Is Dogecoin a Good Investment in 2023? The Motley Fool

Dogecoin uses Litecoin’s Scrypt technology and uses proof-of-work (PoW) on its blockchain. It is considered an altcoin and was launched in December 2013 with the image of a Shiba Inu dog as its logo. Dogecoin’s blockchain has merit with its underlying technology derived from Litecoin. Notable features of Dogecoin—which uses the Scrypt algorithm (pronounced ess-crypt)—are its low price and unlimited supply. Dogecoin (pronounced dohzh-koyn) is a cryptocurrency meme coin that began as a lighthearted reference to one of the internet’s most enduring memes.

Two popular software packages for mining DOGE on a personal computer are unMineable and Phoenix Miner. You can use these two software packages together to handle the hashing and interaction with the rest of the DOGE blockchain network. Scrypt is less computationally intensive than Bitcoin’s SHA-256 hashing. This means even a personal computer could theoretically compete with purpose-built crypto mining equipment and receive DOGE rewards. You should make sure you know the risks of investing in cryptocurrencies and that you can afford to lose any money you put in.

  • Moreover, due to its fast transaction speed and unique market position, there are several investors who consider it as a worthy investment option for a longer term.
  • That can produce exciting short-term gains but is not a viable strategy for long-term investing success.
  • Every four years, the amount of Bitcoin released into circulation via mining rewards is halved, and its inflation rate is halved along with it until all coins are released.
  • Indeed, new ones launch on a seemingly constant basis, with SafeMoon and Chia just two of the most recent.

Any node that tries to change a transaction that was previously confirmed and added to the blockchain would have to re-hash every block. It would also have to propose the latest block faster than any other node. Rohit has extensive experience in credit risk analytics and data science.

How I lost $650,000 of crypto in SECONDS with a simple iPhone mistake

Dogecoin, meanwhile, was created by software engineers Billy Marcus and Jackson Palmer back in 2013 quite literally to poke fun at the hagiography surrounding Bitcoin. They used a popular meme at the time—a Shiba Inu dog with a purposely misspelled “doge” in the title. As of today, Dogecoin has a total market capitalization of $50 billion—putting it on par with Ford Motors or Volvo.

In 2015, both Palmer and Markus left Dogecoin, and a team of four part-time developers took over. It wasn’t until 2021 that Dogecoin’s popularity exploded, with cryptocurrency becoming much more mainstream and Dogecoin publicly gaining an important fan — Elon Musk. The Tesla (TSLA -3.92%) CEO sent Dogecoin’s price and market capitalization soaring several times after tweeting about the digital asset. He also mentioned it frequently while hosting Saturday Night Live. Trading and investing in digital assets is highly speculative and comes with many risks.

Robinhood, a traditional brokerage that enables crypto trades, also supports Dogecoin. Dogecoin is considered an “inflationary coin,” while cryptocurrencies like Bitcoin are deflationary because there’s a ceiling on the number of coins that will be created. Every four years, the amount of Bitcoin released into circulation via mining rewards is halved, and its inflation rate is halved along with it until all coins are released.

But in recent years, Dogecoin has become one of the most highly valued digital assets — thanks in large part to a devoted community of users who continue to promote it. Cryptocurrency analysts are ready to announce their estimations of the Dogecoin’s price. The year 2032 will be determined by the maximum DOGE price of $$3.28.

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After that, the coin grew its user base further with the help of the Reddit community (DOGE subreddit has currently 2.4+M “subshiber’)  and other social platforms. It moved the Dogecoin market cap in rates which not even the most bullish analysts could’ve predicted. The cryptocurrency market took Dogecoin seriously after its price skyrocketed at the end of 2017, making it one of the big players in the cryptocurrency world in a very short amount of time. Every year, cryptocurrency experts prepare forecasts for the price of Dogecoin.

Motley Fool Investing Philosophy

Elon Musk, the billionaire CEO of Tesla, has always been the biggest supporter of Dogecoin. Crypto experts believe that anytime in future, Musk’s support could drive Dogecoin to newer heights. This is clearly evident with the recent incident where Elon Musk replaced Twitter’s blue bird logo with its favorite ‘Doge’ meme created a blast in DOGE’s price. Post this major change, Dogecoin rose as much as 37% and also started trending on twitter. Since its inception in 2013, the price of Dogecoin remained quite flat for seven consecutive years. Then, finally the world’s largest meme coin witnessed a price change in December 2020.

With Bitcoin inching closer to the $50K mark, the buyers have crossed the $43K mark igniting a bullish blast in altcoins. Finding the extra push with market recovery, the meme coins are ready for a new breakout rally. Further, the biggest meme coin, Dogecoin, with a market cap of $10.8 Billion capitalizes on this recovery as the DOGE price skyrockets. Das has also stated earlier, “Any change in value of any so-called product is the function of the market, but unlike any other asset, our main concern about crypto is that it doesn’t have any underlying [value]. As a term, cryptocurrency is a fashionable way of describing what is otherwise a 100 percent speculative activity”. He also said that private cryptocurrencies have been created to bypass the system.

Acceptance of Dogecoin

It doesn’t derive value from another asset, as stablecoins do, or add value to any financial system, such as Ethereum (ETH -0.01%). Dogecoin’s biggest asset, aside from its entertainment value, is its community. Dogecoin prices are largely driven up or down by popular culture, celebrity endorsements and social media.

In June 2022, a Dogecoin investor filed a class-action lawsuit against Tesla CEO Elon Musk that accused him of running a cryptocurrency pyramid scheme involving Dogecoin. Since the initial complaint, the lawsuit has expanded to include several more plaintiffs and defendants. The suit alleges that Musk and the other defendants purposefully drove up the price of Dogecoin by 35,000% — from 0.2 cents to 73 cents — and then let it crash.

After that, it showed major upside in the first half of the 2021 bull run when almost all the tokens have marked their all-time highs. Dogecoin uses a fork of a cryptocurrency known as Luckycoin, which is now a defunct digital coin. Like any other cryptocurrency, Dogecoin can also be bought, sold or transferred and can be used for purchases. It runs on a proof-of-work network methodology where miners receive payments for validating Dogecoin transactions. Unlike Bitcoin, Dogecoin qualifies as an inflationary coin which means its supply is not limited rather it is indefinite. Currently, there are more than 139 billion Dogecoins in circulation.

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