Created in 2013 as a satirical currency, Dogecoin has since moved from being a joke, to a serious crypto contender, to a joke again, and then to where it lives now as a tipping themed currency with an extremely enthusiastic community supporting it.
In recent days, Dogecoins have seen a jump in price from $.001 to over one cent, at 10-fold increase over the span of about two weeks. What is driving this price hike, and what is the future of this “just for fun“ cryptocurrency.?
The Origins of Dogecoin
Years ago, the cryptocurrency world suddenly saw an explosion of new assets and blockchains. When compared to today’s rate of expansion, the amount of new tokens back then was comparatively small. However, the flow was fast enough to encourage creator Jackson Palmer to make a new cryptocurrency just to be satirical.
In a recent video posted to YouTube, Palmer said Dogecoin was “a jab at the crazy price speculation and markets of crypto“.
A Friendly Way to Get Into Crypto
Image Source: /u/huntercn on Dogecoin Subreddit
One major stumbling block that new users of cryptocurrency find themselves facing is the sheer difficulty of finding simple to follow information that doesn’t require pre-requisite knowledge.
Additionally, many cryptocurrency communities, especially those that are well-established and have been around for many years, can often be very toxic or hostile to new users asking seemingly simple questions.
These questions usually include where to buy it, how to mine it, how to store it and keep it secure, and so on.
The community that supports Dogecoin, especially on Reddit, is famous for its patience, friendliness, and willingness to help new users. As a result, over the last few years, many new users have gotten their feet wet in cryptocurrency by using Dogecoin in some form or other.
Additionally, due to it’s very low fees, members of the Reddit community will sometimes give Dogecoin tips to new users using what’s known as a tip bot.
What’s Behind the Pump?
Image Source: /u/KharaAlek on Dogecoin Subreddit
In the same video referenced above, Dogecoin creator Jackson Palmer hypothesizes that the reason for the sudden ten-fold price increase is due to market manipulation, and pump and dump schemes.
Palmer suggests that pump groups exist on chat platforms like Telegram and they orchestrate these schemes using trading bots to artificially increase prices before selling off their holdings at a large profit. Palmer suggests that these groups are likely from Asia, which has market regulations and legal frameworks that are either not sufficiently enforced, or simply don’t exist.
As this price increase is “an orchestrated pump”, when the pump is finished and the perpetrators have all sold their gains, then the currency “ will likely crash back down“ according to Palmer.
Further, Palmer suggests to those interested in Dogecoin that they refrain from buying any now as the market is, in his words, “likely manipulated”.
Dogecoin to the Moon?
Dogecoin has a very unique position in the cryptocurrency world, seeing as it came from a joke to a now $1 billion market. It is largely a result of its fervent community support, and impending updates to its core to include processes such as Segregated Witness (SegWit), that it’s safe to say that Dogecoins will be around for some time.
However, it is unlikely that something like Dogecoin would see mass and adoption across the world in the same way that bitcoin or Ethereum are seeing today. The technology and the commuinity is there, and nothing is impossible.
Perhaps one day we will see Dogecoin “moon“ once and for all.