Dogecoin Stock: Worthy Investment Or Risky Business?

Dogecoin is a cryptocurrency that was created as a joke in 2013, inspired by the popular Shiba Inu meme. Despite its humorous origins, it quickly gained popularity due to its light-hearted nature and active community. Dogecoin has seen significant growth since its launch, with its price rising by over 15,000% in the first half of 2021. It has also gained support from celebrities such as Elon Musk and Snoop Dogg, and is currently the eighth-ranked cryptocurrency by market capitalization. However, Dogecoin's value is highly volatile and it is considered a risky investment. So, should you invest in Dogecoin stock?

Dogecoin's price volatility

Dogecoin is a highly volatile cryptocurrency. It was created in 2013 as a joke about price speculations in the cryptocurrency market, but it has since become a multi-billion-dollar crypto icon.

Dogecoin's price history has been characterised by extreme fluctuations. The cryptocurrency experienced two short-lived price jumps during its first four years on the market. The first occurred when its price soared by 1,061% in 15 days, and the second in March 2017, when its price rose by 1,494%. Dogecoin's price then fell below $0.001 until November 2017, when it found support from bullish investors.

Dogecoin's price has been heavily influenced by Tesla CEO Elon Musk, the crypto's self-appointed "Dogefather". Musk's social media activity has driven up Dogecoin prices on several occasions. For example, in 2021, Dogecoin's price and market capitalisation soared after Musk tweeted about the digital asset and mentioned it while hosting Saturday Night Live. However, after his appearance on the show, Dogecoin's value plummeted by more than 75% in less than two months.

The high volatility of Dogecoin is partly due to its unlimited supply and the fact that its price is largely driven by social media movements and hype.

Dogecoin's long-term viability

However, Dogecoin has its advantages. It is much more efficient than Bitcoin, with faster mining and far less energy usage. It also has very low transaction costs. Dogecoin also has a strong, passionate community of supporters, and its future depends on new projects, community adoption and celebrity endorsements.

Dogecoin's viability in the long term depends on several factors. If the community continues to push for its adoption as a payment option, it could lead to large-scale adoption and an increase in price. Its development team could also create new projects that add value to the token and bring in new users.

Dogecoin's price has increased by over 40% since the start of 2024, and it is never too late to invest in any cryptocurrency, including Dogecoin. However, it is important to approach investing in Dogecoin with caution due to its volatility and potential for fluctuations in value.

Dogecoin's transaction fees and processing times

Dogecoin transactions are faster and cheaper than Bitcoin transactions. The usual fee to send a Dogecoin transaction is ~0.0025 DOGE, but the fee can vary depending on the specifics of your transaction and network conditions. Between December 2020 and January 2021, the fee for a Dogecoin transaction increased by over 1500%. Transaction fees refer to the money paid to the cryptocurrency's miners to get transactions accepted. Cost increases can occur when user numbers increase as the blockchain has limited space available to process all the transactions.

Dogecoin's blockchain uses the same proof-of-work mechanism as Bitcoin for adding data, but Dogecoin's mining code was originally copied from the LuckyCoin crypto project, a fork of Litecoin (LTC), which is a fork of Bitcoin. Dogecoin's mining is faster than Bitcoin's and requires far less energy, so it doesn't have anywhere near the same environmental impact.

Dogecoin's community and public perception

Dogecoin has a passionate community of supporters, known as "Shibes", who have been responsible for several charitable initiatives. These include:

• Sending a Jamaican bobsled team to the Olympics
• Providing service dogs to children with special needs
• Building wells in Kenya
• Sending Olympians to Russia
• Sponsoring NASCAR driver Josh Wise

Dogecoin was started as a joke in 2013 by software engineers Jackson Palmer and Billy Markus, who intended to make a coin that no one would seriously invest in. The creators have since left Dogecoin, and it is now run by a team of part-time developers.

Dogecoin's community cares about "supporting each other, being kind, teaching people about cryptocurrency, fundraising, having fun, making memes, and being absurd". This is summarised in Dogecoin's unofficial tagline: "Do Only Good Everyday".

Dogecoin's creator, Billy Markus, has expressed disappointment over what he sees as greed among members of the Dogecoin community. He has reminded people of the true value of the cryptocurrency: "joy, kindness, learning, giving, empathy, fun, community, inspiration, creativity, generosity, silliness, absurdity".

Dogecoin's public perception has been heavily influenced by social media and public figures such as Elon Musk, who has repeatedly used his Twitter account to discuss the cryptocurrency. Musk has been credited with Dogecoin's surge in popularity in 2021, with his endorsements notably boosting its price.

Dogecoin's potential future uses

Dogecoin has evolved from its origins as a joke cryptocurrency, and its supporters are increasingly comparing it to Bitcoin. Dogecoin's potential future use cases include:

• Payment method: Dogecoin's low transaction costs and fast transaction speeds make it a viable payment method. One homeowner in Utah has even offered a 10% discount on their $389,000 home if the buyer pays in Dogecoin.
• Store of value: Dogecoin's passionate community of supporters and its limited supply could make it a store of value, similar to Bitcoin.
• Commerce: The Dogecoin Foundation seeks to make Dogecoin the de facto means of exchanging goods and services globally. The director of the Dogecoin Foundation, Timothy Stebbing, has been encouraging merchants to accept Dogecoin for purchases.
• Tipping: The Dogecoin team is working on the GigaWallet, a free drop-in solution for online tipping and commerce through the integration of regular non-custodial wallets with the Dogecoin network.
• Transport: Elon Musk's Boring Company now allows customers to pay for rides on its Las Vegas transit system with Dogecoin.

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