Dogecoin is a cryptocurrency that was created by Billy Markus as a joke in 2013. Nevertheless, it must be underlined that it wasn’t created to ridicule Bitcoin, but rather to admire it, however in a satiric way. The name is derived from the famous meme of Shiba Inu, a dog that was misspelled as DOGE and no one predicted success to Dogecoin. Although created as a lighthearted version of crypto, it gained its popularity in 2021 and has become the fifth-largest crypto. The credit partly goes to Elon Musk.
Dogecoin is a cryptocurrency like any other - it works based on blockchain technology with the presence of the ledger that keeps track of all transactions, using cryptography to secure all information. It works on the system proof of work, exactly like Bitcoin does, so there are miners who confirm transactions and get rewards in form of DOGE which can be used for their purposes. In this term, Dogecoin is way efficient as the mathematical processes are not so complicated and thus, the mining is faster.
DOGE can be used for payments or purchases. It can serve as a tool of investment as well. The price in 2020 was $0.003 and nowadays (June 2021) it is $0.370857. That is due to Elon Musk and his tweets in which he honors Dogecoin as the future number one in the crypto world.
Nevertheless, it is not recommended to keep it as an investment. The main reason is that there is no limitation of Dogecoins that can be mined, so the problem with inflation arises. Millions of Dogecoins are created every day for which are miners paid. There is no limitation so that miners do not have to work harder to mine a new block and thus, the price can be very speculative and not sustainable for a longer period of time. Also, the security is not as perfect as that Bitcoin or Etherum has, with the higher risk of attacks.
Like all cryptocurrencies, Dogecoin is also very speculative and nowadays not recommended for investment. Nevertheless, it can be different in the future as no one knows which path Dogecoin will take.
