Cryptocurrency is the current frenzy in the marketplace. Since its introduction in 2009, it has experienced a huge surge, both in terms of its price as well as its popularity.
In 2013, when the crypto craze was still prominent (well, it still is), two software engineers, Billy Markus and Jackson Palmer, decided to play a little joke. They created an altcoin named Dogecoin.
Didn’t get the joke there?
Well, the joke lies in the fact that the origin of the name goes back to a meme that had just come into vogue around that time. The meme was of a smiling Shiba Inu dog, surrounded by multicoloured text in broken English, like much noble, so respect, etc. The name was intentionally chosen in order to mock the obsession over bitcoins and other cryptocurrencies that came into existence after its inception.
The objective was the introduction of a fun currency that would prove to be ideal for online tipping and donations. But they never even dreamt that their ‘joke’ would reach such great heights.
Within 72 hours of launch, Dogecoin gained 300% in value, much to the surprise of its creators. But a few days later, it underwent its first major crash when the price dipped by 80%.
Nevertheless, by 2014, the mere trading volume of Dogecoin alone exceeded that of Bitcoin and all other altcoins combined. This gave doge the much-needed ‘hype’ and allowed the Dogecoin community to prosper.
However, it was the periodic tweets about Dogecoin by Tesla CEO, Elon Musk, that brought it to the mainstream and gave it the fame that it enjoys today. Tweets by Musk had such great influence over the price of Dogecoin that Musk even came to be known as the Dogefather. The Dogecoin community even took a dig at him by wishing him on Father’s Day.
Regardless, Musk’s high opinion about the coin also made more people curious about this cryptocurrency and made them contemplate whether to invest in it or not.
Dogecoin also made the headlines for funding many philanthropic activities. People were inclined to donate to philanthropic organizations and causes using doge. One notable achievement is the fundraising event that was conducted by the community to sponsor a Jamaican Bobsled team that had qualified but couldn’t afford to participate in the Winter Olympics.
How To Acquire Dogecoins
Dogecoins are traded on many crypto exchanges like Kraken, Bittrex, etc. Apart from purchasing the coins from these exchanges, it is also possible to mine these coins. By the way, mining is called digging in the case of Dogecoin, probably because dogs dig.
Mining
Mining is the process of adding blocks to the cryptocurrency blockchain by validating transactions. The miners are rewarded with dogecoins for successfully adding blocks to the Dogecoin blockchain. They are also provided with a fee for every transaction that is made using Dogecoin.
Bitcoin vs Dogecoin
The major difference between Bitcoin and Dogecoin is that Bitcoin is deflationary, which means there is a limit on the number of coins that can be mined. It is pre-decided by the creators, that the maximum number of Bitcoins that can be mined is 21 million. Therefore, due to less supply and more demand, the price of bitcoin continues to surge. Meanwhile, Dogecoin is inflationary in nature. There is no limit on the number of Dogecoins that can be mined. Every year, about 5 billion Dogecoins are added to the network and so the price will continue to remain low. The current market value of Bitcoin is US$30,979 per coin while the value of 1 Dogecoin is just US$0.23. The difference is huge. But this difference has proven to be quite advantageous for Dogecoin.
With the price of bitcoin rising day by day, people now consider it a good investment for the future and hoard the coins in order to reap huge profits when the price reaches an all-time high. In effect, the transactions using bitcoin will eventually fall. But this is not the case with Dogecoin. With no limit on the number of coins, these coins will continue to remain in existence and people will continue to perform transactions using these coins. Furthermore, the low price of Dogecoin makes it more approachable for beginners just wanting to try their luck with cryptocurrencies.
Looking at the technical side, Bitcoin relies on the SHA-256 mechanism to secure its network. Dogecoin does away with SHA-256 and instead, relies on Scrypt technology. This means that the two coins cannot be mined using the same hardware. Additionally, the Dogecoin network was designed with a much better transaction speed as compared to Bitcoin, in order to encourage more transactions. While Bitcoin takes 10 minutes to complete a transaction, transactions using Dogecoins can be completed in under a minute. This is certainly a huge bonus because we can carry out ten times the number of transactions with doge in the same amount of time that we take to complete one transaction with Bitcoin. Besides this, doge also has the upper hand in terms of the transaction cost. Transactions performed using Dogecoin cost far less than transactions using Bitcoin.
Even with all these advantages, Dogecoin has had its fair share of hard times. It has been subject to several criticisms. Many financial experts claim it is not right to give such emphasis to a coin that was aimed at mocking the cryptocurrency system. The way its prices surge and drop unexpectedly is a matter of concern for many investors.
But that is how it is with crypto. Nothing is predictable.
In the creator’s own words,
Weirdly, something I made in a few hours is now part of the internet culture.
Being something that started off at merely US $0.0003, it is hard to believe that experts now predict that there are chances of the price touching one US dollar within a span of a few years.
Indeed, Dogecoin has come a long way. It is no more just a joke. And considering the current pace of development, it is on its way to more glory. Who knows, maybe we might soon get to see Musk take doge to the moon!
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