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Dogecoin Review: The Memecoin Sensation
Dogecoin Pros & Cons
Same network security as Bitcoin
Easy to mine
No development team or roadmap
All-Time High: $0.4377 (April 16, 2021)
All-Time Low: $0.00008547 (May 7, 2015)
Current Market Cap: $35,472,042,487
Max Supply: No max supply
Circulating Supply: 129,348,760,640 DOGE
Reason: Blocks process every minute meaning transactions can be processed every minute, which is 10x faster than Bitcoin but extremely slow compared to newer blockchain project network speeds.
Reason: Dogecoin is one of the most heavily centralized cryptocurrencies in terms of distribution. There is one address that holds over a quarter of the total circulating supply (almost $9 billion at current price), and overall, 11 portfolios hold almost half of total supply of Dogecoin. This means price manipulation is easy, and that a whale could crash prices with a dump very easily.
Reason: There is zero development on Dogecoin, the last minor release of Dogecoin was over 2 years ago, there has been some recent activity to correct some issues but overall, there is zero actual development of Dogecoin as a blockchain technology.
Reason: Being one of the oldest cryptocurrencies makes Dogecoin available on almost all major exchanges, and the recent price explosion has pushed it into the top 10 by market cap, with daily volumes in the billions.
History of Dogecoin
Dogecoin was started in 2013 by Jackson Palmer, an Adobe software engineer, and Billy Markus, an IBM software engineer. It was meant to be a joke, and only took about 3 hours to change the Bitcoin code to create Dogecoin according to Markus.
The Dogecoin network launched in December 2013 and the asset reached an all time high of a little over a cent during the 2017 crypto bubble. Markus and Palmer stepped away from Dogecoin in 2015. It is mostly run by community members now.
Advantages of Dogecoin
Dogecoin maintains all the security of a blockchain because it is a copy of Bitcoin’s code with just a few changes to things like mining output, block time and supply.
Other than that, the only advantage that Dogecoin has is that it has a strong community which has helped propel its price despite it having no clear use case apart from a currency. One such proponent of Dogecoin is Elon Musk who has repeatedly pumped the coin on Twitter. It remains to be seen how committed Musk is to Dogecoin or whether he’s just having a laugh.
Disadvantages of Dogecoin
The main disadvantages of Dogecoin are tied to its supply and its utility. There is an infinite supply of Dogecoin, it is mined at a rate of ten thousand new DOGE every minute, meaning over five billion DOGE will be produced each year.
This in theory should make it less valuable over time. The other issue surrounds utility in that Dogecoin has no real use other than a potential store of value with an endless supply, which again, in theory, should make it not worth too much as time goes on.
Dogecoin Frequently Asked Questions
Dogecoin may one day reach $1, but this review is not meant as investment advice, rationally there is no reason Dogecoin should ever reach a $1. That does not mean whales, reddit users and others will not cause it to reach $1. That being said, CryptoVantage does not provide financial advice.
Dogecoin is an extremely risky investment. While all investments, especially cryptocurrencies, involve risk, Dogecoin has a variety of factors that make it riskier than a lot of other digital assets that it has a similar market cap to. This is because of the large whales that hold Dogecoin, its lack of actual technological development, and its infinite supply.
There is an infinite number of Dogecoins left. The supply is not finite like it is for Bitcoin. Ten thousand Dogecoins enter the market every minute.
Yes, you can still mine Dogecoin, and because Dogecoin has an infinite supply you can mine Dogecoin until the world ends. Mining Dogecoin uses Scrypt rather than Proof of Work like Bitcoin does.
It takes 1 minute to mine 1 block of Dogecoin, with a block reward of 10k DOGE per block, meaning every minute there is another 10k DOGE available, and about 5.2 billion new Dogecoins are created each year. In comparison, only 900 Bitcoin are mined in a day, versus 14.4 million Dogecoin being mined in a day.
No, Dogecoin cannot be like Bitcoin. The main reason for this is the infinite supply of Dogecoin, and the difference in the current supply of each. While there will only ever be 21 million BTC, there will one day be trillions of Dogecoin, and then more after that, meaning over time it should get less and less valuable because it is being created endlessly, meaning demand can never outweigh supply. Scarcity is one of the biggest reasons Bitcoin is so valuable.