May 15, 2022

Dogecoin: A Joke Or The Most Valuable Currency In The World? | DW | 11.05.2021

It only took a joke for the value of Dogecoin, one of the most popular cryptocurrencies in the world, to drop 30%. The cryptocurrency, which was born as a joke on social media eight years ago, lost more than a third of its value after Elon Musk, its most famous follower, called it a “scam” on the American television show Saturday Night Live. , the last weekend.

The Dogecoin price achieved a record before the program was issued. “Musk is probably happy he made a joke, but investors are probably feeling real pain right now,” said Justin d’Anethan, head of sales for Diginex in Hong Kong, a digital asset financial services company.

Interest in cryptocurrencies has exploded over the past year, pushing the value of all digital currencies to more than 1.9 trillion euros, backed by financial stimulus from governments, central banks, and some institutional investors.

While Bitcoin, the most valued cryptocurrency, has captured much of the limelight, it is the other alternative digital currencies, such as Ethereum and Dogecoin, that have gained ground in recent days.

Elon Musk en el program Sutarday Night Live

What’s behind the popularity of Dogecoin?

There is no easy explanation for the rise in the price of Dogecoin. The value of this coin increased more than 20,000% in the last year. Edward Moya, a senior market analyst at Oanda, a foreign exchange firm, believes that “the endorsement of celebrities like Elon Musk and Mark Cuban provided a rationale for many early investors and gave the last push.” Musk’s trading company SpaceX accepted payment for a lunar mission with this cryptocurrency. The Dogecoin-funded mission, scheduled for 2022, is called “DOGE-1 Mission to the Moon.”

Is Dogecoin the Next Bitcoin?

Dogecoin and Bitcoin are very different, although the former is based on the same software code that Bitcoin has.

Dogecoin can potentially have an unlimited supply, which means that those looking to keep investing in the coin for longer could see the value of their investment decrease. Bitcoin, on the other hand, is capped at 21 million units, making it scarce and more valuable, as are gold and diamonds, which are also in limited supply.

If Dogecoin was designed to be a cryptocurrency for “dummies”, Bitcoin was always thought of as a decentralized digital currency, an alternative to central bank controlled money.

Even though Dogecoin has come a long way from its satirical origins to being a popular cryptocurrency, it does not endanger Bitcoin’s dominance. Its $ 70 billion valuation is just a fraction of a trillion dollars of Bitcoin.

“Dogecoin is a crypto kindergarten. It was created for fun and also to illustrate how cryptocurrencies work,” Jeff Gallas of the German Bitcoin Foundation told DW. “Therefore, it is good to start, perhaps, by learning about how cryptocurrencies work and not taking it too seriously,” he clarified.

Is Dogecoin a good investment?

Dogecoin followers adore it, promote it as a cryptocurrency of the future. Its low transaction fees and great offer make it ideal for Internet users to use to pay for content online. Also, transactions with Dogecoin can be processed faster than with Bitcoin.

(rmr/ers)

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Dogecoin: A Joke Or The Most Valuable Currency In The World? | DW | 11.05.2021