Dogecoin Review: Pros and Cons of Investing in Dogecoin

Similar to an alternative currency to Bitcoin, Dogecoin is a peer-to-peer, accessible cryptocurrency that offers users a completely anonymous, decentralized, and safer system independent from any third-party influence during transactions. Dogecoin was created by software developers Billy Marcus and Jackson Palmer in mid-2013. Palmer used a joke from the time that contained the intentionally misspelled word “doge” to refer to a Shiba Inu dog to brand the cryptocurrency's logo.

In 2013, Dogecoin rose to prominence among those who merely wanted to experiment with cryptocurrency. Later, websites like Reddit and Dogecoin began paying their content creators with Dogecoin, which caused Dogecoin to soar in value relative to other cryptocurrencies.

Elon Musk, the founder of SpaceX and the most well-known Dogecoin supporter, occasionally began tweeting about a fake “Doge” magazine cover after that, which caused the value of this joke cryptocurrency to increase. After that, more well-known individuals like Snoop Dogg began tweeting about and endorsing Dogecoin on social media.

Dogecoin's value increased by approximately 600% after Elon Musk tweeted, “Doge barking at the moon,” in April 2020. Currently, Dogecoin is ranked number 5 on the top Cryptocurrency via WikiBits website.

PROS

Simple transaction. Dogecoin and Bitcoin have a lot in common, thus it offers several features that are similar to Bitcoin. The crypto's coding is remarkably similar to that of Bitcoin, making transactions safer and simpler. Additionally, Dogecoin has no mining restrictions. This gives investors the ability to trade Dogecoin at any time, whether they are making a long-term or short-term venture.

Stock Exchange Listing. Ever since the launch, many of the major stock and cryptocurrency exchange platforms have registered Dogecoin, including eToro, one of the largest global cryptocurrency brokerage firms. Client requests to trade Dogecoin have significantly risen as a result of its inclusion in eToro. The site has also been linked to an increase in traffic from customers looking to trade DOGE.

Compatible Decentralized Exchanges. On decentralized exchanges, this cryptocurrency can be traded and used for transactions. In particular, the Ren Project has made it feasible for it to operate on the Ethereum blockchain and to connect to the decentralized finance network. In the blockchain industry, this indicates that it is compliant with the newly emerging decentralized finance trend.

It can also be “wrapped,” which locks it in a state where it is compatible with a deal until it is later released, even though it cannot directly interact with smart contracts because it operates within its own blockchain and has a designed smart contracts functionality.

Celebrity Endorsements. Elon Musk, the CEO of Tesla, recently endorsed Dogecoin after praising it and continuously tweets about the cryptocurrency. The dogecoin market price has increased by more than 14000% just in 2021, which is seen as a favorable development. Dogecoin has become increasingly well-known thanks to notable people like Mark Cuban, owner of the Dallas Mavericks, and Snoop Dog who have been continuously promoting Doge on their social media accounts and businesses.

CONS

Insufficient technical support. Despite its expanding user and supportive base, Dogecoin has a terrible technical support system. Compared to Cardano, Ethereum, and Bitcoin, the development team is relatively small. Moreover, the strategic plan is not as well-defined as that of these market leaders in cryptocurrencies. Since 2015, there have been no significant technology developments or upgrades. It is also crucial to emphasize the point that it lacks any technologically distinctive features. In comparison to the major participants, the clear objectives or aspirations of this cryptocurrency and the overall blockchain platform are not as grandiose.

No Supply Cap. One of Dogecoin's main drawbacks is the absence of a supply limit. It's because cryptocurrencies without a supply limit are poor investments for inflation hedging. Furthermore, large-scale blockchain mining operations will soon be necessary due to the continually growing supply. This cryptocurrency will need to increase its population of miners and their robust computers in order to deal with a rising volume of transactions in the future since it uses a proof-of-work process to reach consensus.

With a market cap of $8.9B as of the moment, this is Dogecoins standing in the market:

Unquestionably, one of Dogecoin's main benefits is its uniqueness. Its connection to a renowned meme and original status as a joke drove it to widespread acceptance. Additionally, people's interest has been stimulated by the same general appeal, allowing them to further research and comprehend cryptocurrencies.

Of course, it also highlights the drawbacks of blockchain technology, the hazards that could harm the marketplace, and the criticisms of cryptocurrencies. But as compared to other cryptocurrencies, one of its main disadvantages is that, because of its buzz in the market value and vulnerability to speculative events, it could not be a suitable asset to trade or invest in.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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