Dogecoin cryptocurrency — Just a joke or huge potential?

Every crypto enthusiast has at least heard about the “meme coin”, Dogecoin. It was created with the sole purpose of having fun, since the creators thought that cryptocurrency was getting too serious, so they decided to make a coin that was instant, fast to mine and decentralized.

However, what nobody expected was for it to become one of the largest cryptos in the market, currently in the top 30 in market cap of all cryptocurrencies! It’s also one of the most widely used on the internet. People use it to donate to charity, tip other users on Reddit, and more. Someone even tried to use it to sell a house!

Technically speaking, Dogecoin is a variant of Litecoin, one of the most popular cryptocurrencies, except that it’s faster to mine (the block time is one minute whereas Litecoin’s is two minutes and thirty seconds). There is nothing particularly special about it from a technical standpoint, in comparison to other altcoins and litecoin variations. It’s slightly easier to mine and some people make a little bit of profit from that, but it’s almost never a good idea to mine crypto.

Because of its large market cap, even though it was supposed to be a joke, Dogecoin has always been a potential investment that many crypto investors consider. Throughout its history, it has been pumped five times, and it’s currently (as of the 30th of January of 2021) going through its largest pump ever. The pumps happened in January 2017, January 2018, April 2018, September 2018 and finally January 2021.

You might be asking yourself, should I invest in dogecoin in 2021? The answer is that, historically, dogecoin has quickly fallen back down in price after its sudden pumps. That doesn’t necessarily mean that the same thing will happen this time around, but it’s a definite possibility. In the cryptocurrency investment world, you need to be extremely careful of so-called pump and dumps. A “pump and dump” is when someone or a group of entities pump the price of a crypto way higher up than it’s real value, and then sell it all at once to make a profit.

I’m not saying that dogecoin is necessarily going through a pump and dump, but the pump part of the equation is undeniable. Be very careful about investing a lot of money into it — only invest what you’re willing to lose. However, throwing a few bucks into dogecoin to see what happens could be a fun idea.

Originally published at http://cryptorodactyl.wordpress.com on January 30, 2021.

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