Why Dogecoin Will Fail?

For more than 100 years, the stock market has been the preferred wealth creator. It’s historically generated an average annual return of around 7%, which is higher than all other asset classes.

To build on the previous point, there’s a seemingly endless supply of new cryptocurrencies and blockchain projects being introduced on a regular basis. Because the barrier to entry in the digital currency space is nonexistent, Dogecoin‘s lack of competitive advantages makes it a sitting a duck.

But with the exception of his announcement that he’s working with Dogecoin‘s developers to improve network efficiency, absolutely none of Musk’s other tweets and memes concerning the coin had any substance behind them. Even though Bitcoin is a completely different token than Dogecoin, the thesis here is clear: China doesn’t want any digital currencies competing against its central bank-backed yuan. One of the core purposes of digital currencies is to ensure decentralization — i.e., that no large entities exhibit significant control over a network.

Why Dogecoin will never go up?

Those who believe that Dogecoin will never reach $1/coin says that Dogecoin has too many tokens in circulation and has a 5 billion per year coin supply for eternity. As a result, Doge is inflationary, loses value over time, and worse crypto. … Until all the Bitcoins are mined, this crypto also has inherent inflation.

What caused Dogecoin to crash?

Another reason the Dogecoin train was headed for derailment was the crackdown on Bitcoin mining in China. Even though Bitcoin is a completely different token than Dogecoin, the thesis here is clear: China doesn’t want any digital currencies competing against its central bank-backed yuan.

Is Dogecoin going to crash?

The panel average, which puts the dogecoin price at 42 cents at the end of 2021, sees dogecoin hitting $1.21 by 2025 and $3.60 by 2030 though the experts are starkly divided with some confident the meme-based cryptocurrency will soon crash to zero and others forecasting a huge rally to $10 per dogecoin.

Will Dogecoin reach 100 dollars?

There’s a high probability that Dogecoin will reach $1 per coin. … However, it’s impossible that Dogecoin will ever get to $100 per coin. Dogecoin is designed to inflate, with 5 billion coins being added to the 100 billion surplus each year.

Dogecoin is the original meme-coin and is well known to cryptocurrency veterans. This cryptocurrency guide focuses on Dogecoins role in the cryptocurrency ecosystem, its origins, and Dogecoins key price drivers.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The cryptocurrency Dogecoin was created as a joke but eventually found a purpose as a more friendly, approachable alternative to Bitcoin.

Less technical speculators who value a cryptocurrencys alternative-pop status may find it an entry point into the crypto world. Dogecoin was originally founded as the result of a joke made by Jackson Palmer in November 2013. For some years, Dogecoin didnt see much development while Jackson Palmer left the project by declaring that he was going on an extended leave of absence.

Also in 2021, the Ren project allowed DOGE to be accessable on the Ethereum network as a wrapped coin named renDOGE. renDOGE is an exact representation of Dogecoin on the Ethereum blockchain Ren has been designed to enable such cross-change operability to increase collective crypto asset liquidity. In 2021 Dogecoin saw a major price surge, partially thanks to an influx of users chasing GME style highs.

This run was given a further boost when Elon Musk began tweeting about Dogecoin, calling it the cryptocurrency of the people. When a cryptocurrency, like Dogecoin, is inflationary, it means that there is no maximum limit to the number of coins in circulation. Bitcoin , Cardano, Ethereum , and many other cryptocurrencies are designed with a hard supply cap of coins.

The potential problem with this is that once the cap is reached it may no longer be profitable for miners to continue to sustain the system. Much of the community, particularly older members, are skeptical of speculation about Doges potential prices. I have a lot of faith in the Dogecoin core development team to keep the software stable and secure, but I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it, which hasnt released a software update in over 2 years, has a $1B+ market cap.

Dogecoin was based on the popular Internet meme featuring a Shiba Inu Image by Aranami via CC BY 2.0 In late January and early February, 2021, Dogecoin found itself boosted by a sudden influx of users from the WallStreetBets subreddit . In contrast, cryptocurrencies, like Dogecoin, take a decentralized approach to produce new tokens, and DOGE is created by its community.

