From Jokey Meme to Major Investment, Dogecoin Takes Off
By the beginning of June 2021, Dogecoin (DOGE) had come out of a recent downturn to reach a year-over-year price increase of more than 12,000 percent. The popular—and controversial—cryptocurrency’s rise is partly thanks to heavy promotion by Elon Musk and other celebrity investors. But its success is also anchored in what increasing numbers of experts view as an intriguing overall brand and potential (though ultimately unlikely) big-payday investment opportunity.
Cheap, accessible, and appealing
Dogecoin is an open-source, peer-to-peer cryptocurrency that got its start in late 2013. It was originally conceived as a joke, and is still viewed as an altcoin, a cryptocurrency with notable differences from the original Bitcoin. Dogecoin derives its supporting technology from Litecoin, a “fork” of Bitcoin that uses different blockchain protocols.
Among Dogecoin’s most touted advantages is its low barrier to entry for investors. It uses a scrypt algorithm, its supply is unlimited, and its price remains under a dollar.
Additionally, as seemingly endless social media memes attest, Dogecoin offers perhaps the most accessible logo around today: an image of a smiling Shiba Inu dog that looks eager to play.
But is it worth it?
Serious investors aren’t sold on Dogecoin. Mark Cuban, for example, continues to express skepticism, although he has purchased thousands of Dogecoin for his young son, as a way to introduce him to trading.
In a June 3, 2021, online update, the Motley Fool investment news service noted that Dogecoin still comes with significant risk. The service even called it a potentially “dangerous” investment, and recommended that most of its readers would be better served by making safer purchases from among the S&P 500, although these investments don’t offer the excitement or the possibility of a get-rich-quick payout of Dogecoin.
The Motley Fool also points out that, since Dogecoin still lacks the widespread merchant acceptance of Bitcoin, its real-world utility and long-term value remain in doubt.
Driven by community
But one of Dogecoin’s creators, Billy Markus, finds the cryptocurrency’s outsider status as a “parody” of crypto markets, as well as its user-friendliness, to be key selling points. Despite admitting its volatility as an investment, he noted that Dogecoin’s very identity is its success.
An entire younger generation of influencers, YouTubers and other brand ambassadors understands and appreciates the ironic, even “meta” nature of the Dogecoin meme. It’s their passion for the brand that keeps it moving and trading, and that has propelled it into a rare position of mainstream recognition.
In fact, an entire community has built up around Dogecoin. In 2014, fans contributed almost 30 million of the cryptocurrency units to fund the Jamaican bobsled team’s travels to compete in that year’s Winter Olympics. The community has also made substantial donations to global service projects, such as building a well in Kenya. Additionally, even such a venerable American charitable institution as the American Cancer Society recently decided to accept donations made in Dogecoin.