Dogecoin is a real discovery of the cryptocurrency market. This asset, which was originally created as a joke and then a video game called DogeMiner, has become a full-fledged digital currency, and its price has shown consistent dramatic growth. What is Dogecoin? What makes it different? Is it really worth taking an interest in it and allocating some of your capital to it?
To understand the Dogecoin phenomenon, we need to take a closer look at Bitcoin, whose current price is hovering around $57,000. Since its inception, BTC has become a widely discussed and gaining instrument. Bitcoin is much talked about, and the number of its supporters grows every month.
Dogecoin is a response to the surge of interest in Satoshi Nakamoto’s creation and cryptocurrencies in general. However, what sets it apart from other altcoins is that it was created by accident. Although there is no confirmed information about it, it is difficult to otherwise evaluate a creation that was supposed to refer to bitcoin and took its name and logo from one of the most popular Internet memes – a shiba-inu dog named “Dodge”. Dogecoin is a kind of parody of a full-fledged cryptocurrency.
Who is behind the creation of Dogecoin?
Dogecoin appeared on December 8, 2013. The creators of Dogecoin are Jackson Palmer and Billy Marcus. The first was a software engineer at Adobe when the new cryptocurrency appeared. The second was working at IBM. They decided to create their own peer-to-peer cryptocurrency, which would be much more widespread and easily accessible. They were able to do this quite quickly, as now there are no problems with where can you buy Dogecoin, there are many services that make it easy to buy and sell Dogecoin.
The debut of Dogecoin was met with great interest. Within 30 days of the appearance of the asset, its official website was visited by more than a million users. In turn, just three days were enough for the current price of Dogecoin to increase sixfold since its launch. However, the subsequent fate was not so colorful. The lack of an idea for the project management and several minor problems led to the fact that no one took the cryptocurrency with a dog on the logo seriously.
Why did the Dogecoin price spike occur?
The year 2021 can safely be considered a real renaissance for Dogecoin. Since January, the currency has risen by 13,000 percent. It is possible that this is just the beginning of the big offensive of the “dogecoin” cryptocurrency. Ilon Musk is behind its success this year. The head of Tesla used social media channels to mockingly promote Dogecoin and led many investors to view the asset as a source of potential profit.
The parody currency was taken seriously by traders, and today it can be considered a full-fledged investment asset. This is evidenced by the fact that Dogecoin is the fourth most capitalized cryptocurrency on the market.
The creators did not become millionaires
Interestingly, the creators of Dogecoin are not really benefiting from the wave of its current popularity. They got rid of their coins. Since the beginning of Dogecoin, they have managed to collect about $5,000 worth of their own virtual coins. In addition, they “dug up” another $10,000 worth of coins. Palmer and Marcus stopped participating in the life of the currency.
The latter sold some of it and used the proceeds to buy a car. Today for the same amount of Dogecoin he would get up to ten million dollars. Little is known about the fate of Palmer’s tokens. Both claim to be opponents of cryptocurrencies, having completely cut themselves off from this market.
Does Dogecoin have a chance to shake up the cryptocurrency market?
In a sense, it already has. All it took was some ridiculous posts by Ilon Musk to make an unnoticed currency attractive. Events around Dogecoin somewhat confirm the emerging views that the near future may belong to small cryptocurrencies.
It is expected that in the next few months the positions of individual altcoins will strengthen significantly, and BTC will face an uncertain crisis. Such an event would come as a real shock to the market. However, before deciding to invest a significant amount of money in Dogecoin, it is worth remembering a few things.
This year’s rate hike is the result of speculation. Palmer and Marcus’ creation, like other cryptocurrencies, is affected by such factors. At this point, there is no economically sound data to convince us that meme cryptocurrency can become as valuable an instrument as standard digital currencies.
Second, Dogecoin is not immune to inflation. If at some point too many of these coins appear on the market, the price of the asset will inevitably fall. Third and last, it is necessary to remember the pedigree of this cryptocurrency. It is still the fruit of a joke, and its current popularity could fade very quickly.