It started as a harmless experiment, but the cryptocurrency created by enthusiasts for enthusiasts has managed to conquer the world. It has overcome three crypto booms and has maintained its price and development prospects. Today, Dogecoin is considered to be one of the oldest currencies in the crypto world, not bound by smart contracts, controversial decisions, constant hostility in the community, and uncontrolled forks. How can DOGE achieve such popularity, and what is it like from a technical point of view?
The coin is based on the modified Litecoin protocol. Initially, DogeCoin copied the parent cryptocurrency in building a chain of blocks, confirming mining, and was a standard fork.
The main difference was the atypical attitude of the community towards it. Created as part of a meme related to a dog, it quickly gained popularity, and proved its worth.
Dogecoin’s turnover exceeded Bitcoin in 2013, before the serious development of Ethereum technology and smart contracts.
During the crypto boom of 2018, the price reached its maximum on three occasions. It even became a financial haven after dumping ERC-20 tokens. However, after the crypto boom’s decline, the quotes returned to standard indicators, and Dogecoin matched the correlation with the parent cryptocurrencies.
The system uses a typical proof-of-work method for generating issues. It means that it has all the disadvantages of a first-generation blockchain:
Due to the complexity of mining, the speed of generation and decryption decreases exponentially. Today, there are more than 125 billion units in circulation.
In 2018, the company provided a demonstration technology Dogethereum, which allows the conversion of current coins into ERC-20 contracts. According to the developers, the technology is aimed to combine the first-generation Blockchain with Ethereum-based cryptocurrencies.
Due to the high issue rate associated with low computational complexity, the cost of the coin has never been high. As of mid-2020, the price ranges from USD $0.0033 per coin to $0.0039.
You can see the current DOGE/USD rate on the interactive chart.
DOGE ranks 40th in terms of capitalisation, which is USD $416,446,781 million (as of 26.08.2020).
The processing time of financial transactions usually takes 6 minutes. At times of peak loads, there can be additional queues and changes in the remuneration of miners for the transfer in the form of priority nodes, which can greatly increase the transfer cost.
The award was established in 2014 and is 10,000 Doge, which is equivalent to approximately £26 at current value. The speed of finding blocks when using powerful Bitmain LTC, sharpened by the Scrypt algorithm, is approximately one block per minute when combined into pools. The remuneration is distributed in proportion to the invested computing power.
As for the mining costs, it budges on the efficiency of LiteCoin about 1000 times. The fact is that decrypting LTC’s reward is approximately USD $2,500, with a comparable complexity of calculations. Nevertheless, enthusiasts are not discouraged, because they are hopeful about the project’s entire infrastructure and want to get their X’s (and that is exactly what happened in 2018).
The history of the formation of the “dog blockchain” is inelaborate and simple. In fact, it was one of many forks of Bitcoin and Litecoin created between 2011 and 2014. At times of the crypto boom, when BTC rose above USD $100 per unit, Jackson Palmer, the Australian, came up with an unusual idea — he wanted to create a positive image of crypto projects for people who were not interested in the world of cryptocurrencies at all.
Along with American, Billie Marcus, he decided to create an easy-to-understand cryptocurrency with a fun logo. In the context of the peak popularity of the meme in 2013, the choice was obvious.
Interesting fact: the popularity of the project increased several times for a short period with the second coming of the meme. Then the price returned to its original value.
Since enthusiasts at the time did not possess any mathematical background, they chose the Litecoin model as the basis.
Dogecoin was released on December 6, 2013, while the full announcement, with a wallet, Scrypt algorithm and dog mascot, took place two days later, on December 8, 2013.
The DOGE user community is recognised as one of the friendliest in the crypto world. They are known for their charitable actions aimed at resolving environmental disasters, working on social platforms and towards changing the Internet infrastructure.
Moreover, it is actively used and informally integrated into the Facebook social network. For instance, to pay content makers. The low cost combined with a fixed transaction fee of 1 DOGE made it one of the most popular coins with the nicest community.
