Dogecoin Explained. How Will 2022 Treat It?
Dogecoin had its big moment in 2021. It spiked in price and gained a lot of media attention and community support. It remains one of the well-known internet-loved cryptocurrencies. Yet, it is important to understand whether it is worth investing in as of today.
Cryptocurrencies have been in public attention for a while now. A lot of people, especially young adults, are interested in it. For some, cryptocurrency investment proved to be a way to earn decent money. No wonder lots of students look into it.
However, as with any investment, there are risks that one should be considering. Students might not have the time to research deeply into the current state or future predictions. It is easy to go with where the media wind blows. Yet, it is a serious matter that should be treated accordingly.
As a student interested in crypto investment, you might say that there is simply not enough time to keep up with all the data. Students have to deal with the college curriculum and piles of papers due tomorrow, as well as part-time work and social life. But if you want to enter this market, you need to devote more thought to it. And there is a way to get some time for that with homework help by WritePaper available for all students. It is a professional academic platform that assists with all types of college assignments, from essays to term papers and more.
One can simply access expert help with editing, proofreading, or writing to use free time for other important matters. And if you want to know more about Dogecoin and what the future holds for it, just keep reading.
It is an open-source and peer-to-peer cryptocurrency that was invented as a joke. In 2013 Jackson Palmer and Billy Markus established it to make fun of all the hype around Bitcoin. That’s where the name comes from, too – back in the day. Doge was a popular internet meme.
It uses Litecoin technology and is based on Blockchain. Although it started as a joke, it gained popularity and community support. But the big breakthrough comes much later, in the year 2021.
This currency has several special features that set it apart from others, namely:
- It is infinite in the possible number of coins. Unlike Bitcoin, there is no end bar where all the coins are mined. People can mine and release an infinite amount of Dogecoins;
- It is mined with Scrypt technology, which means that it can be mined much faster than other coins. For example, the process of ratifying a new block that takes 10 minutes for Bitcoin will only take 1 minute for Doge.
- It is publicly supported by such names as Elon Musk and Snoop Dog.
In a nutshell, it uses the same blockchain technology as other digital currencies. In the year 2021, there were 130 billion Dogecoins in circulation.
For several years, it was a less known and valued title. It was just a fun Reddit joke and a way to support content creators on a website. But it didn’t enter the high-end competition.
The first time the value of it increased significantly was in 2017. It has to do with the overall crypto-verse bubble in 2017-2019. However, this rise went down just a year later.
In 2021, it experienced another huge increase in value and interest. Elon Musk publicly supported Dogecoin several times. There was also a conversation about Tesla accepting it as a payment option. Musk also claimed to work with the company on making the transaction algorithm more efficient.
The same year, AMC announced that it would accept Dogecoin for digital gifts.
As a result, Dogecoin sky-rocketed. At the beginning of the year 2021, it cost half a cent. And in May the same year, the value went up to 72 cents.
But this success wasn’t very long. The price dropped significantly the same year. As for the end of February 2022, it costs about 14 cents.
To understand the investment prospects of this currency, it is essential to analyze all pros and cons it comes with.
The pros are:
- Significantly faster transaction confirmation;
- Faster mining;
- Big and loyal community of supporters;
- It is used on various social platforms and in gaming to help content creators;
- It is accepted in some businesses and has real-life use.
An infinite number of coins means that it is an inflationary currency, which dramatically decreases investment potential.
Thus, the drawbacks are as follows.
- Mining is not very profitable for it;
- It doesn’t have Smart Contracts;
- It is less secure than other digital coins;
- It is real-life use is quite limited (according to Cryptwerk, it is accepted only buy 1,900 businesses worldwide);
- The transaction fee is comparatively not low enough for wide adoption.
Some sources claim that Dogecoin could gain $1 in value in 2022. However, it is far from becoming the truth as of now.
It has lost almost all its value gained in 2021. And there are no signs of it booming. Of course, the crypto-verse is even more unpredictable than traditional investment. Things can change overnight. Some titles might sky-rocket in a matter of minutes.
But, realistically, Dogecoin doesn’t have what it takes to stay for a long term and be a reasonable investment option.
It lacks an edge to compete with other titles. It is inflationary and has security issues. Transaction fees also make it not very profitable for real-time usage. And it is far from being widely accepted as a payment option.
As for today, there is little legitimate value behind it. It gained recognition on social media, and with the hype of 2021, it rose in price. But this spike went away almost immediately. Because if there is something unsustainable in this world, it is social media attention.
It is impossible to predict how 2022 will treat it for sure. But as far as all the information behind and the historic data, it is not a valuable investment.
One of the reasons why Bitcoin is the most valued currency among digital ones is that there is a finite number of it. This is what adds price to it. But when it comes to Doge, there are 5 billion released every year with no limit whatsoever.
The demand should surpass the offer for anything rising in price. And it is probably not going to happen here.
It is not sustainable in the long term. However, it can still be used to tip content creators. Or one can use it to get into the crypto-verse and learn all operations in small amounts.
Last year was a big one for Dogecoin. For a second, it gained all the attention and rose in value. But there are no reasons to believe it is a valuable long-term investment. Due to the nature of this currency and the security issues, it is not very promising. Its acceptability as a payment option is very limited, and there is no limit to new coins released.
Overall, it already lost the majority of the value it gained in 2021. It is probably going to stay on the market but won’t get into the major league.