What is Dogecoin?

What is Dogecoin? Why has the Dogecoin cryptocurrency become so popular? What connects Elon Musk with Dogecoin? Where can I buy Dogecoin? What are the prospects for Dogecoin?

Dogecoin was created as a joke, but this year it has already grown by more than 16,000%, which made it one of the most effective cryptocurrencies in recent times. But what is Dogecoin, and is it wise to buy Dogecoin or is it better to ignore this meme coin?

We recommend the best Binance exchange for trading cryptocurrencies.

What is Dogecoin?

What is Dogecoin

Dogecoin is a cryptocurrency launched in 2013 by software developers Billy Marcus and Jackson Palmer as a joke to make fun of Bitcoin and its biggest claims. They named the coin after the doge meme popular at the time about the Shiba Inu breed dog.

Dogecoin did not have a plan, initial capital and a development team to continuously improve the cryptocurrency. Dogecoin is just an open source cryptocurrency built on a fork of Litecoin. The creators of the coin themselves call Dogecoin "a fun and friendly online currency."

However, Dogecoin was soon adopted by the crypto community. Website Dogecoin.com received over 1 million visitors in the first 30 days after launch.

Facts about Dogecoin

Dogecoin is a fork of Litecoin, and transactions are verified using the proof-of-work protocol, where a new block is created every minute.

The initial stock was 100 billion coins – which is a lot compared to other cryptocurrencies, and there is no final limit on the number of coins that can be mined. 5 billion new Dogecoin coins can be mined annually. This creates inflation, which decreases as a percentage over time.

Like Bitcoin, Dogecoin has no use other than its function as a means of payment. This contrasts, for example, with Ethereum, Tron and Cardano are blockchain networks on which all kinds of decentralized applications can be built.

Why has Dogecoin become so popular?

Dogecoin has been used to post messages on Twitter and Reddit, but the driving force behind the rise in Dogecoin prices is mainly the fan community. For them, the Dogecoin cryptocurrency is, on the one hand, a big joke among crypto-adepts and a thumb for all the skeptics who have been saying for years that Bitcoin is not based on anything, and that cryptocurrency is one big pyramid.

On the other hand, those who entered later hope that Dogecoin is their ticket to faster enrichment. There are countless stories about Dogecoin owners who really became millionaires in a few months by buying Dogecoin before the rest.

And then there's Elon Musk, the eccentric founder of Tesla and a big fan of cryptocurrency.

What does Elon Musk have with Dogecoin?

What Elon Musk has with Dogecoin

On January 29, 2024, the price of Dogecoin increased by 800% after users of the Reddit group SatoshiStreetBets began actively buying this cryptocurrency.

The phenomenal growth was partly caused by Elon Musk, who tweeted a photo of the cover of Dogue magazine (a reference to the fashion magazine Vogue), which Twitter and Reddit users considered to support the multi-billionaire Musk in the Dogecoin rally.

One Reddit user wrote: "Mr. Musk is with us ... to the moon."

In early 2024, Musk announced that Tesla had bought $1.5 billion worth of Bitcoin and that from now on Tesla would accept bitcoins as payment. However, already in May 2024, Musk announced that Tesla would no longer accept Bitcoin due to the high energy intensity of mining this coin, which had been known for many years.

Musk also recently announced himself as a Dogefather. But after Musk admitted during an appearance on the comedy show "Saturday Night Live" that Dogecoin is not based on anything, the price dropped by about 30%.

Where can I buy Dogecoin?

You can buy Dogecoin on several major crypto exchanges, including Binance – the largest cryptocurrency exchange in the world.

If you want to actively trade Dogecoin, and also want to be able to speculate on the decline, you'd better choose a broker with cryptocurrency trading. In addition to cryptocurrencies, you can also trade traditional currencies, stocks and commodities with leverage.

Dogecoin Prospects

Dogecoin prospects

In May 2024, the value of Dogecoin rose sharply to $ 0.70, but then declined and is trading in the range of $ 0.20-$0.30. Not so long ago, Dogecoin was worth only a few hundredths of a cent.

The price of the most famous meme coin is notoriously unstable and much more volatile than Bitcoin. Both from the side of the serious crypto community and from the traditional financial point of view, it is noted that Dogecoin is nothing but a highly speculative asset, the value of which is not based on anything. Although the same argument was also used against bitcoin. Once it cost only a few hundredths of a cent, and at the time of writing it was trading at about $ 56,000.

Ultimately, the value of any currency, digital or traditional, today is based on trust. No wonder the euro, dollar and yen are called "paper currencies", it's all about trust.

On the other hand, Dogecoin's value is largely based on the enthusiasm of a relatively small group of crypto fanatics, while popular cryptocurrencies like Ethereum, Cardano, and BNB have clear use cases.

In our opinion, Dogecoin is a more speculative cryptocurrency than some other coins. This does not mean that you should not trade this coin, but we would advise you not to invest a significant part of your cryptocurrency funds in Dogecoin.

Read also the article "How to buy Bitcoins?".