Crypto check: Looking Beyond the Dogecoin Hype

by mehekkaoberoi

Background:-

  • What does a Crypto currency means? A cryptocurrency is a type of currency which uses digital files as money. Usually, the files are created using the same methods as cryptography (the science of hiding information).

  • The Crypto currency has attracted a lot of attention due to its Surge like Bitcoin which was 0.04 Paisa in 2009 is currently at 40,00,000 Rs Approx. After Bitcoin there is a new comer which has rose over 5000% in 2021 of which 400% gain was in just 30 days that is the Dogecoin, which features the face of the shiba inu dog from the Doge Meme as its logo and namesake.

These Surges have attracted a lot of investors to invest in them. Dogecoin was created back in 2013 by Jackson Palmer and Billy Markus as a joke inspired by the meme dog, Shiba Inu , they just wanted their investors to be the one who invests without any technical analysis or performances and that is what has happened . Last year the Dogecoin was at 0.2 Paisa but now its trading at 40 Rs.

Linkages:-

  • Why there is a surge in Crypto Happening? Why Dogecoin drastically surged? What influenced them?
    Before Dogecoin , Bitcoin also touched a high was in trend , we can understand that about Bitcoin as bitcoin is the original blockchain proof-of-concept but Dogecoin was created for fun with no puropose.
  • But what is a Proof of Concept in Blockchain? Simply put, the blockchain PoC is the process of verifying that the idea has the potential in a real-world situation. Its aim is to determine whether the project is feasible and will function as planned. Bitcoin came into being in 2008 as the first application of Blockchain technology. Dogecoin is a cryptocurrency, a form of digital money that, much like bitcoin, enables peer-to-peer transactions across a decentralized network. And what differs them is this Concept of Proof of Blockchain.
  • The drivers of Bitcoin and Dogecoin

    Cryptocurrencies derive much of their value from the underlying project it is attached to, Most cryptocurrencies are associated with a project on the blockchain network trying to solve real-world problems
  •  As these projects prove their efficiency and gain popularity, it channels its value to the native token of the project, a cryptocurrency.
  •  Availability of Crypto currency is also an issue as There can only ever be 21 million Bitcoins, and while the supply for it is shrinking every day as more and more people invest in it, the demand for it is increasing.
     While Dogecoin, on the other hand, does not have any such limit on its supply, there can be infinite DOGE coins.
     Bitcoin underwent halving in May 2020, a phenomenon that reduces the supply of new Bitcoins in circulation ending up rallying its prices.
  •  A bitcoin halving (sometimes ‘halvening’) is an event where the reward for mining new blocks is halved, meaning miners receive 50% fewer bitcoins for verifying transactions. Bitcoin halvings are scheduled to occur once every 210,000 blocks – roughly every four years – until the maximum supply of 21 million bitcoins has been generated by the network.
    On the other hand Doge Coins got attention due to GameStop incident , where all the gamers on reddit decided to raise the price of bitcoin to 1$ which created the hype for Doge coin due to its Meme pic and low price as compared to other Crypto Bitcoin
  • Celebs like Elon Musk, Gene Simmons, Carole Baskin etc., influenced Crypto like Bitcoin , Doge on Twitter

Current Scenario:-

  •  Currently Doge coin is In Hype and has created hype for many rookie investors to invest in Crypto as Bictoin backed Crypto indirectly
     
  • Many New investors are investing in crypto easily like stocks using Apps like kuber coinswitch, WazirX etc.
  • The study is similar to stocks so its not complicated to invest in Crypto
    Many Big Names have given a warning about not investing too much in Doge or Crypto as they are volatile in Nature plus Doge doen’t have a purpose and it has risen just because of a Hype created by some
  • Recently Tesla Bouth 1.5 Billion $ worth of Bitcoins which surged bitcoin to grow to a all time high
     Recently the tweet of Elon Musk about Doge made Doge go up
     After some time Doge Coin came down to as low as 5 Rs but also it rosed to 40 Rs after some days so it is volatile
  •  Many Apps promote to buy from a low Amt of investment as low as 100 Rs and people can buy proportions of Crypto unlike shares
    Cryptocurrency is promising, but please invest with caution! Tweets Elon Musk even after investing a lot himself

Impact:-

  • Many Investors are getting attracted as we can invest with an amount as low as Rs 100
  • Those who are a long term investors in Crypto has gained more than anyone
  • The Tweets of Powerful People like Elon Musk Impacts that things on a positive side as when he kept Bitcoin as his Twitter bio it surged 20%
  • To Prove the liquidity of Bitcoin he sold 10 % of 1.5 Billion $ Bitcoins with in no time to show some cash balance in his Balance Sheet which he
  • purchased which caused to rose it to even an all time high
  • Small Investors have gained due to Crypto
  • Just as Positive tweets are resulting them to go up they can also fall down due to a negative news or tweet
  •  In India Binance-owned WazirX’s Doge/INR trading slowed its system as the platform saw record traffic that it did not have the capacity to
  • support.
  • Many Started to Provide Billing payment as Bitcoins when Tesla announced that they will accept Bitcoin as Form of Payment

Content contributed by – Abhijeet Dhakane

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