Dogecoin - The Phenomenon

Image : Bloomberg

What do rocket emojis, Shiba Inus, and Elon Musk all have in common?

They all helped launch the internet’s joke cryptocurrency to a coin with a market cap now more than FORD and TWITTER!!!

Now you all must be wondering “How did this happen?”. To answer that, we have to go back a few years. In 2013, it was started as a joke to poke fun at some of the wild speculation in cryptocurrencies by two software engineers Billy Markus and Jackson Palmer.

A Doge meme

Dogecoin was a product that people started using as soon as it was released, much to the two engineers’ surprise. Over a million unique visits within the website’s first month. The currency was derived from the open source software project, Litecoin. Unlike Bitcoin, Dogecoin does not have a limit to the number of coins that can be produced in the system.

The digital currency instantly exploded on Reddit, generating a market value of $8 million at the time. It became popular for the internet practice of “tipping,” which was a way of repaying people on the web for performing “good deeds,” like sharing an idea or making a platform more accessible.Only about a week after launching, Dogecoin became the second-most-tipped currency.

At the time, the engineers said they had no plans to compete with cryptocurrency giant Bitcoin, but in 2014 the trading volume of the meme-worthy coin briefly eclipsed Bitcoin and all other digital currencies.

Despite its strong presence on Reddit, not too many people were taking Dogecoin seriously and its use case remained limited. Doge has also been used to donate money to charities. These have included the 2014 Jamaican Bobsled team who couldn’t afford to get to the Sochi Winter Olympics, a Nascar driver named Josh Wise, and a clean water project in Kenya called Doge4Water.

The peak price of Dogecoin in 2018 was around two cents, right before it crashed along with the rest of cryptocurrency. Reports suggest that by early 2019, Dogecoin had lost nearly 90 per cent of its value and was trading for a fraction of a penny, until now.

Tesla chief Elon Musk has been enthusiastically backing Dogecoin in a series of tweets that he posted over the last year. His tweets have not only made people aware of the cryptocurrency around the world but have also encouraged investors to buy more Dogecoins.

In fact, Musk has expressed his wish to make Dogecoin the “currency of the internet.” He has said that the ‘crypto whales’ who hoard large stockpiles of Dogecoin are standing in the way of it from becoming a mainstream currency while adding that he will buy out major Dogecoin holders.

Every time he tweets on Dogecoin its value surges. The Internet loves to call this “The Musk Effect”.

In his latest tweet on the cryptocurrency, Musk teased his followers about the possibility of Dogecoin featuring in his ‘Saturday Night Live’ hosting debut. The value of Dogecoin surged by a huge amount after Musk called himself the “Dogefather” in the tweet.

Here are some of Elon’s Tweets:

Some forecasters believe Dogecoin could hit upwards of $1 by the middle of the decade which would mark a truly meteoric rise for the cryptocurrency. Even amid the record rally, experts caution investors from jumping into dogecoin just to make money. Cryptocurrencies are highly volatile, meaning that the current streak could reverse at any point.

“ Never invest anything you aren’t willing to lose. If you like Dogecoin and think it could be a viable currency in the future, or are fans of the idea and the movement, go ahead and invest in it. If you don’t like it or think it’s a fad, don’t invest in it.” said Ben Weiss, co-founder and CEO of CoinFlip, one of the largest bitcoin ATM companies in the U.S.

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