- Binance announced that they had listed Dogecoin on their platform
- The altcoin shot up 35 percent soon after its listing on Binance
- Dogecoin, an open source digital currency, has been endorsed by key industry leaders in the recent past
On July 5, 2019, Binance announced that it would list Dogecoin (DOGE) on its platform. Dogecoin trading pairs will include DOGE/BNB, DOGE/BTC, DOGE/USDT, DOGE/PAX, and DOGE/USDC. In less than 24 hours after the announcement, DOGE price shot up by an incredible 35.14 percent.
Dogecoin Making Honourable Appearances
Did Vitalik have anything to do with Dogecoin listing on Binance? It turns out that this announcement came at a backdrop of Ethereum founder, Vitalik Buterin, expressing his love for Dogecoin through a tweet. He was responding to a question by a Dogecoin supporter who wanted to find out his take on the same where Buterin responded with “I’m very pro-Dogecoin.”
I'm very pro-Dogecoin.
— Vitalik Non-giver of Ether (@VitalikButerin) July 4, 2019
Following the listing, Dogecoin’s 24-hour trading volume significantly increased from $36,433,330 on Thursday to $104,215,753 as of Friday July 5, 2019. Dogecoin’s market cap also shot up from $338 million to the current $519 million making it the 27th largest cryptocurrency on the market.
Recently, Dogecoin seems to be featured in the news for all the right reasons. From endorsements by industry leaders including Elon Musk and John McAfee and now Vitalik Buterin, it is undoubtedly heading in the right direction. What started as a joke (the famous Shiba-Inu “Doge” meme) has indeed grown exponentially to now becoming a reliable cryptocurrency listed with the most significant exchange, Binance, and with a market cap of over $500 million.
Here is an in-depth review.
What is Dogecoin?
Dogecoin is an open-source, peer-to-peer digital currency created in 2013 by Billy Markus in Oregon. As mentioned earlier, the coin started as a joke, i.e., the developers had no goal of competing with anyone. In fact, the coin was designed as a satirical response to some of the ridiculous altcoins that were being released in the market at that time. The developers named the coin Dogecoin after the famous Shiba-Inu dog “Doggo” meme that was trending on social media platforms at the time.
Following its release, Dogecoin gained traction in the hugely competitive cryptocurrency sector. This was all thanks to users who shared the digital currency by posting memes about the coin on their social media pages. The hype soon attracted a whole lot of internet communities and thousands of users, leading to a steep increase in its market value as well as the number of users.
Apart from the idea of being released as a joke, Dogecoin was designed to be a possible replacement to bitcoin offering more accessible, usable, and user-friendly transactions. It was targeted to be used by content creators as a means of tipping on social media platforms, including Reddit and Telegram.
The Technology Behind Dogecoin
Despite its humble beginnings, Dogecoin is a very serious platform with high-end technology underlying it. In fact, the technology behind Dogecoin has been ranked among the top fifty cryptocurrencies. The technology is a fork of Lyckycoin, a fork of Litecoin which, in turn, is a fork of Bitcoin.
Dogecoin employs a protocol referred to as the Scrypt algorithm that enables miners to process transactions and build blocks. Scrypt design expresses features that produce faster transactions ideal for miners. In case you missed it in our LTC guide, you should know that Litecoin also uses Scrypt algorithm, since it is also more accessible.
Unlike bitcoin where blocks close after every 10 minutes, blocks on the Dogecoin network are closed after every one minute. This means that Dogecoin blockchain achieves nine times more transaction than what bitcoin attains in every 10 minutes. With such an incredible transaction speed, Dogecoin is not only efficient but also very secure against double-spending attacks. The time of the attack is only limited to 1 minute, making it impossible for cyber perps to launch an attack.
Also, contrary to bitcoin consensus, Dogecoin has seemingly an infinite token supply which ensures that highly-priced tokens will never inhibit its ecosystem development.
How does Dogecoin Work?
Dogecoin functions under two primary algorithms – Scrypt, which consist of a set of hash functions and SHA-256. Basically, Dogecoin is based on the Bitcoin Blockchain technology and employs Litecoin’s underlying technology to enhance its capacity to generate blocks.
