After the big dump in March 2020, cryptocurrencies started to make their way up to new all time highs and after the beginning of 2021 their increase started to incline upwards.
Also, because of the increase in demand for cryptocurrencies we see that new projects come up and some of the new projects are considered shitcoins, which are the projects that don’t really have a proper whitepaper or practical usage.
Moreover, generally, we see that the market price for those shitcoins is highly volatile, and in most of their charts, we see a pump and dump scenario. Since those coins are low in volume, they can easily be manipulated by whales or hype which is created on the internet.
For Dogecoin, we see that some of the big investors like Tesla’s CEO Elon Musk or Dallas Mavericks’ owner Mark Cuban supporting the project.
Although some of the people call Dogecoin a shitcoin, Mark Cuban announced that people can buy tickets for a Dallas Mavericks game and the team’s merch with Dogecoin. In addition to this, there are also some Dogecoin Casinos where you can deposit Dogecoins and start online gambling.
What is a Shitcoin?
The term shitcoin means that a cryptocurrency has a little to no value or a cryptocurrency that has no immediate, discernible purpose. The term shitcoin has an insulting meaning against those new cryptocurrencies which are coming after the top cryptocurrencies.
Basically a shitcoin means a bad investment choice. However, it is not hard to recognize a shitcoin. Generally, the coins go through a cycle.
Shitcoins mostly follow the pump and dump pattern which cause high percentages of loss if you buy the coins towards the end of the pump.
Since the market was constantly going up, it was better to hold your coins until you compensate for your loss. On the other hand, lately the market is volatile and some people say that we have seen a macro top, it is better to avoid buying shitcoins at this time.
Since they have small market values, the shitcoins may be the most high-risk, high-reward investments. Generally, the investors in shitcoins have two possible outcomes.
First, the shitcoin that you hold can be pumped and dumped, second the shitcoin that you bought turns out to not be a shitcoin and you become one of the first adopters and make a crazy amount of profit with really small investments.
Both cases can be really profitable if you have a clear set of goals and decide on the price that you will sell.
The Start of the Project
At first, Dogecoin started as a meme coin after the famous Shiba Inu breed dog meme in 2013. It is based on Litecoin and has the same technology behind its proof of work. It started as a joke but after it was created it gained lots of investors and followers. Jackson Palmer, a product manager in Adobe Inc. created Dogecoin in order to satirize the hype of cryptocurrencies.
After the idea got positive feedback on social media, he bought a domain for Dogecoin. At the same time, Billy Markus, a software developer at IBM, wanted to create a crypto asset but he had some trouble promoting his project. So, he got in touch with Jackson Palmer in order to build the software behind Dogecoin.
Is Dogecoin Worthless?
Some people say that all of the cryptocurrencies are worthless and some strongly believe in blockchain technology and its application on cryptocurrencies. Cryptocurrencies use highly new technology and because of it many people don’t understand it.
Those who say that the cryptocurrencies are worthless say that cryptocurrencies are not tangible, they are not products by themselves, and their value changes according to purely demand-supply, which can make it open to manipulation. This means that only stocks, gold, and other precious metals are with buying.
On the other hand, lately thanks to technology, people are able to trade gold without actually owning the metal itself. You can basically open a bank account and start buying and selling gold without actually owning the material itself.
So, in this case cryptocurrencies are no different than gold. Moreover, a good or material or cryptocurrency has a value because we think that it has a value. It doesn’t have to be a tangible product itself.
Because Dogecoin started as something which mocks the cryptocurrencies, the early crypto investors don’t like it. Moreover, many people think that Dogecoin is inflationary since it doesn’t have a limited supply. Investors like limited supply of coins because they want to invest in a coin in earlier stages of it and expect its price to skyrocket.
On the other hand, Dogecoin has a fixed 5 billion supply per year and according to Doge doomers, its price won’t go up. They are right when they say Dogecoin is inflationary but its inflation rate reduces every year and after a few decades it will become nearly deflationary.
Moreover, although it is inflationary, through the cryptocurrency rallies, we have seen that Dogecoin’s price increased massively and its investors made lots of profit.
All in all, we see that the inflation of Dogecoin is nothing compared to the profit that it generates. Throughout the latest cryptocurrency, we see that Dogecoin mostly followed the pump and dump pattern. However if the investors kept holding their coins, they didn’t lose their capitals.
To sum up, Dogecoin has been a good investment tool like other cryptocurrencies and it doesn’t mean that it is worthless because it started as a meme coin. Throughout the years, Dogecoin gained lots of followers and supporters and lately it is one of the most popular coins.
As of today’s cryptocurrency value list, Dogecoin is the 4th biggest cryptocurrency and it would be bold to call it a shitcoin or scam. As it gets more valuable and popular, some institutions started to consider Dogecoin as a payment method that supports the existence of the coin against Doge doomers, and looks like as long as the crypto market doesn’t fail, Dogecoin will keep on creating gains for its investors.