Tracking Dogecoin: Millions Invested In Meme Coin

Dogecoin, the Shiba Inu-faced cryptocurrency, has experienced a surge in value since its inception in 2013. Initially created as a joke, Dogecoin has since gained a loyal community of supporters and its value has increased by more than 37,000% in eight years. In this article, we explore the factors that have contributed to Dogecoin's monumental rise and examine its performance as an investment prospect.

Dogecoin's value surge in 2021

Dogecoin, the cryptocurrency that began as a joke, saw its value surge in 2021. On April 16, 2021, Dogecoin's value rose to an all-time high of $0.45, up 400% from the previous week. Its market cap was nearly $45 billion, and its value had increased by more than 5,000% since the start of the year.

Dogecoin's surge in popularity can be attributed to several factors, including the direct listing of cryptocurrency exchange Coinbase Global, which drew renewed focus to cryptocurrencies, and the support of high-profile individuals like Elon Musk, who frequently tweeted about Dogecoin, and Mark Cuban, who announced that his NBA team, the Dallas Mavericks, would accept Dogecoin for purchases. Dogecoin also enjoyed cult status on Reddit, where a group of investors decided to propel its value.

The rise in Dogecoin's value contributed to an outage on the electronic trading platform Robinhood, as it struggled to keep up with the "unprecedented demand". The surge in Dogecoin's value also prompted concerns from experts about a potential speculative bubble in the cryptocurrency market.

Dogecoin's value continued to increase throughout 2021, surpassing the $0.50 mark in May and ending the year up more than 37,000% from eight years prior.

Elon Musk's influence on Dogecoin

Musk's first Dogecoin-related tweet occurred on December 20, 2020, when he simply wrote, "One Word: Doge." This caused the value of Dogecoin to rise by 20%. A series of tweets in early February 2021 with captions such as "Dogecoin is the people's crypto" and "no highs, no lows, only Doge" led to a 40% increase in the value of Dogecoin. Musk's influence on the coin was further demonstrated when he appeared on Saturday Night Live on May 8, 2021, causing Dogecoin to fall by 29.5%.

Musk's tweets about Dogecoin have sparked debate about the influence of high-profile individuals on the cryptocurrency market. His actions have been called market manipulation by some, although they are not illegal since cryptocurrencies are not regulated like stocks.

Dogecoin's surge in popularity has also been fuelled by its online community and its acceptance by traditional companies as a payment option due to its low transaction fees and Musk's support.

Dogecoin's history and creation

Dogecoin was created in late 2013 by software engineers Billy Markus and Jackson Palmer. The two wanted to create a payment system as a joke, satirising the hype and wild speculation in the cryptocurrency world at the time. Dogecoin was officially launched on 6 December 2013, taking influence from the famous 'doge' meme, which features an image of a Shiba Inu dog with multi-coloured comic sans text that appears as the dog's "thought bubbles".

Markus and Palmer based Dogecoin's code on Luckycoin, derived from Litecoin (a Bitcoin fork). They used a randomised block mining reward, but this was changed to a static reward in March 2014. Dogecoin uses Litecoin's Scrypt technology and proof-of-work (PoW) on its blockchain.

Dogecoin was a near-instant success, gaining popularity on sites such as Reddit, where it was used as a tipping currency. Within the first month of its launch, there were over a million unique visitors to Dogecoin.com.

In 2014, both Markus and Palmer left the development efforts, and a Dogecoin Core Development team was formed. The team has been maintaining and developing Dogecoin since then.

Dogecoin has been used primarily as a tipping system on Reddit and Twitter to reward the creation or sharing of quality content. It has also been used for several charitable causes. For example, in 2014, the Dogecoin community raised 26.5 million Dogecoin (worth around $30,000 at the time) to send the Jamaican bobsled team to the Sochi Winter Olympics.

How to buy Dogecoin

Dogecoin is a cryptocurrency that was created as a parody of Bitcoin. It has gained significant attention due to its meme-inspired branding and support from Tesla CEO Elon Musk. If you want to buy Dogecoin, here is a step-by-step guide:

Step 1: Sign up for a crypto exchange

Create an account on a well-known cryptocurrency exchange, such as Coinbase, Kraken, or Binance. Provide information such as your email address, name, and phone number.

Step 2: Verify your account

Verify your account with personal details like proof of address. You may also need to undergo a Know Your Customer (KYC) verification process.

Step 3: Deposit funds to your account

Deposit money into your cryptocurrency account through various methods, such as credit or debit cards, depending on the exchange's policies and your jurisdiction.

Step 4: Find DOGE, check market price, and buy

Search for Dogecoin (DOGE) on the exchange, check its market price, and make a purchase. Generally, it takes less than a minute before the DOGE appears in your crypto exchange wallet. After purchasing, you can transfer your Dogecoin to other wallets.

Alternative Ways to Buy Dogecoin

You can also buy Dogecoin through peer-to-peer (P2P) marketplaces, which allow you to buy DOGE directly from other individuals instead of using a centralized exchange. These platforms match buyers and sellers and provide a secure escrow system to facilitate the transaction.

Another way to acquire DOGE is by exchanging it with other forms of crypto in your wallet. For example, if you have Bitcoin or Ethereum, you can exchange them for Dogecoin on exchanges like Uniswap and Kraken. This method can be faster and more cost-effective than buying DOGE with fiat currency.

Dogecoin's risks and concerns

Dogecoin has experienced a turbulent history and is prone to abrupt price changes. Here are some of the risks and concerns associated with Dogecoin:

Volatility and Speculation

Dogecoin is highly volatile and prone to large surges and dips in price. Its value is largely driven by media attention and the influence of prominent individuals like Elon Musk. This can lead to a fear of missing out (FOMO) among traders, resulting in sudden inflows of cash that push prices higher. However, these surges are often followed by sharp crashes as large-volume traders engage in profit-taking.

Security Concerns

While cryptocurrencies are secure by design, they are not immune to hacks. Dogecoin has experienced wallet hacks and frauds, resulting in significant losses for its users.

Centralization Concerns

Dogecoin's success is closely tied to Elon Musk's support, and he has been accused of market manipulation through his tweets. Additionally, it is reported that a single anonymous entity, known as a "whale," controls 28% of all Dogecoin in existence, with 70% of the supply held in just 100 wallets. This concentration of ownership gives a few individuals significant influence over the price of Dogecoin, which can be moved in either direction.

Limited Development and Updates

Dogecoin has not seen any major updates since 2015, and its development is handled by a small team of part-time developers. This lack of active development could impact its ability to react quickly to technical issues or security breaches.

Scams and Ponzi Scheme Allegations

Dogecoin has been described as a form of Ponzi scheme, where early investors benefit financially by drawing in new purchasers and driving up the price. The lack of a supply cap, as seen in other cryptocurrencies, further contributes to these concerns.

Regulatory and Adoption Uncertainty

The cryptocurrency industry is relatively new and unregulated, and it is unclear how regulations will be introduced and shape the market. Additionally, while Dogecoin has gained mainstream attention, it faces competition from other cryptocurrencies with larger user bases and more active development.

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