It’s possible to mine Dogecoin through the validation of transactions made within the system. However, unlike bitcoin, which uses the SHA-256 hash algorithm for mining, Dogecoin leverages a traditional mining system that is based on the Scrypt algorithm-similar to Litecoin’s mining system. With the Scrypt algorithm, miners don’t have to invest in expensive mining machinery, making it a little bit more economical. Miners can resolve a lot of transaction blocks per minute hence allowing them to mine plenty of DOGE.
Dogecoin Price Movements Review
Since its release in 2018, Dogecoin has seen both a bullish and bearish price trend just like the major cryptos in the market. For all of 2018, Dogecoin was on a downtrend with the price decline of March, July and September falling along with the market. However, from the beginning of 2019 all through April, Dogecoin was on an uptrend and even recovered from the BEARing effects faster than BTC.
Cryptocurrency market movements usually determine the price of crypto, and DOGE is no different. Predicting its price course is, therefore, challenging, especially if you are looking to get long term forecasting. Nonetheless, with the recent happenings, there is certainly a bearish forecast on its future price.
Trading Tip: Dogecoin’s meager transaction fees has attracted many users. Well, from that point in case, the low transaction fees grooms Dogecoin as the ideal alternative to withdrawing money from cryptocurrency exchanges which charge ridiculously high transaction fees.
The Future of Dogecoin: Should you Invest in Dogecoin?
Following the recent listing of Dogecoin on Binance exchange which has spiked its coin price seems to be a decent place for the project to exert some dominance in the crypto market. Already, Dogecoin offers faster transaction speeds complemented with lower transaction fees than Bitcoin and Litecoin. Such perquisites position it on a promising path that may see it as one the leading cryptos used in online transactions which will definitely steroid-boost its market cap and price to greater heights.
Evidently, it can be said that Dogecoin cares about its ecosystem because if that’s not the case, then why would they impose very low transactional fees? For that matter, its community has been growing and very active as evidenced by the number of transactions. How is this good news for the project? Well, if you have done your homework on what drives the price of crypto, you will notice adoption (its community) of a particular coin is the main component that influences its price. Therefore, with a community as active as Dogecoin’s (more aggressive than the communities of its competitors), its market price has nowhere else to go but up.
Dogecoin was a Sleeping Giant at First
Initially, before receiving high critical acclaim from tweets by Elon Musk, Vitalik Buterin or now this news about its listing on Binance, Dogecoin was not very responsive to media occurrences. For instance, the news that Airbnb could be rented with DOGE, took around three days before that news ignited some sparks to its price.
The recent notable mishaps of Dogecoin was when it was removed from the Exodus wallet due to lack of development and missing essential updates. That was a maybe-big deal which painted a bad picture to the project’s reputation and almost deterred the coin’s progress.
All in all, Dogecoin now seems to have attained the high status of acceptance from the broader cryptocurrency community, and the Binance founder, Changpeng Zhao, listing DOGE is another way of him saying that he sees a huge potential of this project.
Some of the factors that could compromise the price progression of Dogecoin include:
- Lack of widespread acceptance – which can be handled with a couple of more listings on reputable exchanges globally
- High competition – which is inevitable in the crypto market but can be tackled by incorporating more innovative ideas in the project
- An infinite supply – which may create a negative ratio of supply and demand
- Last, lack of ongoing development – which should be fixed, especially since that’s the reason why DOGE was removed from Exodus wallet
But then, the cryptoverse is hugely dynamic, and anything can happen at any time.
Despite starting as a joke, Dogecoin has strongly established itself as one of the best coins in the market thanks to its extremely low transaction fees and fast transaction speed. It can not only be used as a tipping platform but can also be used to pay for goods and services. While it may be difficult to predict the future price of a cryptocurrency, the just seen hike in market price sends out a positive message depicting a continuous bullish trend.
Note: Make sure you conduct your own comprehensive research of Dogecoin before you make up your mind to invest in the project.