By now, you may have heard about Dogecoin. Celebrities such as Elon Musk, the world’ richest man, have tweeted about this crypocurrency. In the past, it has been used as the currency to fundraise for many events such as Doge4Water in 2014 to raise fund for the National water day. Its has within the past week risen over 7 folds, from just over 1 cents to nearly 9 cents.
This cryptocurrency started in 2013 as a cryptocurrency that is fun and in itself, based off of the Doge meme. As part of the nature of the coin when it was introduced, there were 100 billion coins in circulation, much more than other cryptocurrencies. In 2015, they removed the cap and effectively introduced “inflation” for this currency. This, at the end of the day means that there is an infinite supply of Dogecoin. The inflation rate of Dogecoin is 10,000 blocks per minute. That means that there is 10,000 new coins that can be mined every minute.
Compared to Bitcoin, there is only 21million bitcoin, ever. This is vastly less than the 100 billion Dogecoin, not including inflation. If the same amount of money that was invested in Bitcoin is placed into Dogecoin, the price of Dogecoin would only be over 3USD.
The takeaway? In my opinion, Dogecoin would be extremely lucky to reach 1USD. Although, Dogecoin may seem to be a great short-term investment, the inflation rate of Dogecoin does seem to be a deterrent for the coin to reach $1.
What do you guys think?
