If you had invested just over $ 18,000 in Dogecoin at the start of 2021, you would be a Dogecoin millionaire at the time of this writing, Monday April 19.
The bark of the Dogecoin pack can be heard all over the world. Indeed, enthusiasts have made April 20th #DogeDay.
What exactly is Dogecoin? How do you even pronounce it? Can you actually buy something with it? If you and your dog are unsure what to do with this dog-themed cryptocurrency, read on.
How does Dogecoin work? 8 Answered Questions
1. What is Dogecoin?
Dogecoin is a cryptocurrency that was developed in 2013 by software engineers Billy Markus and Jackson Palmer. 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 huge public record of transactions.
Markus and Palmer created Dogecoin as a joke and combined the Bitcoin craze with the Doge meme popular at the time with a Shiba Inu dog. Both ended their collaboration with Dogecoin in 2015. In fact, Markus recently wrote on Reddit that he sold his coins for about enough to buy a used Honda Civic.
2. Why do I suddenly hear about it?
Dogecoin prices rose in 2021 for several reasons including Reddit user activity, rising cryptocurrency prices and tweets from celebrities, notably Elon Musk, CEO of Tesla. After Musk tweeted “Doge” and “Dogecoin is the people’s crypto” in February, the price soared 50%. On April 1, Musk tweeted – what many consider to be an April Fool’s joke – that his SpaceX company is “going to put a literal Dogecoin on the literal moon”.
Brands like Slim Jim, Snickers, and Milky Way have stepped in with Dogecoin-related tweets.
3. How do you pronounce it?
4. What is the point of #DogeDay?
Dogecoin enthusiasts are hoping to push the price of coins above $ 1. For most of cryptocurrency history, they were worth around half a cent. Dogecoins traded for about 37 cents on April 20, compared to last week’s high of 41 cents. The 4/20 date is of course celebrated by marijuana lovers and is considered Elon Musk’s favorite holiday.
5. Is there a limit to the delivery of Dogecoins?
No, there is an important difference between Dogecoin and Bitcoin. Bitcoin’s developers have 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.
However, there is no such limit at Dogecoin. As with Bitcoin, new coins are unlocked through a process called mining, by solving complex math problems using computers. But Dogecoin is a lot easier to mine compared to Bitcoin. Millions of Dogecoins are mined every day. There are currently 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 means of payment. The Mavericks reportedly generated $ 122,000 in merchandise revenue from Dogecoin sales. The Latvian airline airBaltic, the electronics retailer Newegg and the luxury resort group Kessler Collection accept Dogecoin payments, among others. Overall, however, its usage is quite limited.
7. What is the total value of Dogecoins?
As of Tuesday April 20, also known as #DogeDay 2021, approximately $ 50 billion. This makes Dogecoin worth more than Walgreens, Ford or Roku, all of which have a market capitalization of just under $ 50 billion.
8. Should I invest in Dogecoin?
If you want to give Dogecoin a few more dollars just for fun, this is your call. However, you should only do this if you do not have high-interest debt Emergency fund is healthy and you regularly contribute to a retirement account, such as 401 (k) or Roth IRA.
You could make some money on Dogecoin, but you might as well see the bulk of your money disappearing. If Dogecoin buys you entertainment, great. But just invest when you can afford to lose.
Robin Hartill is a certified financial planner and senior writer at The Penny Hoarder. She writes the Dear Penny personal finance advisory column. Send your tricky money questions to AskPenny@thepennyhoarder.com.
This article originally appeared on www.thepennyhoarder.com