The 37th ranked cryptocurrency with a market cap of $870m, is based on a meme. It was ranked equal to Ripple in the Weiss ratings. The question is, is this justified?
1 – Does the currency work as a currency?
It functions as a rudimentary currency. It was a clone of Litecoin, a top ten cryptocurrency but has not had many updates since. However it is actually used more as a currency than bitcoin is and not just in terms of volume. It’s supporters jokingly post that 1 Doge = 1 Doge. The purpose of this is to forget about trading it and comparing it to USD but simply to use it.
2 – Does it have a function?
Dogecoin is used as an alternative to Bitcoin when transferring money, to buy actual items and to tip other users. It is commonly used as a tipping mechanism within the community to reward interesting posts. Through this it can be seen as one of the first kinds of community or in-house coins. By this I’m referring to widely known coins such as Tron (TRX) which is used for gaming or Kin (KIN) which will be used within the KIK messaging app.
For cryptocurrencies to replace fiat currencies, they must be used. Bitcoin has recently rebranded itself as a store of value which points towards the trend of coin owners holding their coins hoping for an increase in value. If this continues to happen, cryptocurrencies will struggle to achieve real-world adoption as there won’t be any point if the coins are not being spent. In this sense, the users of Dogecoin are taking the hit of losing out on a possible increase of value in order to actively promote the adoption of cryptocurrencies into the mainstream.
3. Is there anything more to the coin?
A lot of cryptocurrencies have been purchased in the hope of an increase in value. However the users of Dogecoin are not only tipping each other with their coins but are also donating their coins to various causes. Right now they are fundraising towards preventing Malaria and every month they donate towards buying socks for the homeless in Skid Row, LA. As we move towards a cashless society and people are carrying less change on them, the homeless are going to receive less money. As the community is encouraging these donations, it’s more likely that someone will contribute within their daily life as opposed to deciding, on their own accord, to visit a charity website.
Dogecoin may not be the end goal of cryptocurrencies or something that will solve bank liquidity issues but it is a positive step in the right direction. This coin and its followers are doing a huge amount for the crypto community. This is not one for investment, this is one to be used.