Blockchain technology has been instrumental in the development of new forms of commerce. A growing number of new cryptocurrencies have emerged, due to major developments in blockchain.
We have talked in the past about using data analytics to choose the best cryptocurrencies to invest in. However, we don’t talk as much about the role of blockchain in the inception of these cryptocurrencies and new digital coins on the scene.
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Dogecoin is one of the newest cryptocurrencies. It has become a lot more popular in recent years, which wouldn’t have been possible without a sophisticated blockchain infrastructure.
Blockchain Made Dogecoin Possible
Cryptocurrencies have definitely exploded over the last few years and more types of digital cdurrency seem to be popping up here, there and everywhere. Dogecoin is one of the many alternatives to the more popular cryptocurrencies like Bitcoin, that is growing within the community. But what do we know about this one in particular? How has blockchain been instrumental in its inception.
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In this beginner’s guide, you’ll get an explanation of what Dogecoin is and who created it. We’ll look at how it’s grown on the market and the data it’s provided. Just like many of the other hundreds of cryptocurrencies on the market, you’ll find out how to buy it and whether Dogecoin is worth investing in.
What is Dogecoin and who created it?
With the market size for cryptocurrency, expected to reach $1087.7 million by 2026, it’s no surprise that new digital currencies are coming into existence.
Dogecoin is an alt-coin to Bitcoin that was launched back on December 6th 2013. The mascot for the coin is one from a popular meme of a Shiba Inu dog, which some of you may be familiar with.
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Based on that nugget of information alone, it seems that the Dogecoin was originally created as a joke by Billy Markus and Jackson Palmer. The founders of the coin likely didn’t expect that their joke would become a very popular one within the crypto community.
The cryptocurrency has created quite a fanbase with fans of the coin calling themselves Shibes and having their own quirky language. It could potentially have its own blockchain ATMs like many other cryptocurrencies.
How has Dogecoin performed on the digital currency market?
Despite its popularity, it’s worth isn’t that substantial in comparison to other cryptocurrencies. As of 2021, the coin is worth around 20 cents and is expected to rise to around 42 cents by the end of the year.
With Dogecoin, what makes it different is that there’s no supply limit to the coin. For those not familiar with how digital currencies work, there’s usually a limit to how many are available. There’s an endless amount of Dogecoin available so it means the coin isn’t as valuable as those with limits on how many there are. The supply of dogecoin can also be transferred efficiently due to the existing capacity of the blockchain network.
For example, there will only ever be 21 million Bitcoins, whereas Dogecoin continues to grow. A panel surveyed by price comparison website Finder, found that 80% of the 42 crypto experts polled saw Dogecoin as a bubble.
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From the experts themselves, they believe that the coin’s price will collapse this year, pop in 2022 and gradually rise from 2025-2030.
Security Issues
Despite being somewhat popular on the internet, the cryptocurrency has had several security problems in the past. As digital currencies are volatile already, these security issues have not likely helped improve the coin’s popularity.
On December 25th, 2014 a Dogecoin wallet was hacked and $12,000 worth of Dogecoin was stolen. All blockchains, including Dogecoin are also at risk of a 51% attack. This means that if more than half of a blockchain is in control of a group or one person online, this hack attack could add invalid transactions to the blockchain.
This is considered to be fraudulent and would likely impact the cryptocurrency’s value on the market.
The reasons behind the success
So why has Dogecoin been so successful? One of the reasons why this has likely had so much popularity is down to a certain billionaire mogul Elon Musk.
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The co-founder of PayPal and CEO of Tesla, has found Dogecoin to be a passion project. Sharing dogecoin memes on his social media pages and encouraging developers to enhance and improve this cryptocurrency, this may be the reason why it’s popular.
Of course, the meme culture on the internet alone and the power social media has, can create viral successes overnight. It’s also a coin that holds one of the largest active communities within cryptocurrency. The community has come together in order to help a number of charities and funding for other projects.
A potential decline
There hasn’t been any update or improvements made to Dogecoin since 2015 and because of that, there is a potential for a decline in it’s value.
