In the weird and wonderful world of cryptocurrencies, there are arguably few that are quite as weird and wonderful as Dogecoin. In the period of a few short years, Dogecoin has gone from being a living, breathing meme to a highly traded digital asset worth millions of dollars.
One of the most interesting things about Dogecoin, however, is that many of those watching the crypto scene still don’t quite know what to make of it. For some, it is little more than a “meme coin” that was never seriously intended to be used as a viable financial instrument, while for others, it is a completely serious endeavor, set up to compete with the likes of Bitcoin and Ethereum.
Although Dogecoin has gone through periods in which it was seemingly constantly in the news – most notably when Elon Musk, the much-maligned Tesla CEO started tweeting about it – it seems to have disappeared from the mainstream news cycle in recent months.
It’s inevitable pic.twitter.com/eBKnQm6QyF
— Elon Musk (@elonmusk) July 18, 2020
But has Dogecoin actually disappeared from the face of the earth or has it simply lost some of its prominence, as new and perhaps more interesting cryptocurrency projects emerge – particularly as the surging price of Luna makes it a more interesting investment proposition!
For the full story of what happened to Dogecoin and where it might be headed in the future, keep reading.
Dogecoin: background, history and key moments
Dogecoin was created by Palmer and Markus in 2013. Although the inspiration for the project is not fully known, Palmer claims that the idea for it arose when he had a picture of the Shiba Inu “doge” meme open on his computer, along with a list of new cryptocurrency projects.
The combination of these two images gave Palmer the inspiration to coin the term “Dogecoin”, which he posted to his Twitter account with a message that Dogecoin would be the next big thing in the crypto industry.
Shortly after this, the Dogecoin project went live and immediately became an underground hit with the crypto community. After a mere two weeks, the Dogecoin community on Reddit had already grown to just shy of 20,000 members and the price of Dogecoin had risen by about 300%.
From this point on, the Dogecoin community continued to grow. However, although Dogecoin was being associated with many positive projects, such as donating hundreds of thousands of dollars to charity, the founders had also stepped away from the project due to what they identified as a pervasive toxicity within the community.
It was at this point in 2015 that the Dogecoin project was left in the hands of its community members.
Other notable milestones saw Dogecoin hitting a $1bn total market capitalization in January 2018. And while this was an incredible achievement, it would go on to reach greater heights yet!
Two important forces in the skyrocketing price of Dogecoin were the efforts of the WallStreetBets reddit community, along with Elon Musk. Musk’s support of the project – expressed through meme sharing on Twitter – helped the price of Dogecoin to skyrocket.
However, while Musk’s vocal support of Dogecoin did help it to increase its value, it has also led to accusations that he is merely “pumping” prices for his own benefit. This has hit a nerve within the crypto community, given the prevalence of dubious pump and dump schemes.
Dogecoin: risk or opportunity?
In addition to the pervasive meme culture surrounding the project and the presence of price pumpers, there are also a number of other issues that have spooked investors from supporting Dogecoin in recent months.
Perhaps most notably, the fact that Dogecoin – unlike Bitcoin and many other popular cryptos – has an unlimited supply has got investors worried. This means that prices aren’t controlled by scarcity and thus relies on buyers constantly buying and reselling existing Dogecoin that has been mined or is in the process of being mined. Dogecoin also has a relatively high issuance rate, which potentially devalues the currency.
Another issue that has plagued the Dogecoin project – and one that Musk himself has tried to ameliorate – is the relatively slow speed of development. Compared to other cryptos, Dogecoin has received few substantive updates. This is exacerbated by the fact that the development team is comprised of volunteers.
Another major problem – and one which arguably afflicts most cryptos to some extent – is that Dogecoin suffers from intensely concentrated ownership. There are apparently around nine wallets that hold roughly 40% of all Dogecoin. This creates a risk of the currency becoming massively devalued if one of these wallet owners decides to cash out their holdings. This situation also creates a risk of market manipulation.
Nine years of Dogecoin: what’s the latest?
With all of this in mind, however, what is the latest Dogecoin news? Will it be around in a year or will it lose out to one of the newer cryptos on the scene?
For the time being, at least, it looks very much like Dogecoin is here to stay.
This is despite the fact that Dogecoin has suffered some of the largest drops in its valuation among all of the other major cryptos out there. And although it still manages to capture a sizable portion of the crypto market, no one really knows how long this will last!
One rumor that has been circulating since Elon Musk assumed ownership of Twitter, the popular social networking and news platform, is that he intends to commit to integrating Dogecoin payments.
Musk has been planning an overhaul of the Twitter platform, which includes introducing a number of new paid features. And word on the grapevine is that Musk will allow Dogecoin to be used to pay for some of these features.
For the time being, however, and despite all its issues, the Dogecoin project still looks remarkably resilient!