Dogecoin does not require you to think about it too much. Fans of the cryptocurrency purchase it and hold it (a crypto term for “not selling”) before…well, until anything spectacular occurs, perhaps before you become wealthy.
Is it, however, really that simple?
The Origins of Dogecoin
It all began as a joke. The first cryptocurrency, Bitcoin, was a groundbreaking technological breakthrough that enabled everyone to exchange digital currency for a small fee without asking anyone’s permission. But Bitcoin was also open-source. This meant that everyone could duplicate it, which they did at one point. They accomplished this through clones like Litecoin and Peercoin springing up all over the place.
Dogecoin is a witty response to this trend. It’s a clone of Bitcoin (more specifically, Litecoin) that features the Shiba Inu dog and is almost always referred to in a silly language that abounds with dog- and moon-related metaphors. Two software engineers Billy Markus and Jackson Palmer founded it in December 2013.
Dogecoin has had a devoted following almost since its inception. It drew in those who liked the concept of cryptocurrency but decided to mock Bitcoin. Dogecoin also attracted people who enjoyed dogs. It even drew in others who weren’t especially interested in crypto but wanted to be part of the frenzy.
It’s not for everybody. Its co-founder Palmer stayed away from it, claiming in 2018 that Dogecoin’s skyrocketing price was a warning that the crypto market began to overheat.
Dogecoin, on the other hand, persevered. Dogecoin has grown to be bigger than it has ever been, owing partly to the fact that it does not need any active management from your side and, in part, to the crypto space recovering dramatically in 2020.
Is Dogecoin a Technically Sound Cryptocurrency?
Not at all. It is, in a sense, since it began as a clone of Litecoin, which is a technically sound cryptocurrency. It’s a password-protected online network that allows users to send DOGE to one another without requiring permission. It’s functional but not as stable or decentralized as Bitcoin.
Dogecoin, on the other hand, was never especially creative. There are some variations, such as the fact that it has a shorter block period than Litecoin. Unlike Bitcoin, DOGE’s supply isn’t finite — there is currently 129 billion DOGE in circulation, with more on the way. The most significant difference is that Bitcoin and Litecoin are actively maintained and modified regularly to fix vulnerabilities and flaws. Dogecoin receives regular updates, but it can take years for a new version to be published.
Elon Musk Stirs Drama
Elon Musk enjoys wacky stuff, and Dogecoin is certainly wacky, so… You get the idea. Musk, the CEO of Tesla and SpaceX, has expressed his admiration for Dogecoin on several occasions, often via Twitter, with his tweets often propelling the price of Dogecoin to new heights. At one point, the price of Dogecoin increased by more than 100 percent in response to Musk’s tweet. Musk explained why he likes Dogecoin in a Clubhouse interview in February. “Maybe the most amusing and ironic outcome will be for Dogecoin to become the currency of the future Earth,” he said.
What is the DogeChain Wallet, and How Does it Work?
DogeChain is a simple to use online crypto wallet dedicated to Dogecoin. It is, in reality, the official Doge wallet, created with the Block.io platform. The wallet has a sleek design and an intuitive user interface that serves the most basic wallet functions.
Glenn Marien created the wallet in 2013, but Block.io of San Francisco purchased it in 2014. Moreover, Block.io joined Cointelegraph in 2015 to diversify its portfolio.
Is the DogeChain Wallet Secure?
All data in the DogeChain wallet is encrypted, and decrypted is only possible with a user password. Since the service provider has no leverage over consumer assets, this puts the power into the hands of individual wallet users.
Both encrypted files corresponding to the user wallet and account information became stored in the cloud rather than on servers by DogeChain. This means that users would still have access to their money even if all of their servers were to crash simultaneously.
It is obvious from the above DogeChain security features that the service does not prioritize security. Multi-signature access, hierarchical deterministic features, and two-factor authentication are all notable security features that aren’t present. Having an unregulated wallet, on the other hand, raises the risk potential even further.
Will Dogecoin Ever Reach $1?
So you’ve seen the price skyrocket and believe it’s a decent investment? Before you take the plunge, hold on for a second.
Though Dogecoin has a large following and the backing of one of the world’s wealthiest individuals, the project isn’t as technically advanced as other big cryptocurrencies, including Bitcoin and Ethereum.
Consider it the stock of a business that manufactures next to nothing. It consists of a few sofas in an empty office but has a very cool dog logo that people love for some reason. Is it possible that the stock’s price will rise? Yes, of course. But why not?
What Should You Do in the End?
Financial experts advise caution when it comes to cryptocurrencies of every kind. After all, any commodity that might appreciate solely as a result of a mention on a prime-time TV show or a social media thread is worth considering before pressing the “buy” button.
“Dogecoin in some ways epitomizes cryptocurrency, having begun as a joke and now finding itself surging in value,” says Laith Khalaf, financial analyst at AJ Bell. This demonstrates how difficult it is to anticipate with any degree of certainty which cryptocurrencies, if any, will remain stable.
“This sort of carefree, devil-may-care attitude to life is admirable in the light of a good laugh, but it doesn’t make a good bedfellow for sound financial planning.”
“Investors should be cautious about being swept up in this bandwagon mentality because Dogecoin acts as a risky gamble whose value has no credible basis,” warns Susannah Streeter of Hargreaves Lansdown.
“Traders attempting to ‘game’ the system and others looking to profit from potential price increases rather than using the coins as a medium of exchange have driven demand. It’s difficult, if not impossible, to predict when demand will wane and prices will begin to fall.”