Right at the beginning, the users formed the Dogecoin Foundation, which is engaged in charitable actions and some of their notable projects include the following
The token which was originally created as a joke, is now available for trading on almost all known crypto markets, including decentralised exchanges, and has a thriving community, as well as promises to have significant developments planned for the future.
Furthermore, let’s not forget about periodic updates in the core code, connecting smart contracts, attempts to solve the scaling problem and the fixed speed of coin emission. Unlimited generation of coins allows to avoid uncontrolled price increases and does not require a drastic increase in the complexity of decryption for mining.
It is worth mentioning that this is a first-level fork that is very much correlated with BTC. It is not linked to frozen ERC-20 contracts, which makes it possible to assess its liquidity in relation to other cryptocurrencies fairly accurately.
Despite its absolute low liquidity (the total value of all Dogecoin coins does not exceed USD $0.5 billion), it has a good indicator of average liquidity. Due to low price and a large amount of currency in everyday use, it is almost impossible to move the volume of trading and create an avalanche of momentum.
When trading, you should focus on key levels and moving averages. Considering the lagging correlation coefficient for Bitcoin, trade only on official exchanges, such as EXMO.
As for the fundamental analysis for the long term, according to the data on the project development, it may experience a serious influx of capitalisation with the integration of Dogethereum technology. It will allow Аforks to form and create an internal infrastructure.
Since the asset is more than doubly funded from non-Fiat sources, its correlation to BTC rates is close to 100%.
The beginning of 2021 turned out to be very successful for Dogecoin. Fueled by Elon Musk’s tweets and restrictions to buy GameStop and AMC, the meme-based coin that was launched as a joke is now seeing its biggest pump, with its price soaring by more than 500% in January 2021. Elon Musk, who is already known as DOGE’s biggest fan, pointed out that Dogecoin could become the “currency of earth in the future”. And while this does sound like a joke, no one can deny that the world is taking DOGE quite seriously.
Almost everyone who is familiar with Dogecoin knows that social media is the driving force behind its price action. On February 4th, Elon Musk tweeted about Dogecoin several times and the price of the so-called “people’s crypto” increased by about 50% just within a day. The Tesla CEO shared a picture of a rocket soaring past the moon and followed it up with a one-word tweet “Doge”. Well, we don’t know whether he did want to send the value of the meme coin over the moon or was just joking, but the coin did spike considerably.
In January 2021, Dogecoin price ups and downs were mainly caused by the Wall Street Bets (WBS) Reddit group. The participants of this group triggered the GameStop short squeeze, which, in its turn, resulted in huge losses for short sellers and hedge funds. Soon after that, on January 28th, Robinhood and other brokerages halted the buying of GameStop and other stocks. Those Reddit investors who were still very enthusiastic about trading shifted their attention to crypto and DOGE in particular.
What’s more, on the very same day, WSB Chairman, a Twitter user with almost 750,000 followers, tweeted “Has Doge ever been to a dollar”. Inspired by the Wall Street Bets group, various other social media groups also started pumping DOGE’s price, trying to reach the desired $1 mark. The price of the famous meme crypto has almost instantly rocketed to its all-time high of $0,08 only to drop down to $0,02. It then recovered slightly and spiked to $0,047 after Elon Musk tweets.
As of February 8th, 2021, Dogecoin costs $0,07. And while the price of this meme crypto is very difficult to predict, many people are very optimistic about DOGE.
To make a purchase with a cold wallet, you need to download the official app on the project’s Github page.
In addition, online wallets are available:
You can use the official Ledger Nano C hardware wallet for greater security.
The best way to purchase and store crypto money is the EXMO exchange, among the advantages of which are DDOS resistance, the ability to convert to Fiat and back quickly, and a high level of security.
Currently, Dogecoin is one of the most significant coins on the market. Despite the small total funding, it has a stable community, high relative liquidity and good profitability from mining.
Also, the project team has excellent prospects, considering the possibility of integrating their project in the direction of smart contracts, which will allow further use of the coin – not only as a payment method but also to form entire subsystems based on it.