Dogecoin: What is it and how much is it worth?
21 Feb 2022
Dogecoin (pronounced dohj-coin) is a cryptocurrency with a price that has skyrocketed and plummeted since its inception in 2017. With considerable interest in Dogecoin, it’s time to lift the lid on this cryptocurrency and explore what it is, how it works and what a Shiba Inu dog has to do with it.
What is Dogecoin?
Dogecoin started as a joke by two software developers, Jackson Palmer and Billy Markus, who, in 2013, wanted to make a ‘fun’ alternative to Bitcoin. The coin was inspired by a popular meme featuring a Shiba Inu dog, his baffled expression and internal monologue in broken English.
The coin is powered by Litecoin and is considered an inflationary coin, because unlike Bitcoin there is no finite number of coins that can be mined. Also, Dogecoin’s one-minute block intervals make it faster than many other blockchains. Originally, the use of the funny meme was designed to satirise the rise of altcoins, but in time the joke actually led to some practicality.
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What can you do with Dogecoin?
Dogecoin is actually very similar to Bitcoin, as it can be used to send value internationally to anyone. And in recent years, the coin’s network has increased and more vendors are accepting the unique token. In the US, for example, the coin can be used for online and in-store purchases via Bitpay, a cryptocurrency wallet. Tesla also accepts DOGE as a form of payment from some merchandise. However, Dogecoin is not popular in Australia and its uses are mostly limited to trading and sending it.
→ Related article: How to buy bitcoin in Australia
Elon Musk and Dogecoin
Dogecoin’s link to the popular meme has seen it gain a large following. The influence of Elon Musk, the CEO of Tesla and SpaceX, tends to send investors flocking to invest in the cryptocurrency. An example of this occurred in April of last year, when a price surge was linked to the billionaire entrepreneur, who dropped a cryptic tweet promoting his upcoming appearance on Saturday Night Live (SNL) on May 8 while referring to himself as the ‘dogefather’. Ahead of his appearance, Musk also tweeted, “Cryptocurrency is promising, but please invest with caution!”
#DOGE recently started rising again, after Tesla’s Elon Musk tweeted about his appearance on Saturday Night Live (SNL) on May 8. #Dogecoin https://t.co/pGOww6YlkQ
— Bitcoin News (@BTCTN) May 5, 2021
Some analysts suggested that investors were jumping on to the coin before the techno-king’s appearing on SNL, which they expected could send the coin’s price to spike even higher. However, during a skit on SNL Elon Musk referred to the coin as a “hustle” and the coin’s value fell by 35%. The day after his appearance on SNL, the tech billionaire announced his plans for SpaceX to accept dogecoin as payment and shared this tweet soon after:
SpaceX launching satellite Doge-1 to the moon next year
– Mission paid for in Doge
– 1st crypto in space
– 1st meme in spaceTo the mooooonnn!!https://t.co/xXfjGZVeUW
— Elon Musk (@elonmusk) May 9, 2021
Does Elon Musk invest in Dogecoin?
So, does Elon Musk even own Dogecoin? According to a tweet the billionaire shared in October 2021, he does own some Dogecoin as well as Bitcoin and Ether (Ethereum’s cryptocurrency). But it’s good to remember just because Elon Musk has invested in Dogecoin and other crypto assets that doesn’t mean that their price will grow or that it is right for you.
Can Dogecoin reach $1?
In May 2021, Dogecoin reached it’s all-time high of US$0.70, and their was some speculation that it would push through the $1 market. However, it has since taken a stumble, falling more than 80% in the last nine months. But the question remains, will 2022 be the year that Dogecoin finally reaches this milestone? Currently, it’s not looking good with cryptocurrency market on the whole having a very rocky start to the year. Neil Patel of the Motley Fool predicts that it will take real-world adoption for Dogecoin’s price to rise to $1, and more companies will need to start accepting it as a form of payment.
Is it worth buying Dogecoin?
It’s a good idea to treat cryptocurrency the same way you would any investment. Before you invest you should fully understand how it works and determine if it has any real-life practicality now or in the future. Cryptocurrencies can be very risky given how volatile they can be and while there is potential to make great gains, there is also the potential you will make great losses.
Cover image source: BBbirdZ (Shutterstock.com)
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This article was reviewed by our Content Producer Isabella Shoard before it was updated, as part of our fact-checking process.