The switch allowed Litecoin miners to process Dogecoin transactions by using their computing power in order to solve complicated equations. Once the equation is solved, a new block is added to the Dogecoin network and the miner is rewarded with DOGE. The primary price driver for DOGE is media attention, especially given its digital cultural influence.

The meme-based coin saw a surge in value in early 2018 as a number of media outlets began to pick up the story that Doge had hit a market cap of over $2.0 billion dollars. Elon Musk also openly endorsed the coin in July 2020, which resulted in a 14% price hike. Musks continues to tweet about Dogecoin and remains to be thought of as a huge DOGE influencer today.

Thats the same year when DOGEs market capitalization surged beyond $80 billion, with a new all-time-high reaching close to $0.70. These kinds of stories tend to lead to new traders pouring money into a currency, often due to the fear-of-missing-out (FOMO). It can be possible to try and predict those crashes but it is risky and it may result in you losing money, rather than making it.

The most recent notable impact on DOGE has been the REN projects cross-chain liquidity solution that allowed renDOGE to be accessed on the Ethereum blockchain. In 2021 a number of users from the community successfully advertised Dogecoin on billboards around the United States. If Dogecoin users successfully complete a fundraiser, it will garner media attention which is likely to result in a positive price rise for DOGE.

As more mainstream traders become involved in cryptocurrency trading you should expect to see prices broadly moving upward with some slightly rocky periods. Despite the communitys broad optimism, experts are generally more bearish toward Dogecoins future prospects. In January, he argued via Twitter that, while Dogecoin is technically sound, it shows that traders arent doing their due diligence.

Back in 2018, John McAfee seemed bullish about the prospects of Dogecoin in his coin of the week Tweet. Public opinions on Dogecoin like John McAfees have a significant impact on price movements.

Dogecoin will fail because its inflationary, the worst crypto for the store of value, worse than USD in every possible way, transaction speed per second is slow, no institutional support, and has a limited real-world use case.

For example, if the total number of coins is limited, miners would stop securing the network once the block rewards decline. Almost everyone in the crypto community, including institutional investors, is buying Bitcoin because its deflationary.

In contrast, investors are less interested in Doge because the network devalues it each passing minute. If a company issues new shares to raise more money, it is seen as unfavorable because it cheapens current investors investments. Almost everyone is critical of the government because they print money out of thin air, which creates inflation.

If you use the US dollar or your local currency to purchase Dogecoin, your investment is destroyed on two fronts: We can find the theoretical transaction number per unit time of Dogecoin using the following formula: In a single day, Dogecoin can process 40 x 60 x 60x 24 = 3,456,000 transactions (practical 40 transfers per second).

Because of Doges inflationary model, institutional investors are not interested in this cryptocurrency. Ethereum has smart contracts, Polkadot can be used to interconnect between different and isolated blockchains. In contrast, Bitcoins block time is 10 minutes and has a 21 million supply cap.

Billy Markus and Jackson Palmer started Dogecoin to mock Bitcoin and the cryptos in general.

I only had like 10 dollars of doge that i sold yesterday to buy some LTC, but why is everyone so sure that it wont go anywhere? I always thought that it only had worth because it went viral for a day during the pump and dump and then kept some of its value from bagholders shilling it, but today and yesterday it seemed pretty stable at an actual high, when usually after reaching it it always dropped from bagholders selling it to minimize their losses at the cost of someone else. Did i just explain it to myself or is there more to it? Im really kinda FOMOing right now so please talk me out of it.

5. Musk’s tweets lacked teeth (and tangibility)

Elon Musk has been one heck of a driving force for Dogecoin. But with the exception of his announcement that he’s working with Dogecoin‘s developers to improve network efficiency, absolutely none of Musk’s other tweets and memes concerning the coin had any substance behind them. It’s also worth pointing out that the “Dogefather” has flip-flopped on Bitcoin before, so his conviction to wholeheartedly support Dogecoin should be taken with a grain of salt.

