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What Is Dogecoin?

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What Is Dogecoin?

Dogecoin is a cryptocurrency. This means that it is a decentralized, entirely digital currency, similar to Bitcoin, Ethereum, or Litecoin.

Still, unlike traditional cryptos, it somehow went from starting out as a practical joke to becoming one of the most ironically profitable investments of the 21st century.

How on earth did that happen? Well, let’s find out.

What Is Dogecoin?

Dogecoin is a cryptocurrency. This means that it is a decentralized, entirely digital currency, similar to Bitcoin, Ethereum, or Litecoin.

Still, unlike traditional cryptos, it somehow went from starting out as a practical joke to becoming one of the most ironically profitable investments of the 21st century.

How on earth did that happen? Well, let’s find out.

The World of Cryptocurrencies

Cryptocurrencies arose in response to a growing need for businesses to facilitate complex transactions quickly and securely, absent the bureaucracy of banks and other centralized governing authorities.

Cryptocurrencies are entirely digital and are secured and protected via blockchain technology, in which all digital data from transactions are stored in a block, assigned by a unique ID code.

called a Hash, combined with the Hash of a previous block, and so on and so forth, stretching back across a chain.

Any tampering of any block within that chain automatically invalidates all proceeding transactions.

Transactions within a blockchain are also validated or invalidated by collective algorithms, by which it can only be approved if unanimously recognized by all affiliated nodes within a blockchain.

making any successful tampering of a cryptocurrency entry for criminal purposes virtually impossible.

The Creation of Dogecoin

In the early days of cryptocurrencies, wild speculation and, at the time, apparent delusions of grandeur were common, as systems like Bitcoin styled themselves as the next stage in evolution in the history of economics.

As a parody of this, two software engineers, Billy Markus and Jackson Palmer, satirically launched Dogecoin calling it the ‘dog coin’, with a comedic marketing strategy that did not take itself very seriously and a logo with the face of a Shiba Inu, a popular dog breed in Japan at the time.

The irony, however, was that this extremely laid-back approach to the marketing of Dogecoin later endeared the currency to online traders by early 2021, who saw Dogecoin as a fun and friendly Internet currency.

that lacked the wanton megalomania of other, more avaricious systems.

Dogecoin also had an advantage in that its system was based on a Scrypt algorithm, which actually made the transaction process easier for the user than bitcoin, taking only one minute to confirm payments vs. Bitcoin’s ten.

Where Is Dogecoin Now?

The stratospheric rise in Dogecoin’s popularity made early investors in the currency very wealthy.

Dogecoin went from a value of $0.01 in January of 2021 to $0.65 by May, according to OKX at https://www.okx.com/markets/prices/dogecoin-doge.

It has since gradually declined in value, however. Its market cap, the current market price of the currency multiplied by its circulating supply, currently stands around $8.9 billion.

What Does This Show Us?

It shows us that playing with cryptocurrency is a little like playing with fire, as the originators of Dogecoin clearly had no idea what they were dealing with.

It also shows that investments are an exercise in high-risk, high reward ecommerce, based on the sheer unpredictability of the market and that even some practical jokes can inadvertently turn a casual ‘why not?’ investor into a millionaire.

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