Does The Hype Really Exist? Is Hit going to $1?
Dogecoin Price Prediction – Despite Elon Musk’s reflections and tweets, the Dogecoin project is among the most popular. Can we expect to see 1 USD in the bubble?
How does the DOGE coin work?
How the hell did Elon Musk get up to tweeting about this infamous internet meme. Actually, it started out as a joke cryptocurrency. This is a truly fun cryptocurrency, one of the top ten in terms of market capitalization.
Marcus and Palmer did their engineering careers at IBM and Adobe, respectively, neither of whom had any prior experience in cryptography when they founded the company. According to Mark, he has used a guide he found online to develop his own coin.
A Shiba Inu looked curiously into a camera when a meme appeared in 2013.
Apparently, Business Insider reported that the original objective of the project was to go on a humorous rant about all the clone coins trying hard to differentiate themselves, but all being perceived in the same way.
On the 6th of December 2013, the first block was mined for the DOGE coin, a clone coin trying to be the next Bitcoin.
Technically speaking. Based on the cryptocurrency Lucky Coin, DOGE coin uses a Proof-of-Work (PoW) algorithm. Because it is a fork of Litecoin, DOGE coin is able to be merged mined with Litecoin (LTC), but more on that later. Quite a bit of randomness is known to me. However, this does not seem as random as the original scheme.
There is a wide variation of block rewards, ranging from one DOGE per block up to 1 million DOGE per block. Quite insane.
I should also clarify that DOGE coins were not pre-mined. The founding members of the DOGE remained very small shareholders and mined alongside the newcomers. The fact they thought the DOGE coin was a joke is evidenced by the fact that Marcus left the project shortly after its founding and handed all development over to Palmer.
In relation to the random block reward that some DOGE coin miners thought was random, it turned out to be less random than they thought, thus minting blocks of high value at a disproportionate rate.
When the DOGE coin subreddit was made aware of this in 2014, the developers decided to remove it. We fixed the block reward along with the randomness component to 10,000 DOGE per block.
Every minute, 5.2 billion DOGE are mined, meaning the supply has grown by 5.2 percent. Thus, the current supply of 129 billion DOGE implies about 4% inflation per year. Due to its flat inflation rate over time, the DOGE coin will be unlike Bitcoin, which is a capped supply coin. Let’s be clear about that.
It takes roughly 5-10 minutes for DOGE coin to complete a transaction due to its high network efficiency. The coin is capable of handling around 30 transactions per second. Approximately 1 cent is charged for each transaction.
As a result of the block times being one minute rather than the 10 minutes found in Bitcoin, this is faster and cheaper than Bitcoin. However, this is a much less efficient blockchain than most other blockchains, despite being faster and cheaper than Bitcoin. The chain follows the proof-of-work principle.
Litecoin miners ensure its security. Forks of Litecoin (LTC) usually rely on script mining algorithms. Litecoin miners were able to earn DOGE block rewards through auxiliary proof of work (AuxPoW) in 2014 when mining LTC.
Due to the DOGE coin’s unique consensus mechanism, you have increased hash power to secure the network.
The tech behind the DOGE coin isn’t complicated, but it still is a meme coin. However, are there any real uses for DOGE?
Why DOGE Pumps?
There are four factors that seem to matter the most to me: meme culture, social media, Elon Musk, and Robin Hood.
Let’s begin with the first idea. Memes have taken over our lives. It is an era when the sense of misfortune can be conveyed by the ugliest of class photos.
The ether is a place where mistimed images can remain for years. Memes can even be made into memeş, a meme derivative created for endless amusement.
Therefore, it comes as no surprise that Shiba Inu coins like DOGE do so well. It’s easily recognizable and rememberable. People will have heard of it from somewhere on the internet, so they are more aware than most others.
ETH 2.0, for example, is far easier to promote than a meme dog. Simplicity sells.
Social media is the next step. Memes can go viral thanks to social media, as we all know. They work on the principle that the more people engage with a topic, the better it will perform organically. As a result, memes have supercharged engagements.
Tik-Tok enables short-form content, and memes to go viral much faster than traditional social platforms because the platform allows short-form content to go viral more easily. There’s nothing like grandpa’s Facebook here.
In light of that, it is not surprising that Tik-Tok has become one of the most popular platforms for DOGE coins.
A user named James G97 posted a video last year in which he encouraged his followers to purchase DOGE coins for $25 so that when the stock hit $1, the users would have 10 grand.
Users recently experimented with a DOGE coin trend where they attempted to get it to $1 on April 20th, the 4/20. As for what they were smoking, I want some too.
However, aside from the jokes, these kinds of simple videos paired with a young and inexperienced Tik-Tok community can get pretty popular pretty fast. They need help, though, and Twitter followers who have cult-like followings can help.
Musk’s space missions are not his only focus. Doge wants to travel to the moon as well. The DOGE coin meme has caught Elon like a fly.
The price in DOGE almost perfectly tracks his tweets about it, for example, he tweeted a simple concept that has been heavily amplified thanks to social media and Tik-Tok, which makes the hype exponentially larger.
