Dogecoin is a peer-to-peer, open-source cryptocurrency, much like Bitcoin and Ethereum, but with a theoretically unlimited supply. It’s a living example of how an internet meme can creep into popular culture. “Doge” is a photo of a Shiba inu dog named Kabosu with a rather peculiar expression on its face.
Launched back in 2013, it was originally created somewhat as part of a lighthearted joke for crypto enthusiasts and was named after a once-popular meme. Although the currency was created seemingly as a joke, its blockchain still comes with its fair share of merits, with the underlying technology derived from Litecoin, which is an early Bitcoin spinoff.
Some of the noteworthy features of Dogecoin are its low price and unlimited supply. Soon after its launch, the currency began attracting an enthusiastic online community that started using DOGE for everything, from tipping strangers for good Reddit comments to helping send the Jamaican bobsled team to the 2014 Winter Olympics in Sochi.
Dogecoin in the Crypto Market
Created by two software engineers, Billy Markus and Jackson Palmer, the currency has had a volatile past, with incredible highs followed by dramatic lows. Dogecoin’s creators never expected the coin to gain the kind of momentum and mass appeal that it has acquired over the past few years.
The price of DOGE sky-rocketed over 300% not long after its initial launch in 2013, which came as an unexpected yet pleasant surprise to the developers. This impressive trend continued in the following years and then in 2018, the currency hit a high of $0.017, breaching a market cap of $2 billion for the first time ever. However, although these price hikes were compelling, they were still a long way from the likes of Bitcoin and other mainstream cryptos.
Then in early 2021, the Dogecoin crypto price surged more than 8,600% between January and May. Much of this sudden change in trend was due to massive attention from certain social media campaigns, that included mentions from high-profile names such as Elon Musk, Snoop Dogg, and Mark Cuban. DOGE reached an all-time high of $0.7376 on 8th May 2021, which would have given the coin a market cap of over $70 billion, had it not witnessed a dip in the following months.
Since then, Dogecoin’s price has gradually descended over 84% to reach today’s price. This year specifically, Dogecoin actually got off to a great start, rising over 57% between January 10th and January 14th. Again, this upsurge was only momentary, and Dogecoin has since followed a decreasing trend.
Is Dogecoin Worth Your Investment?
So far, the Dogecoin stock price hasn’t seen any significant changes in 2022. With the ongoing situation between Russia and Ukraine depleting the previously growing crypto market, the value of some crypto majors like Bitcoin and Ethereum has halved from the peak, while meme tokens including Shiba Inu and Dogecoins have plunged over 70 percent from their respective peak values.
In order to comment on the coin’s future prospects, it’s vital to develop an understanding of the underlying blockchain technology here, which is slightly different from other major cryptos. Dogecoin’s blockchain is quite similar to Litecoin’s and is based on Scrypt technology. This means that mining is more complex in this case than traditional proof-of-work chains, although Dogecoin can still process upwards of 40 transactions per second.
According to Blockchair.com, over 83 million transactions have occurred on Dogecoin’s network, while over 24,000 took place within the last 24 hours. The average transaction fee on the network is only $0.15, which is considerably less than the hefty fees paid on the Ethereum network during periods of high congestion. Altogether, these statistics indicate that although Dogecoin’s network isn’t the most scalable one out there, it does have a strong foundation to support larger influxes of transactions in the near future.
For now, Dogecoin has transformed itself into a more widely used online tipping mechanism. Notably, an announcement on Dogecoin’s official subreddit last year highlighted that a tipping bot had been created, which allows Twitter users to tip other Twitter users. This gathered a lot of attraction, especially since the fees for transferring DOGE to another person are relatively low.
This path seems to be the most appropriate for Dogecoin to follow in the upcoming years, as it’s unlikely that major corporations will begin utilizing DOGE due to its meme coin status. As we introduce younger generations to the crypto market, Dogecoin could become more widely used due to the coin’s approachable aesthetic, opening up pathways for further advances in the previously-mentioned tipping service.
Overall, if this happens, then we would expect more demand for DOGE from retail investors and internet users.