When Dogecoin was first released there were a lot of skeptics, including us admittedly. But there’s an essential truth to be told that Dogecoin’s critics aren’t facing up to.
Dogecoin is no less viable than Litecoin
That’s right, I said it. To the Litecoin fans that one is going to hurt.
Cryptocurrency is a new ecosystem and although Bitcoin has always been regarded as the ‘apex coin’ Litecoin has always been seen as the runner up. But the world of cryptocurrency is too new and too competitive to remain on the winner’s podium because you’ve always been there, and Litecoin has done very little lately to justify its position.
As Bitcoin has slowly expanded its root system into the mainstream with advances in payment processing, and adoption by companies like Overstock and Tigerdirect, Litecoin has done almost nothing to keep up. Sure, it has a few more mining pools, and is accepted on a couple more exchanges, but like I mentioned previously, these are just consolation prizes it has received for always being number two. Meanwhile, as Litecoin is lazily enjoying its undeserved admiration, Dogecoin is sending the Jamaican Bobsled team to the Olympics, along with three other Indian athletes. So what really makes Litecoin better than Dogecoin?
Nothing. That’s the truth of it. Dogecoin is a Litecoin clone with an adorable Shibe mascot, and that may be all it needs to take the number two spot. Dogecoin is like one of the joke ideas you have with your friends and then find out a month later someone actually turned into a real marketable idea; it’s subtle genius tucked away in a ridiculous meme that some people don’t even find funny for some reason.
What makes Dogecoin special?
Never underestimate the power of a meme. Dogecoin has managed to take something as esoteric as cryptocurrency and made it approachable to the public at large. If you want proof of the power of the Doge, do an experiment; talk to someone who knows very little about cryptocurrency, show them a picture of Dogecoin, and a picture of Litcoin then ask them which one they would buy. I did this with a few friends and family members and all of them so far went for the Shibe. This is the power of Dogecoin and the market has responded. As of January 31st, 2014, Dogecoin has taken the 6th highest total market cap of all the cryptocurrencies according to CoinMarketCap, and I don’t think it’s going to stop there.
But What About the Pump and Dump?
There is some truth that Dogecoin owes a lot of its current value to a pump that began sometime in mid January. But I would argue that clever pump and dumpers target coins for a reason. The most significant ‘pumps’ almost always occur on currencies with significant potential anyway. I remember in my early days of trading cryptocurrency a popular pumper called Fontas would regularly pump Litecoin. At the time Litecoin was trading at about 1.5 USD, as of today it’s 21.1 USD. I’ve talked to a few pumpers and I imagine their choices are made based on two main factors:
1.) Coins with that are attracting a lot of attention are easier to pump because many traders actively watching them anyway.
2.) Coins that have a lot of potential pose less risk to the pumper.
I wouldn’t say Dogecoin is the future of cryptocurrency but than again I can’t say it isn’t. I can say one thing for certain though– Dogecoin is attracting a demographic of users that neither Bitcoin or Litecoin could get the attention of, and at least in the short term that makes Dogecoin worthy of its spot at number six in the coin market cap.