6. China put its foot down

Another reason the Dogecoin train was headed for derailment was the crackdown on Bitcoin mining in China. Even though Bitcoin is a completely different token than Dogecoin, the thesis here is clear: China doesn’t want any digital currencies competing against its central bank-backed yuan. This suggests that some governments won’t be OK with digital currencies infiltrating their economy. As the second-largest country in the world by gross domestic product, China’s actions have sent ripples throughout the crypto space.

7. Mining inflation constantly devalues “hodlers”

Though it pales in comparison to Dogecoin‘s lack of real-world utility, the persistent token inflation caused by mining causes another problem for this cryptocurrency. In a typical year, 5.2 billion Dogecoin will be created from cryptocurrency mining (i.e., validating transactions on Dogecoin‘s blockchain). In 2021, this’ll lead to circulating supply inflation of about 4%. That may not sound like much, but it’s been well over a decade since the inflation rate in the U.S. topped 4%. Suffice it to say, Dogecoin holders — or, as they call themselves, “hodlers” — are constantly seeing their positions eroded by dilution.

8. Dogecoin lacks decentralization

One of the core purposes of digital currencies is to ensure decentralization — i.e., that no large entities exhibit significant control over a network. Unfortunately, Dogecoin fails this decentralization effort. According to BitInfoCharts.com, despite more than 3 million addresses owning at least $1 worth of Dogecoin, just 95 addresses control 66.01% of all outstanding tokens. If and when these Dogecoin whales sell, they can easily tank the price of the people’s currency.

9. Margin is a big problem

The proliferation of leverage on cryptocurrency exchanges is yet another reason why Dogecoin was destined for disaster. Back on May 19, Bybt.com reported that a sudden drop in the price of digital currencies triggered margin calls on more than 887,000 crypto accountholders, liquidating some $9.4 billion in crypto assets to cover those debts. Though margin can pump up investors’ profits, it can also magnify their losses if their timing is wrong. With brokerages allowing significant margin usage on these highly volatile assets, it was just a matter of time before margin calls crushed those gambling on Dogecoin.

How to Buy Dogecoin

Dogecoin is now close to, if not as accessible to trade as Bitcoin or Ethereum. You can purchase Dogecoin on some of these popular crypto exchanges.

Brokers for Trading Dogecoin

If you are interested in trading cryptocurrencies, see our reviews of regulated brokers available in .CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74%-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.The cryptocurrency Dogecoin was created as a joke but eventually found a purpose as a more friendly, approachable alternative to Bitcoin. The Dogecoin community has catapulted DOGE to cult status. Less technical speculators who value a cryptocurrency’s alternative-pop status may find it an entry point into the crypto world.Dogecoin is a cryptocurrency based on Luckycoin (which is, in turn, based on Litecoin). Dogecoin was originally designed to be a more approachable alternative to Bitcoin, Litecoin, and other cryptocurrencies.As such, there aren’t any groundbreaking technicalities that set Dogecoin apart from the pack.The cryptocurrency hasn’t seen any major updates since 2015 (although it is able to benefit from improvements to the Litecoin code). The true value of Dogecoin lies in the strong and vibrant community that sprung up around it.

Miners Are Rewarded With Dogecoin

Dogecoin’s creator sought to solve this problem by ensuring that miners would always be rewarded with new Dogecoin and so there would always be an incentive to mine more coins.An inflation-based approach was also designed to replace lost coins and keep Dogecoin at a stable 100 billion coins.

The Dogecoin Community

The main asset of Dogecoin isn’t the technology behind it but the community that has built up around it.Many of the community members prefer to think of Dogecoin as a currency in its own right, often repeating the refrain “1 Doge = 1 Doge”.Much of the community, particularly older members, are skeptical of speculation about Doge’s potential prices. Although this skepticism doesn’t stop users from hoping that Dogecoin goes to the moon!In the first three quarters of 2021, Dogecoins highs were around the $0.68 mark.

