Should you buy Dogecoin in 2022? Explore 5 Pros and Cons

Dogecoin

Dogecoin Since its inception, it has been spoken in the city because of its comical nature.

Dogecoin, also known as DOGE, is one of the most profitable cryptocurrencies on the cryptocurrency market. It was founded in 2013 by Billy Marker and Jackson Palmer. Its creation was hilarious as it was created as part of a joke from a meme featuring the Japanese Shiba Inu dog breed. Later, DOGE gained popularity and started attracting real crypto traders as long term investments. According to coinmarketcap, it has a current market cap of $ 23.37 billion and is the 11th largest cryptocurrency on the market. The popularity of this meme-inspired and somewhat satirical cryptocurrency boils down to massive appeal. Among the thousands of cryptocurrencies and tokens, DOGE seems less intimidating and more affordable. Dogecoin is one of the best speculative cryptocurrencies that has been making headlines lately. But those headlines have boosted the numbers in recent years. What will become of Dogecoin’s value in 2022 is not yet clear. So, we have listed 5 pros and cons of Dogecoin for readers to analyze their investment strategies for DOGE.

pros

Growing community of owners: One of the main advantages of dogecoin is that it has a growing community of holders and supporters. Cuban and Mark once stated that its growing user community makes it a suitable medium of exchange. One of the main reasons for its growing community support is that investors are using it as absolute value. These investors are also very active on social media and share crypto-based memes as part of their promotion.

Decentralized Exchange Compatibility: DOGE can be made and sold on decentralized exchanges. In particular, the Ren project allowed him to run on the Ethereum blockchain platform as well as gain access to the decentralized financial network. This indicates that DOGE is compatible with the emerging decentralized finance movement in the crypto market.

Easy transaction: Dogecoin shares several similarities with BTC, which means that it provides certain benefits similar to Bitcoin. Crypto coding is also very similar to Bitcoin, making it safe and easy to transact. Also, there are no mining restrictions for Dogecoin. This gives investors unlimited ability to trade Dogecoin, whether it is a short or long term investment.

DOGE listing on the stock exchange: Since its inception, some of the best exchange and crypto exchange platforms have had Dogecoin quotes, including eToro, which is one of the largest international cryptocurrency brokers. The eToro listing has significantly raised the client’s requirements for Dogecoin trading. The platform is also associated with increased traffic from clients who want to trade DOGE.

Dogecoin unique market positioning: DOGE’s inflationary status, unique mining feature, and Litecoin connection are considered unique by several investors. But since it was one of the early adopters of the cryptocurrency, the Dogecoin mining model is based on proof of work, which means that complex computational problems must be solved in order to validate transactions on the blockchain.

Minuses

Has no supply capitalization: The lack of supply cap is one of the biggest disadvantages of Dogecoin. This is due to the fact that cryptocurrencies with no supply limit are not an ideal asset to protect against inflation. Also, endless DOGE mining will eventually require more extensive blockchain mining activities. And because it uses a proof-of-work mechanism, it will continue to expand its miner pool and number of computers to support the ever-increasing growth of transactions.

Fun nature can contradict true innovation: DOGE was originally designed to play around with existing coins like Bitcoin and Litecoin. This nature hinders the integration and adoption of DOGE as a digital asset.

Poor technical support: Dogecoin has relatively weak technical support despite its growing community of users and supporters. The DOGE development team is not as big as Bitcoin, Ethereum, and Cardano. Also, since 2015, there have been no technology updates or changes compared to DOGE. It is also important to highlight the fact that the company does not offer any unique selling points in terms of technology.

Relationship with pump and blade diagrams: Pumping and dumping schemes have been around for a long time. While this is prohibited on regulated crypto exchanges, it does affect some cryptocurrencies. Pumping is when a group of people buys a large number of coins, which significantly increases the price of an asset. Once the coin reaches a higher value than what they were bought for, they transfer the assets to other buyers and make huge profits. This manipulation is fairly common in DOGE.

It is not the best transactional currency: Unlike other currencies like Tronic and Ether, which function as a transactional currency, Dogecoin can only be used as a digital currency. Cryptocurrencies like Bitcoin, Litecoin, Dash and Bitcoin Cash have more transactional value in the market than DOGE.

DOGE introduced crypto millionaires and billionaires to the technologies of the future, the existence of which they did not know existed. But despite his accomplishments, investors should always test the water before trading currencies like Dogecoin.

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