Elon Musk’s tweet of a dog is not enough to drive the price of DOGE up, and neither do I and you. An instantly recognizable message coupled with a tweet produces that effect.
These users would not have been able to do so if they did not have easy access to a DOGE trading tool. Robin Hood is a key component of the course.
With Robin Hood’s introduction, an entirely new generation of consumers is able to trade easily, fractionally, and commission-free. Obviously, Robin Hood has stopped trading, but they have been offering crypto for a long while now.
Further, Robin Hood users do not need to worry about their private keys or offline addresses.
There are, of course, side effects to this pump. A bubble feeds on itself as users believe that the price rise confirms the underlying investment thesis.
Media coverage of the DOGE increases as its price rises. More investors are enticed to try their hands on the DOGE as a result of the wheel of Fortune. The question it raises is one that needs to be answered. Why is DOGE so eagerly pumped up in price?
Who Invests in DOGE?
DOGE coin buyers’ motivations are hard to ascertain. I can, however, posit a few theories as to why this is happening based on what I’ve observed and studied.
Having fun, some people. Memes and community mean a lot to them. DOGE is treated as a meme by them because they know that it is a meme.
Joining in on the trend and participating in the hype is what they do. Elon Musk falls into this category, according to me. The memes are fun for him. Dogecoin is only one of Elon’s many accomplishments as a mean lord.
There are also those who try to make money by pumping DOGE. You can find these users among those that know why it pumps and how to engage with it. Likewise, they are aware that DOGE is a joke, but are willing to play the game anyway.
There are people who make millions of dollars from this. While they are well aware that the DOGE coin is essentially just a meme, they also understand that there are risks associated with it.
The investors are betting they can sell at a higher price for someone who comes along later.
Then again, there is the uninformed investor. It is believed that the DOGE coin will overtake Bitcoin as the ultimate global currency.
DOGE seems to be trying to become the next Bitcoin and believes that all that is needed to accomplish that is the strength of the DOGE community.
I believe this story has a lot of the same elements as the Wall Street Bets narrative about GameStop investors. Doge differs from Bitcoin, only because there is no hedge fund shorting it.
I think many people who are in this category have also invested a substantial amount of money into DOGE. The stories like this one, where a man’s DOGE investments allowed him to buy a house, influence them.
As such, there are plenty of groups out there that are legitimate and want to make another millionaire with this mythical coin.
In any case, I hope people who buy into this narrative do not overinvest, the sentiment being shared by many financial advisors as well.
I can’t speak for everyone in the crypto space, but that’s what I understand of the current situation. Most importantly, however, DOGE’s goal now is to reach $1. Whether this is realistic is now the question. Recently, it has defied all reason.
Can DOGECOIN Reach $1?
Cryptocurrency price potential is determined by a number of factors. A key factor in tokenomics is its effectiveness. The two most misunderstood notions of tokenomics are price and market cap, especially for new cryptocurrency users.
A cryptocurrency’s value cannot be determined by its price per token. A token’s price is determined by multiplying it by its supply. The market cap shows the size of a cryptocurrency in relation to its peers.
The market cap of the DOGE coin is already 50 billion dollars despite its value being less than $1 at its current price. To put that into perspective, that would be more than Cardano (ADA), Polkadot (DOT), Spotify, or Ford Motor Company.
129 billion dollars would be the market cap if those became $1. According to market cap rankings, it would rank third. Would you consider that a good deal?
DOGE inflation is almost twice as high as Bitcoin inflation. Increasing the supply of coins will inevitably drag the price down. EIP-1559 could even eliminate protocol inflation on ETH.
Also, the DOGE coin is rather centralized for a cryptocurrency. Over 75% of DOGE is held by the top doge wallets and get this, the richest deal is holding almost 30%. Since there was no pre-mine and the owners sold what they mined, no one knows who’s behind these wallets.
Whether or not the food is good, that DOGECOIN can be dumped very easily.
Since they are not obligated to hold it, if they wanted to sell out, they could do so any time. Elon created his own centralized supply point. He tweeted that he would only fully support DOGECOIN if the largest DOGECOIN holders sold them.
I cannot guarantee that DOGECOIN will reach $1 despite all these factors. All DOGE needs to raise its price is a constant buzz on the markets to cause a rise in its price for long periods of time.
A Coinbase listing is also not entirely out of the question. Public companies have to keep profitability up now. The DOGE market has insane demand, as we have seen with Robin Hood. DOGE coin would not be that far from the past projects listed by Coinbase.
Coinbase is also very keen on listing DOGE coin on its platform and we know their community is large. Lastly, Coinbase’s listing always results in a rise in price. The community hype and this combined with the volatility could result in DOGE reaching its two all-time highs.
I still think it’s a bubble and it will come crashing down again. Even if the DOGECOIN reaches a new all-time high, even if it reaches $1, I think it’s a bubble and it will crash again. When, not if? Those implications could affect a broader community than the DOGE coin community alone.
I‘m not a financial advisor and this article is simply for educational purposes. It should not be used to make any decisions regarding your finances. If you need investment advice, please contact a qualified financial advisor.
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