Dogecoin vs Bitcoin

Even Dogecoin’s own creator, Jackson Palmer, believes Dogecoin’s success demonstrates how far cryptocurrency has strayed from its original goals:On November 27, 2013, Jackson Palmer made a joke that would lead to the birth of a new cryptocurrency he said:The joke caught the interest of many users, including the programmer Billy Marcus who contacted Palmer to discuss the possibility of turning his joke coin into reality.Just over a week later, on December 6th, it was possible to mine and trade Dogecoin. What had begun as a joke about the state of cryptocurrency had become a serious project.In late January and early February, 2021, Dogecoin found itself boosted by a sudden influx of users from the WallStreetBets subreddit. This led to a n equally sudden influx of retail cash that briefly pushed prices as high as 7.2¢, an all-time high for DOGE.

What Is Auxiliary Proof-of-Work (POW)?

The basic technology behind Dogecoin is based on Litecoin and LTC miners were previously able to mine Dogecoin using Auxiliary Proof-of-Work (aPOW).The switch allowed Litecoin miners to process Dogecoin transactions by using their computing power in order to solve complicated equations.Once the equation is solved, a new block is added to the Dogecoin network and the miner is rewarded with DOGE. This reward system serves two purposes.The first is to encourage miners to devote computing power in order to complete transactions on the Dogecoin blockchain, while the second is to regulate the creation of new DOGE, which is then distributed by miners.Dogecoin is a cryptocurrency, and like all cryptocurrencies, it is highly volatile and prone to large surges and big dips.Dogecoin, in particular, has experienced a fairly turbulent history and is prone to quite abrupt price changes.

Does Dogecoin Get Media Attention?

The primary price driver for DOGE is media attention, especially given it’s digital cultural influence.The meme-based coin saw a surge in value in early 2018 as a number of media outlets began to pick up the story that Doge had hit a market cap of over $2.0 billion dollars.Elon Musk also openly endorsed the coin in July 2020, which resulted in a 14% price hike. See more popular opinions on Dogecoin. Musk’s continues to tweet about Dogecoin and remains to be thought of as a huge DOGE influencer today.Dogecoin got even more media attention in early 2021 on the back of the Wallstreetbets GameStop phenomenon. That’s the same year when DOGE’s market capitalization surged beyond $80 billion, with a new all-time-high reaching close to $0.70.These kinds of stories tend to lead to new traders pouring money into a currency, often due to the fear-of-missing-out (FOMO).However, these surges are often followed by sharp crashes as large volume traders engage in profit-taking. It can be possible to try and predict those crashes but it is risky and it may result in you losing money, rather than making it.Followig it’s bull run in May 2021, DOGE crashed by almost 74% within just over one month from around $0.68 in May to the $0.17s by June.

Updates To Dogecoin’s Features

Dogecoin has not seen any major updates since 2015, so any rumour of new features could well lead to an increase in prices.You should keep your eye on the Dogecoin Reddit account in an attempt to anticipate any new features or services of Dogecoin that plan to utilize Dogecoin as a payment method.These kinds of announcements tend to lead to an increase in a cryptocurrency’s value.The most recent notable impact on DOGE has been the REN project’s cross-chain liquidity solution that allowed renDOGE to be accessed on the Ethereum blockchain. The heavy technological lifting was not done on Dogecoin’s side.Still, a coin with such popularity can afford to remain static in development, or the lack of.

Dogecoin’s Active Subreddit Thread

With Dogecoin, in particular, it is worth keeping an eye on their active (and often hilarious) subreddit.Dogecoin users have also been known to take marketing into their own hands. In 2021 a number of users from the community successfully advertised Dogecoin on billboards around the United States.In between all of the memes and jokes, the community occasionally attempts to organize serious events such as fundraisers.If Dogecoin users successfully complete a fundraiser, it will garner media attention which is likely to result in a positive price rise for DOGE.

What Is The Price Outlook For Dogecoin?

