Is Dogecoin a Serious Cryptocurrency?

dogecoin serious?

Since the release of Bitcoin in 2009, cryptocurrencies have become an integral part of commerce in the online marketplace. The ability of these currencies to be utilized in international transactions without control from a centralized governing body has allowed for a free-flowing exchange of goods and services. Obviously, Bitcoin is most well know and widely used. However, other currencies like Ethereum, Ripple, and Litecoin (amongst others) have been introduced within the past few years and have gained traction as viable alternatives.

With the popularity of blockchain technology, there have been many software engineers looking to try out working with this new and exciting tech. In that scramble, many different smaller and obscure coins have been created. One of these lesser known currencies is Dogecoin. What chance does a fringe currency have in a very competitive and crowded market? In this article, we will look at the creation, infrastructure, and users of Dogecoin. Is it built on solid technology and can it feasibly become a big player in the cryptocurrency world?

 

The Beginnings of Dogecoin

Released in December of 2013, creator Billy Markus hoped the currency would be seen as a more “fun” alternative to Bitcoin. The adorable Shiba Inu mascot (which is on the face of the coin) quickly endeared the cryptocurrency to Reddit and Twitter users. The coin has spawned a very loyal community of followers and users who utilize the currency mostly to “reward” or “tip” others for exchange for good information (Mostly info about cryptocurrency). With the strong backing of a large community, it appeared the currency could be headed for sustained value growth. After all, the most difficult hurdle for any new currency is inspiring belief in its value. Early on, it appeared that Dogecoin might be on its way to eventually become a legitimate high-value coin.

The Infrastructure and Usage

Unlike Bitcoin, there is no cap on the number of coins that can be mined. Thus, it’s considered an “inflationary” coin. Inflationary coins are said to be able to stave off a rapid inflation rate as time goes by. This, in conjunction with very short blockchain times (1 minute, while Litecoin takes 2.5 minutes) and minimal transaction fees make the currency easily accessible and desirable to a large user base. However, this has resulted in the community employing a very “spendthrift” attitude towards the coin. Some have suggested that you might be more discerning with doling out a “like” on someone’s page than you would be with spending this currency. Knowing how freely people click the “like” button, this does not bode well for Dogecoin’s value going forward. When any currency is so flippantly spent, it is generally perceived to be more symbolic than valuable.

Price History

From its inception back in December of 2013 to Mid April of 2017, Dogecoin’s price predominantly hovered around $.0002 USD. For the most part, it mirrored the performance of many other small fledgling cryptocurrencies that were trying to gain a market share of the ever-growing fad. Not surprisingly, Dogecoin’s value began to skyrocket in December 2017. Clearly, this was a product of the crypto price boom of that time period. Pretty much every crypto saw unprecedented price bumps, as there was an outright stampede of investors trying to secure a stake in the next “hot” crypto. In early January 2018, Dogecoin’s spiked to nearly $.016 with a volume close to 200,000,000. However, the run of great prosperity was short-lived. Dogecoin settled closer to $.006 within a few weeks. In the ensuing months, the value has fluctuated between $.006 and $.002. As of this writing, the value currently sits at $.0028.

Positives and Negatives

The overwhelming support of the Dogecoin-using community is the currency’s best ally. The group fiercely promotes Dogecoin, encouraging merchants and online retailers to accept it. The infancy of any highly successful business is usually accompanied by a groundswell of loyal supporters who advocate for the product. Can this work in the crypto world? It’s hard to say, as the competition and volatility in the crypto market make it hard for the beginner investor/user to choose which coin has the best upside.

Dogecoin’s prominent role in “tipping” can be viewed both positively and negatively. It is regularly used as an internet “gratuity”. Basically, it’s a way to show gratitude for something from which you’ve benefited online. This appears to be the most prevalent use of the currency, which may or may not lead to more value down the road. It can be argued that this is counterproductive towards increasing it’s value, as anything given “out of appreciation” online is often perceived as nothing more than a “like” or a “5-star rating”.

Conclusion

It’s tough to say whether or not the future is positive for Dogecoin’s growth and value. While it’s fan base of die-hard users might eventually inspire confidence in investors and merchants, the reality seems to be that it is not very seriously considered to be the type of crypto that will be widely used in most day to day transactions. We may see another crypto “speculation boom” at some point (like the end of 2017), but it’s not likely. Therefore, you can only really go by the average value numbers. Dogecoin is essentially worth what it was this time 18 months ago and does not appear primed for a breakout to mainstream commerce.