However, as an original meme coin, any new features or updates that might pop up in the future, could mean an increase in it’s worth later down the line.
A good source of information surprisingly for this cryptocurrency is through the Dogecoin Reddit account. If any kind of announcement is going to crop up, then this is where you’ll find it.
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How to buy Dogecoin
With Dogecoin, it’s one that’s been fortunate enough to have the backing of such an influential individual that is Elon Musk. While the price has been particularly volatile, there are still those that are investing in Dogecoin, in the hopes that it suddenly gets an update or two later down the line.
So, if you’re looking at how to buy Dogecoin, then here’s what you’ll need to know.
1. Think about how much you want to invest.
Firstly, you want to think about how much you want to invest. There are some cryptocurrencies where you’ll benefit from investing more money, however with Dogecoin, this might not be the case. Of course, any cryptocurrency is going to carry risk. With it’s unlimited supply available, it’s something that makes this coin a lot more volatile and a higher risk.
Think about how much you want to invest as part of your investment portfolio. You may see this as a high-risk investment whilst your investments are typically at the lower end of risk. With that being said, you may only want to invest a small amount.
2. Decide on the exchange platform for buying and selling.
In order to buy Dogecoin, you’ll now need to decide on an exchange platform for buying and selling the coin. Moonpay is just one example of the available platforms where you can invest in multiple coin-types, not just this one in particular.
There are also plenty of other smaller apps that you can download in order to invest in these cryptocurrencies, so it’s worth exploring what’s available and useful for you. According to CoinMarketCap, there are currently 409 global cryptocurrency spot exchanges available. So there’s plenty to choose from!
3. Select a payment option to link up to your account.
Next up is your payment option. Before you start trading any type of cryptocurrency, you’ll need to link a payment method to your relevant account on either an exchange or app.
Depending on the payment method you use and the platform used, will likely dictate how long you’ll need to wait for the funds to process. The bigger the transfer of payment, the longer it’s likely to take.
There are a few exchanges that allow you to use your credit card, so this is worth considering as an alternative payment option. Most will use a bank transfer or eWallet transfer as their payment method.
4. Place your order and consider storage options.
As soon as the money lands into your account, you can purchase Dogecoin. It’s very easy to purchase cryptocurrency. You simply add in how much you want to spend on the coin and the amount of coins you buy will show before you click to purchase.
A good tip to remember with all cryptocurrencies is that even though you may not buy a full coin, any amount is beneficial. Cryptocurrencies are considered to be one that’s more of a long-term investment opportunity.
When you place an order, it should go through almost immediately. As a digital currency, it’s something that operates 24/7, unlike the banks that have limited trading hours.
Storing your cryptocurrency is important to consider too. When you’re buying Dogecoin, it’s good to keep it either in the exchange or app you have already, or through a brokerage’s crypto wallet. Either way, it’s important that it’s a secure wallet too. This means you want an exchange that has excellent security measures in place and you’ve got a strong password set, as well as two-factor authentication where possible.
Is Dogecoin worth investing in?
Dogecoin is one type of cryptocurrency that hasn’t really been created with the same intentions as others. What started as a joke has unintentionally turned into something more and investors are taking it seriously.
However, due to its lack of updates and unlimited supply, it’s a very risky investment to put your money into. There’s a likelihood of your investment not making much in the way of profit, if any. You may want to think about the percentage you put in and how much you’d be willing to lose.
Assess your current financial situation and if you can afford to invest in such a high-risk option, then it’s worth giving Dogecoin a try.
Hopefully you’ve gotten a better understanding of how this weird and wonderful cryptocurrency has found itself a place on the market and continues to maintain its presence amongst other digital currencies. It’s always important to assess the risk on an investment to ensure it’s the right fit for you and your bank balance at this current time.
Blockchain has Made Dogecoin a Viable Contender in the Cryptocurrency Market
Blockchain technology has been invaluable to the evolution of cryptocurrencies. More people are investing in dogecoin as a result of its strong blockchain infrastructure. This bodes well for anybody interested in investing in this new digital coin.