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Elon Musk exerts a strong influence on the field of cryptocurrencies: all it takes is a tweet to see the price of one of them rise or, on the contrary, collapse. It was by making a joke last May on the set of Saturday Night Live that the CEO of Tesla brought down the price of Dogecoin. Appeared somewhat by chance, this virtual currency is gaining more and more followers around the world. So, does it make sense to invest in Dogecoin?
What is Dogecoin?
Dogecoin is a cryptocurrency created in 2013 by two engineers, an American and an Australian. Their original idea? Invent a crazy currency for Internet users, which would be unlike any other network on the market. The name comes from a Shiba Inu known on the Internet to appear in humorous pictures. The logo of the currency is also in the effigy of this dog. While the basic concept sounds more like a joke than a serious concept, Dogecoin quickly gathered a community of fans around him and his mascot. The official site reached one million visitors in the first month of its creation and its popularity has continued to climb thanks to an increased media presence. So, ready to add Dogecoin to your coinbase wallet with this article?
How does it work?
This digital currency is associated with small amounts and is used mainly in the context of microtransactions (giving tips online, financing good deeds, buying an application, etc.). For example, the community succeeded in participating in the construction of a well in Kenya. As with Bitcoin, the Dogecoin network works using two processes: mining and the blockchain system. However, Dogecoin does not have a defined limit on the number of tokens in circulation (Bitcoin has a cap of 21 million).
Should we consider Dogecoin as a reliable investment?
One of a kind, Dogecoin is getting a lot of attention. But should we bet on it for all that? Elon Musk is a big part of his popularity: he inspires fans to invest, which in turn explodes or, conversely, plummets his value. A drop of 30% was observed in a few minutes after his intervention in the American show. It is therefore an extremely risky investment. The weak point of Dogecoin lies in the fact that it ultimately has few investors, who can decide to sell everything overnight.