Dogecoin is a cryptocurrency inspired by a popular meme called Doge (a picture of a Shiba Inu dog accompanied by funny phrases that convey its internal monologue). Dogecoin appeared in 2013, four years after Bitcoin’s creation. At that time, everybody was at the stage of figuring out what the cryptocurrency market was all about. However, Dogecoin had the purpose of bringing more personalization and accessibility to the cryptocurrency world.
Let’s look at characteristics that make Dogecoin interesting and keep it afloat.
Dogecoin Surpasses Bitcoin in Rapid Growth
First, let’s establish a connection between Dogecoin and Bitcoin.
Both DOGE and Bitcoin share the same consensus mechanism – PoW (Proof-of-Work) – however, it’s built on different encryption technologies.
Other than that, Dogecoin and Bitcoin are not that similar. In fact, they occupy different price segments: Bitcoin is now worth more than $26,000, while Dogecoin is less than $1.
Dogecoin is a less serious and more accessible entry point into the digital money community, which is not always friendly to newcomers.
A powerful asset of the Dogecoin universe is its strong community of fans, who often use the coin to tip content creators. Given the potentially unlimited number of DOGEs in circulation, this token does not look very promising in terms of investing money in it, but it’s still a cryptocurrency that has its value and can be stored or exchanged.
Dogecoin is currently showing a lower volatility than Bitcoin’s. The price stability has, although insignificantly, but still shifted. Chronologically, Dogecoin was associated with higher volatility than Bitcoin.
Transaction rate is another area where Bitcoin is inferior to DOGE. The average time of processing a Bitcoin transaction is 10 minutes, while Dogecoin’s is one minute.
Ultimately, there are some visible advantages of DOGE that could’ve influenced its rising popularity, including its easy application regarding smaller transactions and easier mining algorithms.
Prominent Industry Figures Rally Behind Dogecoin
And again, the Dogecoin community is probably one of its most powerful assets.
Elon Musk has been one of the most prominent Dogecoin supporters. He even made DOGE a payment option in the Tesla merchandise store.
Elon Musk ignited waves of interest in DOGE in August 2023, saying that X is a “dog & Doge friendly place!” hinting that the platform might have plans to integrate payment methods, including cryptocurrency options. As a result, the stock price of Dogecoin increased in the next 24 hours.
Musk sparked public interest in Dogecoin back in 2021 when he revealed that he’s been investing some money in the cryptocurrency; the scope of investment remains unknown. In 2022, the Dogecoin enthusiasts filed a $258 billion lawsuit against Musk, claiming that he had manipulated the price of a cryptocurrency by first promoting it through social media and then allowing it to crash, allegedly playing a trick on investors who experienced significant almost tenfold money losses.
In April 2023, Musk changed a traditional bird logo to a Shiba Inu picture associated with Dogecoin. Back then, DOGE experienced a 20% rise in its value.
Experts say that DOGE could see an increase in value due to an assumption that it will be integrated into the X platform (formerly Twitter) run by Elon Musk as a payment option.
Embracing Inflation as a Strength for Dogecoin
Dogecoin started out with 100 billion coins. Later, the cryptocurrency creators stated that there won’t be a limit, the so-called cap, to DOGE. Therefore, Dogecoin can experience infinite inflation. To compare, Bitcoin’s cap is 21 million coins.
Since cryptocurrency networks are supported by mining mechanisms that maintain and process transactions for rewards, if the amount of coins is close to the cap, the rewards for mining are also reduced. Potentially, when the cap is reached, there will be no more rewards for mining, and the network will be managing itself. Thus, node managers will be compensated through money from transaction fees.
When it comes to Dogecoin, the value can be increased because there’s no limit to the number of coins. Therefore, there will always be rewards for the mining sector. This makes the whole cryptocurrency network more stable. In the case of Bitcoin, miners may abandon the network at some point.
Since there’s so much Dogecoin out there, the value is increasing. This means people are less likely to save money or are likely to potentially obtain more digital assets, which would eventually keep the cryptocurrency network alive.
Dogecoin Ascends to the Ranks of Leading Cryptocurrencies
Right after the memecoin sector implemented a token standard, DRC-20, Dogecoin experienced rapid growth in transactions, setting a new record in the cryptocurrency world of more than 2,000,000 transactions in a day. For reference, Bitcoin has reached up to more than 500,000 transactions daily, while Ethereum – one million a day. Thus, Dogecoin set a new all-time cryptocurrency record in capitalization.
There is no revolutionary technology behind Dogecoin, but at the same time, the capitalization of the project has reached a dozen billion dollars.
Dogecoin has joined the top ten cryptocurrency ranking by market capitalization and now occupies second place as the largest cryptocurrency utilizing the PoW protocol after Bitcoin.
Overall, the ranking of Dogecoin owes it to its community support and famous supporters like Elon Musk and traders and investors closely monitoring the DOGE position on the cryptocurrency market.