And it only took a few major news stories and TikToks to send DOGE to an all-time high of $0.73.
Dogecoin is as popular as Bitcoin and Ethereum because of its popularity and prestige. During the last bull run, many non-crypto natives who entered the market attempted to purchase DOGE purely because of its low price. Surprisingly, a low price point is what motivates investors to push DOGE’s value higher.
Dogecoin is now the eighth most valuable cryptocurrency in terms of market valuation. DOGE would undoubtedly achieve new all-time highs if the crypto market reached new all-time highs. According to certain members of the community, the token has the potential to reach $3, if not more.
4. Continous growth despite high circulating supply
The supply of Dogecoin is enormous. In reality, there are 137 billion Dogecoins on the blockchain. Over a million new tokens are minted every day, and there are little to no procedures in place to limit the project’s supply, which makes sense considering that DOGE is intended to be a currency and means of trade.
A huge supply typically devalues any cryptocurrency, therefore it undoubtedly affects the price of DOGE. However, despite the large circulating supply, individuals continue to invest in the initiative. Most investors entirely disregard supply and buy only for speculative purposes.
If the speculative value is sufficient to compress the supply and encourage investors to buy additional DOGE, a 137 billion token supply isn’t all that horrible. In reality, it adds to the project’s worth by keeping the price low and producing periods of tremendous expansion, during which enthusiasm alone can drive the price higher.
Is Dogecoin a Good Investment?
Dogecoin is a cryptocurrency that is very speculative. Because of DOGE’s status as a meme token, the project gets the majority of its value from speculation. Due to a number of events, including Elon Musk Tweets, news headlines, and Dogecoin TikToks, the cryptocurrency saw tremendous growth in both 2020 and 2021.
Is it wise to invest in Dogecoin? Some may be opposed to the initiative because of its exceedingly high inflation. However, based on previous price behavior, one can make a strong case that speculative value is sufficient to overcome any inefficiencies with DOGE’s tokenomics.
Many people hold Dogecoin in their portfolios but only invest a little amount of their money in it. DOGE is a play that can help you make a lot of money with a tiny investment. However, it has a high level of risk and might destroy your portfolio if the crypto market crashes again.
Should you invest in DOGE? That depends on your risk tolerance. However, regardless of how much you decide to devote – if any – be sure you do not invest more than you can afford to lose. And, if possible, save a few tokens for the culture.