If you had invested just over $ 18,000 in Dogecoin in early 2021, you would be a Dogecoin millionaire as of this writing on Monday, April 19. Woof.
The bark of the Dogecoin package has been heard all over the world. In fact, enthusiasts have declared April 20 as #DogeDay.
So what exactly is Dogecoin? How do you pronounce? Can you buy something with it? If you and your dog aren’t sure what to do with this canine-themed cryptocurrency, read on.
How does Dogecoin work? 8 answered questions
1. What is Dogecoin?
Dogecoin is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer in 2013. A cryptocurrency is a virtual form of money that you can also buy and sell as an investment. Like other cryptocurrencies, it runs on blockchain technology, which is basically a giant public record of transactions.
Markus and Palmer created Dogecoin as a joke, combining the Bitcoin craze with the then popular Doge meme featuring a Shiba Inu dog. They both ended their involvement with Dogecoin in 2015. In fact, Markus recently wrote on Reddit that he sold his coins for enough to buy a used Honda Civic.
2. Why did I suddenly find out about it?
Dogecoin prices have rebounded in 2021 for a number of reasons, including Reddit user activity, rising cryptocurrency prices, and tweets from celebrities, particularly Tesla CEO Elon Musk. In February, after Musk tweeted “Doge” and “Dogecoin is the people’s crypto,” the price jumped 50%. On April 1, Musk tweeted, in what many believe was an April Fool’s Day joke, that his company SpaceX “is going to put a literal Dogecoin on the literal moon.”
Brands like Slim Jim, Snickers, and Milky Way have jumped on the bandwagon with Dogecoin-related tweets.
3. How is it pronounced?
4. What is the goal of #DogeDay?
Dogecoin enthusiasts hope to push the price of the coins to more than $ 1. For most of the history of cryptocurrencies, they have been worth around half a penny. As of April 20, Dogecoins were trading at about 37 cents, down from last week’s high of 41 cents. The 4/20 date is, of course, celebrated by marijuana lovers and is said to be Elon Musk’s favorite holiday.
5. Is there a limit on the supply of Dogecoins?
No. That is an important distinction between Dogecoin and Bitcoin. The creators of Bitcoin limited the number of coins that can be mined to 21 million. Proponents of Bitcoin argue that the limited supply makes the cryptocurrency an effective store of value.
But that limit does not exist with Dogecoin. As with Bitcoin, new currencies are unlocked through a process called mining by solving complex mathematical problems with computers. But Dogecoin is much easier to mine compared to Bitcoin. Millions of Dogecoins are mined every day. Currently, there are more than 129 billion Dogecoins in circulation.
6. What can I buy with Dogecoin?
Not much. Dallas Mavericks owner Mark Cuban announced in March that the team would accept cryptocurrency as a form of payment. The Mavericks have reportedly generated $ 122,000 in merchandise income through Dogecoin sales. Latvian airline airBaltic, electronics retailer Newegg, and luxury resort group Kessler Collection are among those that accept Dogecoin payments. But in general, the use is quite limited.
7. What is the total value of Dogecoins?
As of Tuesday April 20, also known as #DogeDay 2021, about $ 50 billion. That makes Dogecoin worth more than Walgreens, Ford or Roku, all of which have market capitalizations just under $ 50 billion.
8. Should I invest in Dogecoin?
If you want to invest a little more in Dogecoin just for fun, that’s your call. But you should only do this if you don’t have high-interest debt, your emergency fund is healthy, and you contribute regularly to a retirement account, such as a 401 (k) or Roth IRA.
You could earn some cash with Dogecoin, but you could easily see most of your money disappear. If Dogecoin buys you entertainment, great. But only invest if you can afford to lose.
Robin Hartill is a Certified Financial Planner and Senior Writer at The Penny Hoarder. Write Dear Penny’s personal finance advice column. Send your misleading money questions to [email protected]