On Dec. 6, 2013, Billy Markus and Jackson Palmer decided to combine their dearest of the internet’s nearly beloved Shiba Inu (aka “Doge”) with their passion for cryptocurrency. And thus,
At commencement, Dogecoin was nix more than a goofy joke, with its beautiful Shiba Inu mascot and silly proper noun. But as time went on, more and more people started to have it seriously, and before long, Dogecoin had become a surprisingly legitimate cryptocurrency, used past people all over the world for online transactions.
But the real fun began in 2021, when Dogecoin experienced a massive surge in popularity, thanks in function to the rise of meme culture and the support of some loftier-profile celebrities. The value of Dogecoin skyrocketed, making many early adopters rich. Was the once-ridiculous joke turning into a serious investment opportunity?
Two years agone, one Dogecoin was worth roughly one-third of a penny. The self-described joke token had a total marketplace footprint of $409 million on Dec. fifteen, 2020. Then,
Tesla CEO Elon Musk started to promote the meme coin on Twitter, inspiring investor groups to form in various online forums. The digital coin was briefly worth as much equally $88.8 billion, and then the rocket send ran out of fuel.
Today, Dogecoin trades 88% below the pricing elevation of May 8, 2021. Still, it remains the ninth-largest cryptocurrency on the market place with an $11.half dozen billion market cap. Is it time to take the cute crypto joke seriously?
Three signs of a serious Dogecoin future
1. A large and growing number of merchants have Dogecoin as a class of payment
You tin’t purchase a Tesla automobile with Dogecoin, merely Musk’s e-commerce portal accepts this digital currency as payment for other Tesla-branded gear, like bomber jackets and caps. The shop doesn’t support
Bitcoin, or any other cryptocurrency — it’southward Dogecoin or dollars.
That’south an extreme example merely many other retailers accept Dogecoin aslope other cryptos, usually including Bitcoin and Ethereum. Prominent examples include the
Newegg estimator hardware e-tailer and Mark Cuban’south Dallas Mavericks basketball game organization.
Then Dogecoin can actually be used like normal money or credit cards — sometimes.
2. Dogecoin has a relatively depression transaction fee, making it an affordable option for online transactions
The average transaction fee for a Dogecoin payment currently stands at 1.20 DOGE, or $0.11. That’s lower than Bitcoin’southward average fee of approximately $1 per transaction and Ethereum’s $0.53.
More than to the signal, these cryptocurrencies handily crush the transaction fees for onetime-school credit cards. Credit card issuers like
American Limited accuse between 1.15% and 3.3% on each transaction, plus a smaller assessment fee. And the merchant’s card processing network besides wants a small cut of each purchase.
In that visitor, Dogecoin stands out as a consumer-friendly payment option.
3. The Dogecoin user community is numerous, noisy, and committed to its success
The r/dogecoin subreddit on Reddit sports ii.4 million subscribers. On Twitter, the official @Dogecoin business relationship has 3.6 million followers. Then when these groups share an idea, their combined vocalization can move the marketplace in a bustle.
Iii signs that Dogecoin isn’t totally serious still
1. The Dogecoin platform is rarely updated, leaving the blockchain network vulnerable to dangerous bugs and security holes
That massive army of Dogecoin fans on social media has not generated a vibrant developer team. Founders Markus and Palmer handed over the evolution reins to the larger customs in 2014 and not much has happened since then.
Only 19 GitHub users are watching the code repository for changes to Dogecoin’southward central functions. By contrast, Bitcoin’s GitHub portal is tracked by 3,900 users and Ethereum’s comparable page has 2,200 eyes on information technology. The larger cryptos are constantly working on issues fixes and future features, generating a steady stream of code changes. Dogecoin hasn’t seen an update since early on Baronial.
That’s non much action behind a whole lot of noise. Dogecoin runs the risk of being left backside past more active developer communities.
2. Dogecoin comes with never-ending inflation and no cap on the lifetime supply
Bitcoin has a firm lifetime limit of 21 million coins. The Bitcoin supply will never motion beyond this limit, giving the largest crypto a stable and predictable supply-side figure in the long-term dynamics of supply and demand. Ethereum stopped mining new tokens subsequently “The Merge” in September. This cryptocurrency’south supply has hovered about 120.5 one thousand thousand tokens ever since.
Dogecoin has no such limits. Instead, it adds five billion new tokens per year, with no limit to the lifetime supply. Palmer and Markus wanted to create a free-flowing currency, not a digital nugget to be hoarded as an investment. In other words, Dogecoin was intentionally designed to be a poor investment in the long run.
3. This is even so a meme coin, often moved by social media posts and offhand remarks from famous people
For example, Musk’s Dogecoin tweets tin send this money halfway to the moon — and straight back down again. There are upsides and downsides to this unique quality. On the whole, Dogecoin’s massive volatility at the drop of a tweet makes it harder to take the token seriously.
Dogecoin: Such bawl, where wow?
Today, Dogecoin remains a pop and valuable cryptocurrency, beloved by meme lovers and risk-amenable investors akin. Its history may be brusque and cute, simply information technology has been a wild ride.
The ultimate meme token is down in the dumps, and there’s no telling where information technology will go from hither. It could rise to bodily real-earth prominence if the developer community rolls upward its sleeves and more retailers start accepting it in lieu of cash. Or, Dogecoin’s backers might decide that a joke is a joke. If they stay committed to Dogecoin’s lighthearted paradigm without attempting to overcome its challenges, the merely style is down in the long run.
Please exist careful with this one.
It’s a coin flip at this juncture. I like Dogecoin’s fast processing and depression fees, merely even then, other cryptocurrencies arguably practice it better. Grabbing a handful of Dogecoin tokens makes sense, just in case the rocket ship takes off again, merely it’s still difficult to telephone call Dogecoin a serious investment.
American Limited is an advertizing partner of The Ascent, a Motley Fool company. Anders Bylund has positions in Bitcoin, Ethereum, Newegg Commerce, and Tesla. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Tesla, and Visa. The Motley Fool has a disclosure policy.