Is Dogecoin Still Considered a Joke?
Dogecoin started as a joke back in 2013. At that time, crypto coins were a thing of much speculation. People were investing left and right, and many so-called experts were pandering their “predictions.”
Today, Dogecoin has gone up to a status that is unprecedented. It is now the fourth most valuable cryptocurrency—with a market value of more than $80 billion.
What is Dogecoin, really, and is it still a joke?
A Primer on Dogecoin
Dogecoin came from two software engineers. They made it as a payment system, which was merely a joke. What they did was a satirical type of coin to parody the cryptocurrency trend in 2013.
Even as a joke, there were people who considered it a good investment opportunity. Even if the logo of the coin is that of a dog, it developed a strong following. Over the years, the coin grew, and companies like Newegg started accepting it as payment. By May 2021, the market capitalization of the coin hit $80 billion.
As far as currency supply is concerned, Dogecoin started out with 100 billion coins. It was in 2015 that the coin hit the 100 billion cap. From there, you could mine more coins, but there is a cap of 5 billion coins per year. This means that doubling the coin will happen only in 20 years. Then, the next doubling will happen in the next 60 years. There is no theoretical cap to this coin, unlike Bitcoin.
Why Is It Different from Bitcoin?
Every coin in the market is unique. Since the creators patterned Dogecoin on Bitcoin, it shared several similarities with it, but there are also differences.
For one, Bitcoin has a finite amount which is 21 million coins. Now, Dogecoin has 129 billion coins in circulation. Every year, the system will continue making new blockchains. This is the reason why Dogecoin is cheap—each is only worth about three dimes while one Bitcoin costs $62,000.
Unlike Bitcoin, Dogecoin does not really have mainstream patronage. Many businesses prefer Bitcoin. Today, the most common use for Dogecoin is to give a tip to online artists.
Bitcoin is limited, but Dogecoin is not. The creators of Dogecoin decided to remove the cap. This means that there will be a new set of supplies every year. As you know, anything that grows in number is inflationary. The more supply there is, the lower its value will be.
So, in short, Dogecoin is like fiat or paper money. Banks can print money, and the value of money becomes lower and lower. With a cryptocurrency like this, one would expect that the price will go down. However, this is not what is happening to Dogecoin.
Elon Musk, the Tesla and SpaceX CEO, is a supporter of Dogecoin. It took only one Tweet from Elon to bump up the price of Dogecoin. In April 2021, he Tweeted, “Doge barking at the moon.” Along with this tweet, he shared a photo of a Spanish painting that showed a dog barking at the moon.
This tweet caused a price surge. This tells us that the coin has pretty much become something akin to a stock asset—people buy in droves just because of a tweet, not because of its actual value.
What Is the Future of Dogecoin?
This is a difficult question to answer. The natural logic here is that it will not achieve as much value as Bitcoin did. The reason being is that 5 billion Dogecoins are added every year. For an inflationary material like this, the value will only get lower.
However, there is also the factor of demand. If people like Elon Musk support it, then there is a possibility that the price will go up compared to fiat money. If companies like Vulkan Vegas casino or online shops begin to support it, it will have a bigger economy than what it has right now.
Then there is the factor of time: any cryptocurrency needs time to grow. People need to get educated to understand its value. When Bitcoin started out, people said that it was merely a fad, especially since it was not a regulated form of currency. Now we know that it will grow.
Dogecoin has been around for only about eight years, and it is no longer a joke. It has a lot of years ahead of it. People will begin to realize that Bitcoin is not the only coin that you can use to make transactions. In time, it will surely go up in value, but not as Bitcoin did because Dogecoin has no cap.
No Comments