Dogecoin lately it’s been talked about a lot as many people know crypto. Crypto currency or cryptocurrency it is very popular in the community. No wonder cryptocurrencies have finally emerged.
According to Statista data, in 2013 there were 66 cryptocurrencies and increasing over time. Even in February 2021, eyes cryptocurrency circulating have reached 4,501 types. A very drastic increase.
Although the number and variety are very large, the Commodity Futures Trading Regulatory Agency or CoFTRA has only licensed 229 types of crypto currencies in Indonesia. Several types of cryptocurrencies that are popular in Indonesia include: Bitcoin, Ethereum, Tether, Polkadot, Litercoin, dan Dogecoin.
What is Dogecoin?
Dogecoin is one of the digital currencies or cryptocurrency. This digital currency was originally just a joke. Written by Forebet, this Dogecoin was created by software engineers named Billy Marcus and Jackson Palmer in late 2013.
Palmer stated that at first he deliberately used the wrong spelling and used an image of a dog of the Japanese Shiba Inu breed. Pat White, CEO of Bitwave stated that the digital currency Dogecoin was originally only created to really make fun of other digital currencies, namely Bitcoin.
This digital currency community and enthusiasts are increasing the prestige of the Dogecoin currency by means of charity. Many of them are raising funds from this cryptocurrency for the benefit of many people. For example, crypto money is used to finance teams bobsleigh Jamaica to the 2014 Olympics and sponsored NASCAR drivers.
In early 2021, Degocoin gained cult status because in a WallStreetBets chat on Reddir, fans of the digital currency pledged to push the cryptocurrency’s price up further. At the beginning of this year the figure even reached more than five thousand percent.
Elon Musk is one of the famous figures who became the main reinforcer. The Tesla auto company boss mentioned Dogecoin as a currency crypto his favorite. In 2021, the highest value of the Dogecoin currency was on April 16, which reached US $ 0.45 per coin after previously only reaching a value ranging from US $ 0.16 to US $ 0.3 per coin.
Weaknesses and Advantages of Dogecoin
Dogecoin also has advantages and disadvantages just like any other digital currency. One of the drawbacks of Dogecoin is that it is volatile. The change in question is a change in its value, it could be that today the value of Dogecoin rose dramatically but for one reason or another the next day the value of the digital currency fell very deeply.
Meanwhile, for the advantages of this currency is the number of coins produced is not limited. Unlike other cryptocurrencies, which usually have a production limit, this Dogecoin does not. So those of you who want to have it don’t need to be afraid of running out.
How Dogecoin Works
As with other cryptocurrencies, Doge currency also works using technology blockchain. This technology is like a digital ledger that is distributed to all users to record transactions using this cryptocurrency.
The system is decentralized so that cryptocurrency owners get an identical copy of the book blockchain. This network uses cryptography to maintain security in transactions. People who save use computers to solve complex mathematical equations for all transactions and record them on blockchain.
In return, those money savers will get crypto which they can store or sell on the open market, for example in the Dogecoin market if they hold this type of cryptocurrency.
Dogecoin can be used for payment and purchase transactions. However, its presence is considered less effective as a store of value. This is because the number of digital currencies that can be added has no limit. Or in other words, this cryptocurrency is very speculative.
Blockchain will reward miners for their hard work by creating millions of this currency every day. This is also what makes the price of Dogecoin quickly change in the market.
3 Important Things Before Buying Dogecoin
Many people are finding out about this currency, and are interested in owning it. But before buying crypto money there are several things that you should pay attention to first, including;
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Beware it’s just a bubble
There’s nothing wrong with being “suspicious” or wary of an up-and-coming trend. The price, which can rise quickly, turned out to be one that deserves suspicion. Make sure you’re sure it’s not just a bubble.
The meaning of the bubble is that its value is speculative. This value occurs if the price is very high in the market. The thing to realize is, the value of Dogecoin will not always go up. Like other financial instruments, its value can go down if there is market sentiment.
To anticipate losses, you must learn the science first. You can learn through many media. Currently, there are many webinars or the like that explain the science of this digital currency.
FOMO or Fear of Missing Out aka just following the trend is the next thing you should avoid. If you want to buy Dogecoin, make sure you buy because you already know the science, not because others follow. It is very risky if you invest simply because you are following others, but do not know the fundamental value.
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Not sure of the true value
The next thing you should realize is that the true value of Dogecoin is uncertain. The increase is not necessarily the actual value or only speculative. Bruce Mizrach a professor of economics from the Rutgers School of Arts and Sciences stated that understanding the fundamental value of digital assets is not easy, it can be said to be very complicated.
Unlike stocks, you can find out the ratio of price to income that will be obtained. But because cryptocurrency This is relatively new, there are still many people who are confused about the system in this digital currency.
Therefore, it would be nice as a beginner you can go slowly when you want to invest in this digital currency while learning the ins and outs of Dogecoin starting from the fundamental value, how to buy, profit and loss, and other things related to this currency.
Is Dogecoin Profitable for Investment?
The question of whether investing using Dogecoin is profitable is often raised. Talking about investing, we will remember about long-term financial goals. Therefore, before investing, you must take into account everything, especially the fundamental value of the investment instrument.
According to analysts, this advantage of Dogecoin may not be sustainable in the long term. There are no restrictions on this digital currency making it less attractive in the long run. A constant or predictable flow of new coins will only put downward pressure on them.
In addition, the absence of a strong Dogecoin mining community puts its existence in doubt. In simple terms, investing using Degocoin currency is very risky or is included in the high risk category.
Forbes wrote an appeal that you do not put all your money into this investment instrument. If you really want to invest here, you can start with the smallest nominal first. And what is no less important is to learn correctly all things related to this digital currency.
Because if you ignore it, it is possible that you will experience a lot of losses. Even Warren Buffett, a professional investor, always says that cryptocurrency is a bad investment. At the 2018 annual meeting, reported by Express.co.uk, the founder of Berkshire Hathaway said that cryptocurrencies are dangerous rat poison.
It must be admitted that cryptocurrency it still raises many pros and cons. Those who are pro with crypto money think that this cryptocurrency is more protected from inflation, the transaction costs are cheap, practical, and also fast, flexible or have no affiliation with banks, and have clear advantages.
Meanwhile, the contra argue that cryptocurrency has very high fluctuations in value, does not have specific rules governing temporary trading stops, and does not have any underlying assets or assets underlying asset, and has no legality from the central bank.
Although it raises many pros and cons, in fact crypto money is already quite popular among the public. In Indonesia alone in the second quarter of 2019, crypto money owners have reached 10 percent, and currently along with the increasing popularity of cryptocurrency it’s definitely increasing in value.
In 2019, Indonesia was ranked fifth in the world as a country where people have large amounts of digital money. However, the owners of the digital money have not used it to buy goods or services. This is because many sellers are reluctant to accept the money as its value is uncertain.
That’s the review about Dogecoin What you need to know before deciding to buy one. Learn in full so you don’t lose money when you want to invest in this digital currency.
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