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The Spike of DOGECOIN| Let’s talk about it

dogecoin

It is hard to imagine that the asset class of cryptocurrency has only existed for a little over a decade. Tokens striving to become technology’s answer to money have taken an unstable path.

The first significant leap forward occurred in 2014, when the Mount Gox Bitcoin Exchange in Shibuya, Tokyo, Japan went bankrupt. At the time of its bankruptcy, Mount Gox managed more than 70% of all Bitcoin transactions and was the world’s leading cryptocurrency trading platform. Hackers destroyed it. Bitcoin had peaked at nearly $1,000 per token before the Mount Gox debacle and fell below $225 in 2015.

After this fall, Bitcoin and other digital currencies made a strong comeback. When WEC and CBOE launched futures contracts in late 2017, Bitcoin rose to over $20,000 per token before collapsing to a low of $3,120 in late 2018. At its peak, the market capitalization of the asset class reached more than $800 billion.

In March 2020, when the global pandemic triggered a market plunge, the price of Bitcoin dropped to $4,210. By the end of last year, it had reached a new high, closing at $29,220. By February, the price had risen to nearly $50,000 and the market capitalization surpassed the $1.4 trillion level for the first time.

Bitcoin’s volatility and soaring price may have made headlines, but it also masks the fact that there are more than 8,400 other digital tokens on the market. Dogecoin is one of these tokens and has been in existence since late 2013.


What is Dogecoin?

Dogecoin started as a joke in 2013. Two engineers, Billy Markus from IBM (NYSE: IBM) and Jackson Palmer from Adobe, combined Bitcoin and Doge to create Dogecoin. More than one million unique visitors visited Dogecoin.com in its first month of operation. The same doge features a picture of a Shiba Inu dog with thought bubbles.

Dogecoin is derived from the free software project Litecoin. In the meantime, Dogecoin does not limit the number of pieces the system can produce, which differentiates it from Bitcoin.

Dogecoin exploded almost instantly thanks to Reddit, reaching a capitalization of $8 million in 2013. It has become a tipping token to thank or reward people on the web who have done “good deeds” such as sharing an idea or making a platform more accessible.

Dogecoin’s popularity has grown due to a lower barrier to entry than Bitcoin.

Dogecoin is a cryptocurrency that has a long history, as this asset class is just over ten years old.

I should’ve invested in it.

When Dogecoin appeared on the scene, a friend suggested I start mining. He bought a lot of computer equipment and invested substantial monthly electricity bills in continuing to collect Dogecoin and Bitcoin. I thought he was crazy.

To me, crypto tokens were nothing more than a video game with worthless rewards other than in the opaque cyberworld. I immediately rejected the suggestion, thinking to leave video games to the kids. I was completely wrong.

Personnally I thought it was crazy to collect worthless tokens in 2013 when the world of cryptography was still very old and Bitcoins sold for just over $1,000 per token. I couldn’t get used to the idea of price and value. My mistake was not taking the time to understand the block, the underlying philosophy, and to embrace technological change.

In 2013 and 2014, the Dogecoin reached a peak of $0.001806. This means that at the top of the token, $1,000 would buy 553,700 Dogecoins.

As of February 10, 2021, Dogecoin has reached $0.070435, making this $1,000 investment worth almost $39,000. A $1,000 bitcoin at that time is now worth more than $46,000.

Meanwhile, just as my interest was beginning to awaken, the hacking of Mt. Gox and the bankruptcy in 2014 put the problem to rest for me.

Elon Musk makes the Dogecoin take off

His three companies, Tesla Inc (NASDAQ: TSLA), SpaceX, and The Boring Company, could make him the first trillionaire of the future.

He sees the irony in Dogecoin because it was created as a MEME. It would be the most “entertaining and ironic” he said result if the Doge became the currency of the earth in the future. He also said, “Fate loves irony”.

Mr. Musk fed the Dogecoin increase with periodic tweets. As he has 25 million followers on Twitter (NYSE: TWTR), every time a tweet appears, Dogecoin explodes.

8400 cryptocurrency on the market

According to CoinMarketCap, as of February 10, 8,418 crypto-currencies were circulating in the asset class, with a total value of more than $1.13 trillion.

Bitcoin continues to hold the dominant market share with a market capitalization of approximately $700 billion, or nearly 62% of the asset class. Ethereum ranks second with nearly $190 billion, or 16.8%.

Out of nearly 8,400 tokens, Dogecoin, Elon Musk’s favorite joke, ranked in the top 20, in tenth place as of February 11, with a market capitalization of $9.51 billion.

This ironic token is at the top of the list of cryptocurrencies, occupying more than 0.40% of the total market capitalization.


Investing or trading, which is more likely to succeed?

The inventor and CEO, whose net worth is close to $200 billion, probably thinks it is even more ironic that each of his tweets is driving up the price of cryptography. I

This week, Elon told the world that Tesla has purchased $1.5 billion worth of Bitcoin and will accept cryptography as payment for its EVs. The latest step that brought Bitcoin to more than $47,750 was related to Musk. It may not be long before an encryption scheme created by Musk burst onto the scene.

I’ve come to accept the digital currency revolution. I continue to wonder whether cryptos are investments or trading vehicles. For many, it’s both.

I look forward to the introduction of options contracts on major currencies. Put and call options on Bitcoin and Ethereum products and ETFs and ETNs will only increase the volume and acceptance of this asset class, which will lead to the growth of many more chips.

