Dogecoin: The Joke Worth Almost $50 Billion

What is Bitcoin and how to get your hands on it?

What started as a joke has now turned into a worldwide asset valued at almost $50 billion. 

The cryptocurrency Dogecoin has gained national attention for its massive gains of more than 6000% this year alone. According to CoinMarketCap, Dogecoin rose from less than a penny to over 25 cents. For being so cheap, Dogecoin is something that almost anyone can get their hands on.

How did it start?

In 2013, software engineers Billy Marcus and Jackson Palmer created a cryptocurrency as a tribute to the popular “doge” meme that year. The meme purposely misspelled the word dog to describe the Shiba Inu character that is the face of the cryptocurrency. Since then, the cryptocurrency has remained cheap but has gained support and usage through Reddit by tipping artists and meme accounts.

Who is involved?

The most predominant figure to push for the investment in Dogecoin has been Tesla CEO Elon Musk. With over 50 million followers on Twitter, Musk continued to tweet sometimes cryptic and subtle messages in his support for the cryptocurrency. Since his involvement in 2021, the value of Dogecoin has skyrocketed.

Additionally, Dogecoin has seen a push due to the involvement of the cult status Reddit group WallStreetBets. This group was most recently responsible for the push against Wall Street hedge funds over GameStop and AMC stock that made big money investors lose billions. The internet messaging board has remained a stronghold for organized investing and rises in quirky companies like Dogecoin.  

How does it work?

Similar to Bitcoin, Dogecoin runs on a blockchain system that is a secure digital archive that records transactions. This secure ledger provides copies of the transactions for all to see which acts as a proof of work system.

People known as “miners” must use high-powered computers to solve complex math equations that add to the blockchain and process transactions. For completing these math equations, the answer is then confirmed by other miners and the correct miner receives Dogecoin in return to sell or keep. Very few people can access these computers as they are expensive and require an immense amount of electricity.

How does Bitcoin compare?

Dogecoin is often compared to the popular cryptocurrency Bitcoin, which has exploded in value since its creation in 2009. Bitcoin started at only more than a few cents but has now peaked over $50,000 per share in 2021. Both are digital currencies but have a few significant differences.

The first is the fact that Dogecoin doesn’t have a set amount of coins to max out at. Bitcoin has a lifetime cap of 21 million coins, which means that miners will have to work longer and harder to add to the currency’s blockchain. 

On the other hand, Dogecoin doesn’t have a lifetime cap and the market sees an average of 5 billion coins issued every year. Making it harder to crack open more Bitcoin has added to its value gain, while Dogecoin has seen a minuscule increase in comparison.

Furthermore, it is easier to add to Dogecoins blockchain than it is for Bitcoin. Comparatively, according to Forbes, it takes around 10 minutes to confirm a transaction and add to the blockchain, while only taking one minute on the Dogecoin blockchain. This adds to the number of Dogecoins available and makes transactions significantly easier than its crypto competitor. 

Where can you buy it?

To buy direct Dogecoin, crypto exchanges such as Binance or Kraken provide the opportunity to do so. With the usage of a debit or credit card, you can directly purchase Dogecoin and set up an account to house your funds. From there it is advised to move your coins into a crypto wallet that protects against hacks and is transported to your smartphone. Other than buying direct Dogecoin, some online brokers such as Robinhood or E-Trade sell Dogecoin and treat your investment like stocks.

Those who joined the Dogecoin craze in 2021 have seen significant gains, but the risk in investing in cryptocurrency is still high. Compared to other cryptocurrencies such as Bitcoin or Ethereum, Dogecoin has the threat of major inflation and lack of maximization. Yet the reward may outweigh the risk as many are getting their hands on a meme dog currency that has attracted the support from billionaires to college kids. It’s not too late to take a chance to get involved in the crypto-craze that has risen to fame.