Should you invest in Dogecoin? Expert Suggests Staying Away From Controversial Cryptocurrency Market – CBS Atlanta – Atlanta, Georgia
(((CBS Detroit) – Dogecoin that started out as a joke is now real money. At least it’s worth the real money. The exact amount of money actually varies from day to day or even within a day. Cryptocurrencies started in 2021 and are worth a penny, peaking at $ 0.74 a few weeks ago. It is currently the sixth largest cryptocurrency in terms of market capitalization (the market value of all available Dogecoins) and ended at $ 0.31 on Sunday. Trading on most days is quite volatile.
What is Dogecoin?
Dogecoin is a type of cryptocurrency. According to David Kirsch, Associate Professor of Management and Entrepreneurship at the University of Maryland’s Robert H. Smith Business School, “Cryptocurrencies are basically a piece of software that is controlled or defined by algorithms. The function determines the value of the owner of the code. There is a legal currency, then a mathematical currency. The state determines something in legal currency and places it on this token, this shell or a piece of paper. Says it’s worth it. And cryptocurrencies are basically another way of establishing valuables that can be exchanged electronically. “
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“That creates value,” continues Kirsch. “People are confident that they can use small pieces of software to establish their property and trade it for something of value with someone else. It’s kind of a thing. [a] A standardized way to exchange this code. It’s exclusive and difficult to duplicate and protect. “
Especially for the Dogecoin website, we describe it as an “open source peer-to-peer digital currency”. Like Bitcoin, Ethereum and many other cryptocurrencies, Dogecoin is supported by an online community of people who can use it to pay for things in the online world. Most physical stores don’t accept it as payment. But in March Dallas Mavericks started accepting tickets and products. Recently used to buy some land in Rhode Island. And Geometric Energy Corporation we’re paying for SpaceX, a company owned by Elon Musk, in cryptocurrency and launching a satellite on the moon.
Of course, Dogecoin holders can redeem dollars in the open market and buy things with them. And the wider community of investors (or speculators) sees it as an opportunity to build wealth. As a speculative tool, it seems to be the main purpose.
“Most cryptocurrencies are relatively limited as exchange currencies,” said Kirsch. “Some people see them as valuable business, as a kind of investment vehicle to maintain value.”
The volatility makes all cryptocurrencies a dangerous place to save money. When the value of Dogecoin drops sharply, the exchangeable dollars drop significantly. Of course, the formula works the other way around, which makes it an attractive guessing option for at least some. To be more specific, let’s say someone spends $ 1,000 on Dogecoin when it costs a dime. These 100,000 Dogecoins are worth $ 31,000 as of Sunday. For example, let’s say someone spends $ 1,000 on Dogecoin in early May. It was worth $ 0.74 each. Those 1,351 Dogecoins are worth about $ 419 on Sunday.
Dogecoin suffers from another problem that many other cryptocurrencies do not. There is no limit to the number of Dogecoins that can exist. A potentially infinite supply means that individual coins can lose value as the total number of coins increases.
How does Dogecoin work?
Cryptocurrencies are executed in the so-called “blockchain” technology. This is essentially a digital transaction book to keep track of every currency change. The ledger is distributed. Each user has a complete and exact copy on different users’ computers. Due to the distributed and synchronized network, no single instance controls the data. That makes your digital transaction book safe.
Updates are frequent and require a lot of computing power for maintenance. This is where miners come in. A small process it executes a transaction and records it on a Dogecoin blockchain called the Dogechain. More importantly, their computers use specialized software to verify transactions by solving mathematical equations. The miner who processes the transaction fastest, the most computationally powerful miner, receives Dogecoin in return for his efforts.
Dogecoin trading app like Robin Hood.
Dogecoin is stored in your digital wallet. This wallet can be offered through a digital exchange such as Coinbase. It can also be an app on your mobile device or another hard drive. The coin is password protected.
How did Dogecoin get so popular?
Dogecoin Origins In 2013, everyone returned as a prank that everyone took seriously. According to the story, tech company marketing expert Jackson Palmer tweeted about a cryptocurrency called “Dogecoin”. Monologue in the dog). Given the cryptocurrency epidemic, tweets have received a lot of attention.