Even by cryptocurrency’s standards, Dogecoin has experienced particularly pronounced price shifts.The cryptocurrency market is still relatively young, so you should expect an unstable market with lots of peaks and troughs.On a medium-to-long-term basis, Dogecoin has been on a general upward trend, like many other cryptocurrencies. That said, 2021 has shown some cryptocurrencies to set more specified market paces of their own, including DOGE.As more mainstream traders become involved in cryptocurrency trading you should expect to see prices broadly moving upward with some slightly rocky periods.

John McAfee’s Comments On Dogecoin

Back in 2018, John McAfee seemed bullish about the prospects of Dogecoin in his coin of the week Tweet.

Other Popular Comments About Dogecoin

Elon Musk has also been a long-time supporter of Dogecoin. His tweets have often caused a significant price lift and he has described Dogecoin as the cryptocurrency of the people.

Unsustainable Currency:

Unlike Bitcoin, Dogecoin is inflationary and has no supply limit. Each minute, 10,000 Doge is added into the network. At this rate, miners add more than 5 billion coins per year.The creators of Dogecoin — Billy Markus and Jackson Palmer — had good intentions for not putting a supply cap on this coin. For example, if the total number of coins is limited, miners would stop securing the network once the block rewards decline. When Block rewards decrease, transaction fees would increase. It’s what’s happening in the Bitcoin blockchain. To solve this issue, Dogecoin creators made this crypto inflationary. But it created another problem.Because of this inflationary model, Doge is not a store of value. In fact, it’s the worst crypto as a store of value. Almost everyone in the crypto community, including institutional investors, is buying Bitcoin because it’s deflationary. In contrast, investors are less interested in Doge because the network devalues it each passing minute.If a company issues new shares to raise more money, it is seen as unfavorable because it cheapens current investors’ investments. Almost everyone is critical of the government because they print money out of thin air, which creates inflation. So, why are we not critical of Dogecoin when its inflation rate is higher than the US dollar?If you use the US dollar or your local currency to purchase Dogecoin, your investment is destroyed on two fronts:If we buy and hold Doge, we can profit if the price increase rate outnumbers Doge and the USD inflation rate.

Not Technological Breakthrough:

Bitcoin now has a trillion-dollar market cap, Ethereum has a $200 billion market cap. It’s not because of the retail investors; it’s due to institutional backing.Investors invest to maximize their profit. Because of Doge’s inflationary model, institutional investors are not interested in this cryptocurrency. As a result, its price would not rise.Dogecoin is not stock; it’s a currency. When we purchase a share of a company, we get fractional ownership of that business. A company has value. If the company grows and its revenue increases, its share price also increases.In contrast, Dogecoin is not backed by anything. Its price would rise if and only if more people buy Doge. This way, the early investors can bail out with a profit. Subsequent Doge investors can profit if more investors buy Doge and the price increases as a result.Some companies give dividends, for example, Ford, Walmart, Apple. If we buy and hold stocks of these companies, we can make a profit in two ways:There are proof-of-stake cryptocurrencies such as Polkadot, Ethereum 2.0, where we can earn (dividends) by staking our cryptos. Dogecoin does not give any staking rewards either.For all these reasons, institutional investors are not interested in investing in this coin.

Limited Use Case:

Cryptocurrency, in general, has minimal real-world use. Only a handful of retail shops accept Doge. Cryptos are volatile. Its price fluctuates a lot. Thus, many business owners are not interested in taking it as a form of payment.Doge does not provide any extra benefit over USD. It’s slower than USD transactions, has more inflation, and is more technologically complex. Why would business owners adopt it?A trustless Dogecoin network is worse than a trust-based banking network with sufficient security with FDIC and SIPC insurance.

Branding Issue:

Billy Markus and Jackson Palmer started Dogecoin to mock Bitcoin and the cryptos in general. According to them, though the blockchain is a fantastic technology, cryptocurrency is an absurd idea. For this reason, many in the crypto community don’t like Dogecoin. They believe Dogecoin was started as a joke and should be treated as such. Many in the crypto community actively avoid this crypto.