on the crypto
Dogecoin is a cryptocurrency born as a joke on the price speculation of the cryptocurrencies themselves. The creators intended to create a coin that no one would seriously invest in, but it didn't go according to plan.
Since this cryptocurrency was launched, there has been no shortage of people ready and willing to invest in Dogecoins. In the first half of 2021, it became the largest memecoin in the world, with a price increase of more than 15.000%. Now it even has its own ticker!
While the craze for Dogecoin has cooled off considerably, it still has fervent supporters. If you are considering joining the “Shibes” – the tribe of Dogecoin fans and investors – you need to know about this cryptocurrency.
How does Dogecoin work?
Dogecoin is a cryptocurrency that can be bought, sold, transferred and used for purchases (although very few merchants accept this or any other cryptocurrencies). It uses blockchain technology to maintain a decentralized digital ledger that records all Dogecoin transactions.
Like Bitcoin and many other cryptocurrencies, Dogecoin uses proof-of-work and a process called mining to validate transactions. Dogecoin miners use devices, such as high-powered computers, to solve mathematical equations that verify and record transactions on the Dogecoin blockchain. In exchange for verifying Dogecoin transactions, miners receive a payment in Dogecoin.
To its credit, Dogecoin is much more efficient than Bitcoin. Dogecoin mining is faster than Bitcoin mining and requires much less energy, so it doesn't have an environmental impact comparable to Bitcoin mining.
Transactions in Dogecoin are also much faster and cheaper than those in Bitcoin, but it is not the only one. Today, there are many popular cryptocurrency types that exceed Dogecoin's transaction fees and processing times.
How many Dogecoins are there?
There are currently more than 130 billion Dogecoins in circulation. It is an inflationary coin which means that there is no maximum supply of Dogecoin. The initial supply – 100 billion Dogecoins – was mined before 2015 and, since then, around 5 billion more Dogecoins have been mined annually.
Is Dogecoin a good investment in 2023?
It may be a fun concept, but Dogecoin is not a good investment. It does not derive value from another asset, as stablecoins do, nor does it add value to a financial system, such as Ethereum. Dogecoin's greatest asset, aside from its entertainment value, is its community.
Dogecoin enthusiasts like that it makes fun of itself. Many other cryptocurrency investors avoid Dogecoin for fundamental reasons, or tend to invest only very small amounts.
Since Dogecoin has no notable intrinsic value, its popularity largely determines its value. This can produce exciting short-term gains, but it is not a viable strategy for long-term investment success. It is likely that the popularity of Dogecoin has already reached its peak and the next trending cryptocurrency is about to emerge and catch our attention.
We advise investors to take a long-term, buy-and-hold approach to investing. If you plan to invest in cryptocurrencies, you have many other better options than Dogecoin.