Gary Gensler, former President of the CFTC under the Obama Administration and new SEC Chairman under the Biden Administration, taught a fintech course at MIT during the Trump Administration. Mr. Gensler will work with the CFTC Chairman on the regulation of the digital currency asset class. He is open-minded and understands the utility of this growing asset class. He will need to be very careful about the objections of government officials in the United States and around the world to the control of the money supply. Some areas of regulation require compromise.

In the meantime, it is likely to support the creation of ETFs that would promote the acceptance of cryptocurrency. As the market capitalization of this asset class continues to grow, Dogecoin may no longer be a joke in the years to come, but Elon Musk will continue to savor his irony and is already increasing his net worth with his latest $1.5 billion investment in Bitcoin.

How to get Dogecoin?

Are you planning to invest in Dogecoin? There are two ways to obtain Dogecoin: buying from an online broker and mining.

  1. Buying Dogecoin with fiat money
  2. Dogecoin mining

Dogecoin is a cryptocurrency that can be mined. As with Bitcoin, you can mine Dogecoin and receive coins as a reward. Mining consists of validating a block of transactions by finding a mathematical solution. The mining algorithm used on Dogecoin is different from that of Bitcoin.

The algorithm is called Scrypt and is different from the SHA-256 used on the Bitcoin blockchain. For your information, this is the same algorithm as the one used on Litecoin.

Compared to Bitcoin, Dogecoin mining is faster and easier. It is estimated that one block is validated every minute. As with Bitcoin, Dogecoin mining induces competition between miners. However, since the validation time is shorter, the computing power required is less than with Bitcoin.

The reward in tokens is greater than with Bitcoin. Indeed, a miner earns 10,000 DOGE for each validated block. Of course, since the DOGE rate is much lower than in Bitcoin, the value of the reward is not as great. However, being more accessible, mining is a good solution to obtain Dogecoin.

With the recent explosion in the price of Dogecoin, mining is more profitable than ever. Thus, since the beginning of February 2021, the revenue related to mining activities per day and per Gigahash/s has surpassed the $2.00 mark. Following recent tweets from Elon Musk, this revenue has even increased to $3.28 on February 7, 2021.


Dogecoin mining: 2 solutions

To mine Dogecoin, you have two solutions. The first one is to mine alone. For this, you will have to equip yourself with ASICs and make your profitability calculations taking into account the cost of your electricity. Another solution is to join a mining team or “mining pool”. This solution has the advantage of minimizing your investment. When the team validates a block, you earn a reward in proportion to the computing power you have shared.

Since 2014, Dogecoin and Litecoin mining have been combined. In other words, a pool mining linked to the Dogecoin also carries out mining on Litecoin.

The miners of Dogecoin

Mining is an important activity for a cryptocurrency such as Bitcoin, Litecoin, or Dogecoin. Why is it important? Mining is used to validate user transaction blocks. In other words, without mining, Dogecoin cannot work since the transactions could not be carried out.
For the sustainability of the Dogecoin, it is therefore important that there is no shortage of minors. However, over time and with the increase of the Dogecoin course, the reward for minors may be decreased. Nevertheless, the Dogecoin network will have to be vigilant to ensure a sufficiently high return on investment for minors for this activity remains attractive.

But mining is also the activity that creates corners. As explained above, miners receive a certain number of corners for their work. These corners received correspond to newly created DOGEs that will subsequently be put into circulation. Mining, therefore, increases the supply of Dogecoin.

The notoriety of the Dogecoin

The greater the demand for Dogecoin, the more its price increases. This is why Dogecoin must be becoming more and more popular. It is important to know that the field of cryptocurrency is ultra-competitive. One could compare it to the Internet in the 2000s. When the Internet exploded, many operators and search engines remained on the sidelines.

Cryptocurrency is undergoing unprecedented development. With several thousands of cryptos on the market and hundreds being created every year, many cryptos are doomed to disappear before they even know their hour of glory. Of course, Dogecoin is not completely unknown crypto. It is the 10th most capitalized crypto in the world, which puts it ahead of Bitcoin Cash. That’s all there is to it!

However, Dogecoin has to face heavyweights like Bitcoin or Ethereum that capture a large part of the media attention. This is why Dogecoin must continue to make itself known to investors. Growing awareness will have a positive effect on its share price. The year 2021 has shown that all it takes is a tweet from Elon Musk praising Dogecoin to make its share price soar like never before!

Legal and fiscal regulations

For several years now, governments have been thinking about setting up regulations on cryptosystems. With the explosion of cryptos since 2020, this issue is more than ever on the table. The arrival of regulations or regulations is seen as a threat by many.

First of all, the basic principle of most cryptos is linked to decentralization. With regulation in place, cryptos would lose some of their decentralized and independent sides. But above all, there is a risk that these regulations are coercive. However, between regulation and prohibition, there is only one step that some governments allow themselves to take. In this case, the regulations would deal a serious blow to cryptos, and this would devalue their course.

However, not all regulation is bad. The field of cryptos still suffers today from a certain lack of transparency and accessibility. As a result, many potentially interested investors are still reluctant to take the plunge. The arrival of a regulatory framework would reassure these investors. By increasing the level of security, more people could turn to cryptos. With increasing demand, the price of cryptos and therefore of Dogecoin would rise.

Conclusion

From now on, when you hear about Dogecoin, you will know what it is all about! Like Bitcoin, Dogecoin is a cryptocurrency. It allows peer-to-peer transactions to be carried out instantly, securely, and inexpensively.

Dogecoin has the advantage of having among its fervent supporters’ people known and recognized for their business acumen, starting with Elon Musk. Dogecoin is currently going through a historical period with a boom in its course. For many, this is only the beginning of a long and beautiful history.

Written by Ottay

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