What is Dogecoin? What to know about the bitcoin rival
Bitcoin may be the most famous (and valuable) cryptocurrency but there’s an old dog in town performing new tricks that sent investors scrambling to buy another type of cryptocurrency last week. I’m talking about Dogecoin, which has increased in value a staggering 6,000% since the beginning of the year, and doubled in value last Friday alone. Here’s what you need to know about Dogecoin:
- What is Dogecoin? It’s a cryptocurrency like bitcoin. It was invented in 2013 by a pair of software engineers who worked for IBM and Adobe. It trades under the cryptocurrency ticker DOGE.
- “Dogecoin” is a weird name, isn’t it? Yep. Its name was taken from the “Doge” meme. The meme is a photo of a Shiba Inu dog with multicolored text in broken English. The text represents the dog’s inner monologue.
- What does a Dogecoin look like? Like any cryptocurrency, its true form is just a string of digital characters on the blockchain. But a Dogecoin is often visualized as a gold coin with the dog from the Doge meme on it.
- How is Dogecoin different than bitcoin? Besides its valuation difference, the main difference between the two cryptocurrencies is that bitcoin has a finite amount of coins on the blockchain while Dogecoin will mine new coins each year.
- How many Dogecoin exist? Right now there are roughly 129 billion Dogecoins and just over 5 billion new Dogecoin will be created each year.
- What is Dogecoin worth? As of the time of this writing, one Dogecoin is worth about $0.40 (that price could change rapidly by the time you read this, however). That gives Dogecoin a current market cap of just over $52 billion. That’s compared to bitcoin’s price of over $56,000 per coin (as of the time of this writing) and $1 trillion market cap.
- Why is Dogecoin surging this year? That’s hard to answer. But generally, cryptocurrencies are becoming more popular with the “everyday” investor, and that rising tide is lifting all the boats. Cryptocurrencies also had a banner week last week with the public offering of Coinbase. Many saw the event as a sign that cryptocurrencies had reached legitimacy in the eyes of the public.
- But why did Dogecoin double in value on Friday? That’s down to Elon Musk’s latest antics. He tweeted about the currency and so people rushed to buy it.
- Should I buy Dogecoin? That’s up to you and your risk threshold. Dogecoin may be surging, but any cryptocurrency is extremely volatile. Dogecoin’s price doubled on Friday, but it could as easily lose as much in value today or tomorrow. Or it could go to the moon.
Doge Barking at the Moon pic.twitter.com/QFB81D7zOL
— Elon Musk (@elonmusk) April 15, 2021