Does it have value or is it just a meme coin? Why does Elon keep tweeting about it? Is the price going to keep going up? What does it even do? Let's discuss below:
History: Dogecoin was launched in 2013 seemingly as a joke with a Shibu Ina dog as the logo on the coin. Founded by Jackson Palmer, a product manager at Adobe, and Billy Markus. They created Dogecoin in as a way to satirize the hype surrounding cryptocurrencies. Palmer has been described as a "skeptic-analytic" observer of the emerging technology, and his initial tweets about his new cryptocurrency venture were done with irony. Fast forward to day and while it has become a large meme status coin, Dogecoin's blockchain still has merit. Its underlying technology is actually derived from Litecoin. It shares similar features such as using a scripting algorithm, low price and unlimited supply. The unlimited supply, relative to bitcoin's fixed supply, is what keeps the price so low.
Price Appreciation: So if its half joke-half real, why is it going up in price. It is mainly due to three reasons: 1) Celebrity hype 2) Speculation and 3) The ease of mining. Let's discuss these three in more detail
Celebrity Hype: While we're sure people like Elon, Snoop Dog, Mark Cuban and others own the cryptocurrency, the support (mostly as a joke) as led to actual adoption and buying of the coin. What we've seen in both crypto and stocks is that when people like Elon tweet out there buying something, the rest of the world follows suit. If you look back at his tweets regarding any viability of the coin, you'll see spikes in pricing at each moment.
Speculation: Led by retail investors, the low price point attracts people who think the price can spike at any moment. Although price is not an actual indicator of value (market cap is) many people are looking past this as the coin at one point cost less than a penny. This has led to mass amounts of demand of the currency, thereby driving up the value of each coin. Factor in the memes and the reddit community behind it, and the coin keeps going up and up!
Mining: With a hash rate close, but less than that of Litecoin, miners are incentivized to mine the coin. With more miners approving transactions and making money, this also leads to more people piling in investment. Looking at the chart above we can see that the reward for mining keeps increasing, creating a network affect of more miners and subsequently more investors, keeping the cycle going and going.
Is the price going to keep going up: No one truly knows and anyone telling you otherwise is full of $!#%. While yes the hype is real, no one knows when the train will stop (if it ever does). If you're going to get in, just make sure you know when you're going to get out. If not, HODL for dear life!