A software engineer named Billy Markus used the Bitcoin source code to compose the code for the Dogecoin cryptocurrency. And when he put it live, Dogecoin took off. It bounced off various internet threads and became popular on Reddit as a way of thanking people. The community has grown around cryptocurrencies and used them as a charitable method to create something better in the world. They supported the Jamaica Bobsleigh Team and several NASCAR drivers in 2014. But soon, the monetary value of Dogecoin became the main concern of the community.
Until the beginning of the year, prices didn’t even exceed a cent. In late January, popularity is boiling on Reddit, memebased cryptocurrencies jumped into the top 10 by market capitalization. Elon Musk showed support for Dogecoin trend-inspired tweets.
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– Elon Musk (@elonmusk) January 28, 2021
Snoop Dogg also took part in the conversation.
– Snoop Dogg (@SnoopDogg) February 6, 2021
Believers on Reddit’s WallStreetBets forum, which launched GameStop stock into the stratosphere, attempted to promote Dogecoin “on the moon”. Robin Hood, a popular trading app among young investors, has already enabled users to buy Dogecoin and other cryptocurrencies. But trading started in the first half of this year. Of 1.7 million customers in the fourth quarter of 2020, around 9.5 million customers traded cryptocurrencies in the app in the first quarter. An ongoing COVID pandemic can be one of the main reasons. As of January, many Americans have had a lot of cash available because they have fewer funds to spend and have had two stimulus checks. Personal savings rate 27.6% March 2021.
Prices skyrocketed when the internet talked about Dogecoin. Cryptocurrency trading has gotten very enthusiastic and the transaction app crashed in mid-April, then again in early May. Later that week, its market cap topped $ 88 billion. (For reference, the oil company BP’s market cap is approximately $ 88 billion.)
Dogecoin and other cryptocurrencies fell sharply in May. Musk called it “Hustle” “Saturday Night Live” didn’t help. But the millionaire who proposes Tesla can be accepted as a form of payment instead of Bitcoin. It pushed the price up a bit.
“Elon Musk is a visible whale,” said Kirsch. “We know these markets are full of invisible whales that are actively manipulating price fluctuations. This is not yet a mature financial market, but rather a small one. It tells me it’s a place where people get confused. “
Has the crypto bubble burst?
Cryptocurrency only lost around $ 1 billion due to market capitalization last Wednesday. It happened shortly after China, the world’s second largest economy, warned banks and companies not to trade digital currencies. Federal Reserve Board Chairman Jerome Powell recently warned of cryptocurrency risks. You must notify the IRS shortly for transactions worth $ 10,000 or more.
Does that mean the bubble is bursting?
There are many signs. The answer is yes .. As mentioned above, Bitcoin, Dogecoin, and other cryptocurrencies have very limited uses as currencies, at least in a legal sense. The major cryptocurrencies handle a small fraction of the transactions that Mastercard and Visa process, but their market value is higher than that of the two largest credit card companies. Anyone with a little programming knowledge can develop their own cryptocurrency. And anyone with a large enough Twitter megaphone can create or destroy billions of dollars with just a few tweets. The list continues.
But at least one bubble expert is less confident. “It’s hard to say that this is a bubble,” says co-author Kirsch. Bubbles and Crashes: Technological Boom and Bust .. “I have a feeling that the entire cryptocurrency market has been part of the history of speculation and alternative currencies from the beginning. My bubble theory is history, speculative subject, uncertainty, inexperienced investor. And over. And cryptocurrencies contain all four elements that are needed for a bubble. When I wrote a book about it, I had some of it in mind, this theory of bubbles. That’s what I mean. I looked at a number of technologies that financial speculation had and saw these factors act as general predictors for the bubble. In a way, cryptocurrencies are just that. Aside from being illegally used, the nature of the underlying purpose is not yet established. Therefore, cryptocurrencies, especially bitcoins, are intended for use and cyberattacks, drug trafficking and their activities. We know that it is very popular among the various activities that people want to do without being regulated by national authorities. It has far more potential than what we are currently seeing in the crypto market. What I find expensive is a reflection of the enthusiasts I see elsewhere in society when I get out of the pandemic. “
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It was originally released on Thursday, May 24th at 4:39 p.m. EST.
Should you invest in Dogecoin? Expert Suggests Staying Away From Controversial Cryptocurrency Market – CBS Atlanta Source Link Should You Invest In Dogecoin? Expert suggests staying away from the controversial cryptocurrency market – CBS Atlanta