Dogecoin Investing, Elon Musk: 5 Things To Know About Dogecoin
Dogecoin is the new internet sensation. Billionaire Elon Musk is dubbed the “Dogefather” and loves to tweet about Dogecoin from time to time. What else should I know about Dogecoin?
Dogecoin is a cryptocurrency, like Bitcoin. What’s a cryptocurrency? Click here to learn more and then come back to this post to read more on dogecoin. Dogecoin was created at least in part as a joke for crypto enthusiasts and took its name from a once-popular meme. The name “Doge” is an Internet meme that became popular in 2013. The meme typically consists of a picture of a Shiba Inu dog with multicolored text in Comic Sans font in the background. Despite this odd-name origin story, Dogecoin has skyrocketed in popularity in 2021.
What is Dogecoin?
To make fun of Bitcoin, Software engineers Billy Marcus and Jackson Palmer created Dogecoin in late 2013. Palmer branded the cryptocurrency’s logo with the famous Shiba Inu meme. In its early days, an online community of enthusiasts arranged publicity stunts to raise Dogecoin’s profile, for instance, gathering funds to send the Jamaican Bobsleigh team to the 2014 Olympics– by raising more than $30,000 worth of Dogecoin, among other public events.
Billy Markus famously revealed that he sold off his entire dogecoin holdings in 2015 so that he could afford a Honda Civic. At some point in 2021, Dogecoin soared so high in price, its market value was worth more than Honda. As Elon Musk illustrated, fate loves irony.
Why is dogecoin so important? Here are five things to keep in mind on dogecoin:
1. Dogecoin is a cryptocurrency that runs on blockchain technology
Similar to Bitcoin, Dogecoin’s Blockchain is a distributed, secure digital ledger that stores all transactions made using a decentralized digital currency. Dogecoin’s blockchain network uses cryptography to keep all transactions secure and help avoid counterfeit or fraud. People referred to as miners use computers to solve complex mathematical equations to process transactions and record them on the Dogecoin blockchain. Due to the work carried out by the individuals of the system (or their computers), this process is called a “proof of work” system. In a “Proof of Work” system, for processing transactions and supporting the blockchain ledger, miners earn additional Dogecoin, which they can then hold or sell on the open market.
2. Dogecoin Could Be Elon Musk’s Favorite Cryptocurrency
Elon Musk needs no introduction. Elon is a billionaire; founder of PayPal, Tesla, SpaceX, NeuraLink, and The Boring Company. His contributions to civilization as we know it have been tremendous and for him to be fully supportive of Dogecoin has gathered the attention of a crowd, a large one. In 2021, Musk has been famously tweeting to his 57 million Twitter followers plenty of cryptic tweets expressing how much he loves the cryptocurrency, Hosting Saturday Night Live to talk about Dogecoin, and even promised to put a "dogecoin on the moon" with the help of his private rocket company, SpaceX. To no surprise, Twitter polls were taken to name Elon Musk the CEO of Dogecoin and he dominated most of them. As Elon kept tweeting about Dogecoin, popularity and purchase orders grew; leading the price to skyrocket. Numerous people, who have invested heavily in Doge, are hoping Elon’s support leads to more support among other celebrities, influencers, and billionaires to surge the price.
3. Dogecoin vs. Bitcoin: Can Dogecoin reach Bitcoin’s price?
Bitcoin is dubbed “the father of all coins”. Dogecoin has a few significant differences from Bitcoin. First, Bitcoin has a fixed limited supply of 21 million coins. No more Bitcoins will be created. This limit, known as the hard cap, is encoded in Bitcoin's source code and enforced by nodes on the Blockchain. As of writing this article, there are roughly 18 million Bitcoins in circulation. On the other hand, Dogecoin has no hard cap. Dogecoin is an inflationary token with an unlimited supply. Currently, 15 million Dogecoins are minted every day, joining the piggy bank of 130 billion Dogecoins already in circulation as of writing this. While this may sound crazy, this unlimited supply structure was part of the joke back in 2013.
On the bright side, Dogecoin is quicker and easier for miners to complete the mathematical equations and record transactions, which makes Dogecoin, to an extent, more efficient for processing payments.
Will Dogecoin ever reach Bitcoin’s price? Impossible. Why? Market cap. According to Investopedia.com, Market capitalization refers to the total dollar market value of a company's outstanding shares. Commonly referred to as "market cap" it is calculated by multiplying the total number of a company's outstanding shares by the current market price of one share. As of writing this, Bitcoin is priced at USD 32,596 with 18,740,718 Bitcoins in circulation. This makes the market cap (32,596 times 18,740,718) roughly 610 billion dollars. There are roughly 130 billion Dogecoins in circulation. Hypothetically, if Dogecoin was currently priced the same as Bitcoin, the market cap would be $4,237,479,999,999,999,500 ($32,596 times 130 billion Dogecoin). I don’t even know how much money that is... but I know it doesn’t currently exist even if you were to gather every dollar in the world to buy Dogecoin. To my surprise, a lot of people are not familiar with the concept of market cap and blur out impossible price predictions on Dogecoin. Help them out now that you know.
4. Dogecoin is not useless
Depending on who you ask, Dogecoin is useful. There are plenty of things you can buy with Dogecoin. The Oakland A’s, a Major League Baseball team, made headlines by selling tickets in exchange for Dogecoin. Mark Cuban, Owner of the Dallas Mavericks, announced the team was accepting Dogecoin on the team’s shop. Mastercard famously partnered with BitPay to launch a prepaid crypto card. To use the card, you'll first need to fund your BitPay Wallet with supported cryptocurrency. Once your wallet is funded, you can use the BitPay Card anywhere Mastercard is accepted. Guess who is part of the supported cryptocurrencies? Dogecoin. Technically, you can use Dogecoins to buy in places that accept Mastercard (with your BitPay card). On the bright side, Dogecoin will become more useful as more companies allow people to spend their holdings.
5. Dogecoin HODLers and Whales