What is Dogecoin? The reason of rise of this cryptocurrency to become an alternative to Bitcoin
Dogecoin: Why in News?
Dogecoin has been in news of late after there were multiple cryptic tweets by Tesla and SpaceX CEO Elon Musk in the past few weeks. This indicated his support to the most trending altcoin.
What is Dogecoin?
- Dogecoin is a cryptocurrency that was started in 2013 as an internet parody. Bitcoin and Ethereum have surged in value in the previous week.
- The Dogecoin is based on the Doge meme and was started as a fun alternative to Bitcoin.
- Its value has risen phenomenally this week too.
- It's value has reached 48 million dollars this week
- The digital currency was created in the year 2013 by Billy Markus and Jackson Palmer who were software engineers. They said that dogecoins were faster and a fun alternative to Bitcoin.
- The meme that it takes its inspiration from is the Shiba Inu meme that went viral years ago.
- Unlike Bitcoins the maximum possible number is not fixed. Bitcoin has been fixed at 21 million dollars.
- Dogecoin numbers do not have any upper limit and these are 100 billion in existence now
- When the crypto coin first started, an online community that was backing it, invited attention by supporting unconventional causes like sponsoring Jamaica's bobsled team at the winter Olympics 2014.
How did Dogecoin rise?
- The major reason behind the rise of Dogecoin is the same that has propelled Bitcoin and Ethereum. One can mine Dogecoin on Windows, Mac, or Linux.
- Crypto investors in India can set up their accounts on any of the Dogecoin-supporting crypto exchanges such as WazirX, BuyUcoin, etc.
- Coinbase's market cap briefly hit $100 billion after it went public on 14th April, 2021. Dogecoin is a part of the frenzy.
- The reason behind its current success is also said to be Satoshi StreetBets. Here members built up an enthusiasm for the cryptocurrency so as to lead to the rise of GameStop earlier this year. The group's name is Satoshi Nakamoto.
What are the concerns?
Various investors have fears that Dogecoin's rise would lead to a bubble, provided that no meaningful value is visible to the buyers in the digital token and they are just trading to make money as the price keeps on increasing.
Cryptocurrencies are considered volatile as they may crash due to lack of intrinsic value like land, gold etc.
This makes them susceptible to sudden scares and manipulation by small groups who hold large numbers of virtual currencies.