What awaits Dogecoin (DOGE) cryptocurrency: problems, prospects, development vector
Dogecoin has become the central paradox of the crypto industry: created for the sake of a joke, memcoin eventually became a serious competitor to many well-known cryptocurrencies, such as:
A bit of history
On 6 December 2023, the first memcoin in history turned 10 years old. DOGE has developed a whole army of followers not only among users and investors but also among developers: Dogecoin has spawned an entire separate sector of meme cryptocurrencies, of which there are already more than 1300, and that's only those registered on CoinMarketCap.
Even though Dogecoin is not an original idea and was created just for the sake of a joke, it has been a resounding success from the beginning. In just 30 days after its launch in 2013, the original Dogecoin.com website had over a million visitors. Just imagine that this happened when not many people had heard of cryptocurrency.
In November 2023, the US National Telecommunications and Information Administration (NTIA) approved the first space mission called DOGE-1, which is fully paid for by the DOGE cryptocurrency. The mission will involve Geometric Energy, which developed DOGE-1, and SpaceX, which will deliver the 40kg satellite using a Falcon 9 rocket. Plans call for the satellite to orbit the moon and broadcast adverts via a screen mounted on it.
Also, in December 2023, another company, Astrobotic, which develops space robotics for lunar missions, plans to send a crypto wallet with the cryptocurrency Dogecoin. Thus, DOGE can become the first cryptocurrency in history to travel in space. It can only be surpassed by Bitcoin: in Q4 2023, LunarCrush planned to send a wallet with 62 bitcoins into space — this mission was called Nakamoto-1.
Dogecoin's problems
Dogecoin's first and foremost problem was its lack of innovation: its protocol is a fork of the Litecoin network, which is a fork of Bitcoin. The only key differences between Dogecoin and these two protocols are the shortened block mining time (just 1 minute) and the lack of a halving mechanism, which reduces the speed of issuing new coins.
However, this is only part of the problem, as the Dogecoin protocol has not been updated for several years, and developers are not developing the technology or offering any new features.
The lack of halving, meanwhile, has become the second major problem with the cryptocurrency, as Dogecoin is an inflationary coin that, on top of everything else, has a no-issuance ceiling. When writing, the total number of coins totalled 142.2 billion, and about 2.56 billion DOGE are generated yearly. However, note that there are technically several ways to limit Dogecoin issuance, such as the way Ethereum developers have done by adding a mechanism to burn ETH coins. The change would have to be supported by the network's miners to take effect.
In addition to this, Dogecoin has another problem that has been highlighted as far back as 2021. Analysts have noted Dogecoin's high degree of centralisation, as much of the DOGE cryptocurrency is concentrated in the wallets of large holders.
The presence of Dogecoin in the top ten cryptocurrencies by capitalization now says nothing about the fact that the project will not disappear. Many failed projects, such as Terra, Lisk and BitConnect, were once in the top 20 or even top 10.
Where is Dogecoin heading?
In November 2021, the protocol developers and the release of a new version of the original Dogecoin Core wallet reduced transaction fees for users by 1000 times. The fee is now only 0.01 DOGE per kilobyte of data. Tesla CEO Elon Musk, a part-time chief influencer of this cryptocurrency, supported reducing the commission.
Although there was no official announcement, it can be assumed that the commission reduction on the Dogecoin network is part of the strategy to integrate Dogecoin for payment for goods and services. For example, users found repeated mentions of the DOGE cryptocurrency (more than 50 times) on the payment page of Tesla's recently released CyberTruck pickup truck. These mentions were related to payments along with other payment methods.
The news only led to a slight increase in the price of DOGE. Still, if the company starts accepting cryptocurrency for payment, it could push the Dogecoin exchange rate harder.
Some members of the community are speculating that Elon Musk is involved in the management of Dogecoin and that Tesla will start accepting the cryptocurrency to pay for its goods in the near future. Previously, it was even revealed that Musk was secretly funding the development of the memcoin.
The DOGE memcoin has become a favourite of millions of users worldwide, who act as serious supporters of this cryptocurrency. The Dogecoin channel (3.8 million) in the social network X has even more subscribers than the Ethereum Foundation (3.1 million), which only confirms the thesis. Future space missions and the possible adoption by Tesla could be a powerful new driver of Dogecoin's development.
The future of Dogecoin cryptocurrency is debated among many experts, some of whom believe the project will disappear sooner or later. In contrast, others are confident that Dogecoin will remain an integral part of the crypto industry, if not retain its position. Although DOGE is a weak asset in terms of practical application, few would argue that memcoin has great historical and cultural value.
