Popular meme. Wow.
Dogecoin was founded as a “joke” currency on December 6th, 2013, featuring a Shiba Inu dog as a mascot. It is a cryptocurrency invented by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system that is instant, fun, and free from traditional banking fees. It became popular after investors in online communities like Reddit and Twitter started promoting it.
It is a digital asset with a market capitalization of $32.36B. Dogecoin is ranked as No.8 in the global cryptocurrency rating with an average daily trading volume of $35.26B at the time of writing. Currently, it is priced at $0.2598. Unlike Bitcoin and other cryptocurrencies, there isn’t a specific finite supply number of Dogecoin. Currently, over 129 billion DOGE tokens are in circulation.
How does it work?
The Dogecoin code was based on an earlier now-defunct cryptocurrency named Luckycoin, which is a fork of Litecoin (LTC). Dogecoin uses Scrypt proof-of-work algorithms for consensus of the blockchain protocol.
To obtain this coin, people need to run the Dogecoin software and dedicate computer power to provide this service (a process commonly referred to as "mining"). In this way, they can have the chance to obtain newly minted cryptocurrency, just like Bitcoin mining.
As time passed by, the unlimited supply of Dogecoin gradually reduces the motivation of miners' from securing the Dogecoin blockchain. And anyone mining Litecoin could also mine Dogecoin without additional work for the mining process was integrated with Litecoin’s in 2014.
Why does it have value?
So far, Dogecoin continues to maintain its purchasing power and is used in online commerce. Dogecoin is the same as any cryptocurrency in that it has a floating exchange rate and can similarly be bought, traded, and exchanged for fiat currency or physical goods.
Dogecoin is exchanged between peers and content creators, which continues to be most often used in online tipping over social networks like Reddit.
Dogecoin can be expected to rise in value at a reasonable rate, but so far it cannot achieve the price changes like Bitcoin, Ethereum, Ripple, etc. Because of this, it is difficult to say Dogecoin is a good investment when there are many other better choices.
Will Doge reach $1?
Doge will not find it easy to reach the $1 mark for there are so many popular coins in the market even though Elon Musk is the man who backbone it in some ways.
Jason Potts, economics professor and co-director of the Blockchain Innovation Hub at Royal Melbourne Institute of Technology (RMIT) University in Australia, said that the limiting factor is that if the price does start to rise considerably (i.e. someone bids $1) then that will induce a huge wall of selling (from all those holding Dogecoins) which will flood supply and bid prices back down. This is just how markets work. It's exceedingly hard to create a corner and bid something up unless you control a significant part of the supply, which was the case in the GameStop fiasco.
Though Dogecoin was invented as a joke, it is climbing up and become the eighth-largest cryptocurrency by the market cap. This means newcomers are emerging. It remains a very real cryptocurrency in that it has a value that can be stored or exchanged.