What Is Dogecoin (DOGE)?

Dogecoin (DOGE) is an open-source, peer-to-peer digital currency. It was developed as a gamified alternative to traditional cryptocurrencies. It was considered a meme coin for most of its existence. The coin’s name and logo are designed on a meme. However, that changed in 2021 when Dogecoin became one of the ten most significant digital currencies by market capitalization.

Dogecoin offers its users a secure, decentralized application free from third-party interference. The total value of Dogecoin exceeds around $50 billion, although the coins are worth only a few cents. This is possible because billions of Dogecoin circulate on the market, and thousands of them are mined every minute.

Who Created Dogecoin (DOGE)?

Dogecoin was developed in the year 2013 by two IT engineers, Billy Marcus and Jackson Palmer, as a joke. They were friends on Reddit who’d never met in the real world. The two engineers combined two popular concepts – a meme showing a Shiba Inu and an incorrectly spelled version of the word “dog.”

Although the meme was intended as a joke for popular digital currencies like Bitcoin, it caught on almost immediately. The site had over a million visitors during its first month after launch. It was prevalent in the community, where people just wanted to have fun and play freely with cryptocurrencies.

Later, Reddit, a leading internet forum, partnered with Dogecoin and started rewarding its content creators with the DOGE token. But it wasn’t until 2020 that Dogecoin reached its peak. The founder of SpaceX, Elon Musk, started frequently tweeting about the Memecoin, which made him a prominent follower of the token. This led to a quick gain in the price of Dogecoin.

How Does Dogecoin (DOGE) Work?

Dogecoin is a digital currency which is developed to run on blockchain technology. Although it was started as a joke, Dogecoin is a full-blown digital currency with its own mining system and blockchain platform. While Jackson Palmer came up with the idea for this meme coin, Billy Marcus developed the technology behind it.

Billy based the technology of Dogecoin on the concept of Luckycoin. And Luckycoin is, in turn, based on the technology of Litecoin. Initially, Dogecoin used a randomized reward concept for block mining. However, in March 2014, it was switched to a static reward.

Similar to Bitcoin and Ethereum, Dogecoin also uses the proof of work concept. Here, miners use their hardware to solve algorithms and complex mathematical equations. The miners process the transactions and record them on the blockchain by solving these equations. When a transaction gets recorded on the blockchain network, the miners are rewarded with Dogecoin tokens.

Because the miners can solve the mathematical algorithms relatively easily and quickly, the Dogecoin network is more efficient at processing payments. Thanks to this lightweight architecture, the coin can process blocks within a minute, unlike Bitcoin, which takes about 10 minutes.

Is Dogecoin (DOGE) a Good Investment?

Dogecoin is a fun concept but not a good investment. Two engineers from IT started the coin as a joke, not from a use case perspective. In fact, they never developed the coin to solve any relevant problems. The coin adds no value to the blockchain system.

The DOGE token provides no intrinsic value. Even the community supporting the coin likes that it mocks itself. Most of these supporters hold the coin only for its entertainment value. Dogecoin isn’t a good base investment because its popularity largely determines its value.

While the DOGE token can yield exciting short-term profits, it shouldn’t be your first choice for a long-term investment. You can buy a few tokens when the excitement builds around the coin and actively trade it to book your profit.