Whatever you've heard about Dogecoin, the first thing to know is that it is a viable cryptocurrency that many say could make a strong surge at the end of 2022.
From its, shall we say, unique creation in 2013, it has had its ups and downs, but it still remains in the stable of cryptocurrencies that have survived in a volatile market?
Let's take a look at its history and then discuss what makes it special.
Original Origins
Dogecoin has been called the first "meme coin" because its identity was based on a then-popular meme and was created mostly as a joke, as a satire on the cryptocurrency speculations of the early 2010s. Software engineers Billy Markus, who worked at IBM, and Jackson Palmer, who worked at Adobe, decided to create their own cryptocurrency payment system as a joke aimed at the wild speculation in cryptocurrencies at the time. Particularly it made jabs at Bitcoin's apparently over-earnest plans to take over the world economy. By utilizing the free social media site Reddit it engaged an active fanbase, and its site became something of an overnight hit. In just two weeks, Dogecoin had established a dedicated blog and forum. More importantly, its market value has reached $8 million, leaping ahead to become the seventh largest electronic currency in the world.
Since that introduction on December 6, 2013, it has attained a market capitalization of over $85 billion at its height in May of last year. Dogecoin still bears the hallmarks of its light-hearted beginning. Its coins show the image of a Shiba Inu dog, from which the "doge" name is derived from. It has been shown to punch above its weight and now can be seen as the sponsor of many sports teams, with the fun trivia that it is the current shirt sponsor of the British Watford Football Club.
Drawbacks
Even though Dogecoin is making the most of its unusual beginnings, the fact that it started as a joke means that the mainstream media and financial experts sometimes find it hard to take seriously, sometimes dismissing altogether. Additionally, the cryptocurrency has been subject to scams and schemes, and some commentators have even equated it to a modern type of Ponzi scheme. The case made against it is that investors who purchased Dogecoins at the outset have a considerable financial incentive to attract other investors into joining them, thus driving the price up. Of course, the early investors benefit from this. The system depends on more and more new investors joining in, buoying up the value until there are no more new investors and the entire system collapses. This criticism is not unique to Dogecoin itself, but unlike other cryptocurrencies, Dogecoin does not have a supply cap like Bitcoin, which is limited to 21 million coins.
Positives
All that said, what needs to be taken into account is that Dogecoin is tied to a deterministic inflation rate of 10,000 Dogecoin per block, with a block time of one minute. This means that five billion new Dogecoin will be created and enter circulation every year. So it's not a flaw in the system. It's just a different way of governing its value and growth. This undeniably means that Dogecoin price is more volatile, but that volatility has benefits, particularly for cryptocurrency day-traders, who can use OKX.com to track its performance and enter and exit a trade within one day. And despite everything, as of September 2021, it was still the 10th-largest cryptocurrency in the world, worth $26 billion. It is also cheaper to maintain, faster to use, and has a reduced carbon footprint when compared to other altcoins. Dogecoin is based on the Scrypt algorithm, meaning the transaction process is more convenient than Bitcoin. Dogecoin takes only 1 minute to confirm, while BTC current takes around 10 minutes.
Summary
Time will tell with all the cryptocurrencies and the DeFi market. However, Dogecoin has survived the peaks and troughs of a notoriously volatile market and is still being discussed and traded today.
