What Is Dogecoin & Is It A Good Investment In 2022?

Updated: May 13th, 2022
Kevin Groves
Kevin Groves
What Is Dogecoin & Is It A Good Investment In 2022?

On the 25th of April 2022, crypto godfather and richest man in the world Elon Musk shelled out $44 billion to purchase Twitter. Within 24 hours, the price of Dogecoin jumped dramatically, pumping from 12 cents to 17 – an increase of over 40%.

It’s a little unnerving that the actions of one person can make such a visceral impact on the price of a cryptocurrency, but that’s the reality of the world’s most popular memecoin – DOGE. In this article, we’ll dive into what makes Dogecoin special, and assess whether it is a solid investment prospect going forward.

What Is Dogecoin (DOGE)?

Dogecoin came to life in 2013, founded by American Billy Markus and Australian Jackson Palmer. Their original goal was to spoof the speculative nature of Bitcoin and other cryptocurrencies that had received serious investor interest without many legitimate use-cases. In that sense, Dogecoin started off as little more than a joke. It appropriated internet meme culture, honing in on the cute, fluffy Shiba Inu dogs which had become a sensation on message boards like 4chan and Reddit. The actual tech of the coin is based on a fork of open-source, P2P blockchain Litecoin.

While Dogecoin spent many of its formative years being valued well below one US cent, it exploded in 2021 to go up in price by 12,000% between January and May. The hysteria around Dogecoin, and meme-coins for that matter, has cooled off a little in the past six months, but it is still by far the most popular and seminal ‘joke crypto’ to ever exist.

top memecoins by market captop memecoins by market capTop memecoins by market cap. Source: Coinmarketcap.com

The legacy of Dogecoin has extended far beyond the coin’s actual value and use case. Its very existence spawned an entire culture of cryptocurrencies revolving around Shiba Inu (including SHIBA, Dogelon, HOGE) and animals in general. New low market cap/high-supply coins are being launched pretty much daily as a result of Dogecoin’s success, and although most of these newer entrants are questionable at best, DOGE has cemented itself as a legitimate player in the cryptocurrency industry.

What Can Dogecoin Be Used For?

Although Dogecoin has evolved in stature since the mid-2010s, its functionality has remained pretty consistent. While DeFi, NFTs and earning protocols have exploded, Dogecoin hasn’t strayed very far from its original philosophies – a cheap, fun way of sharing money with internet users around the world.

Previously, Dogecoin was intended as a joke to poke fun at the ridiculous price rises of Bitcoin in 2013 and did not offer any use case. Eventually, the creators Markus and Palmer abandoned the project, leaving the operation of Dogecoin in the hands of its devoted community. Because it had such a low value at this time – 0.00015 cents in 2015 – it started to be used as a method of tipping other people online.

Given the Doge meme originated from message boards like Twitter and Reddit, it made sense the coin would find a home there. People even began creating ‘bots’ that would automatically transfer DOGE to other internet users if requested.

What Are The Pros & Cons of Dogecoin?

Dogecoin has been around for nearly a decade and is one of the most well-known cryptocurrencies in the industry. Dogecoin is often used as an example of cryptocurrency being ‘worthless’. The pros and cons of Dogecoin are listed below.

How Does Dogecoin Work?

Dogecoin is a fork of Litecoin, which itself is a fork of Bitcoin and shares a lot of technological similarities. It runs its own blockchain network, which utilizes a proof-of-work consensus mechanism to validate transactions. This method involves ‘mining’ – a series of computers solving complex algorithms to verify new ‘blocks’ (transactions) on the chain.

Dogecoin’s blockchain uses a much simpler algorithm than traditional PoW protocols, which means less computational power is required to mine DOGE. This also means that Dogecoin has a much faster processing speed, with the technology able to execute approximately 30 transactions per second (TPS). This is a lot faster to process transactions compared to Bitcoin’s 7 TPS. To find out which cryptocurrencies are faster than Bitcoin, read this article next.

Is Dogecoin A Good Investment?

Dogecoin is one of the most popular cryptocurrencies out there, boasting a vibrant community comprising a host of celebrity influencers. Historically, Dogecoin has been a solid investment depending on when you invested in it. However, since the coin’s peak in early 2021, its value has been on a steady downward trajectory. Moreover, past performance is not a reliable indicator of future performance, particularly when it comes to a whimsical investment like Dogecoin.

As a serious asset, DOGE is lacking compared to titans like Ethereum, Bitcoin and Polygon. Its very nature as a meme coin means its price is heavily tied to speculation, and its primary use relies on being a relatively cheap digital currency. That said, many in the community are bullish that Dogecoin could eventually exceed $1 USD in value on prestige alone.

Dogecoin to USD historical price chartDogecoin to USD historical price chartDogecoin to USD historical price chart (log chart).

Admittedly, its tech is lagging behind some of its competitors (meme coins or otherwise) and doesn’t receive much in the way of new features and updates. But coins with immense popularity and influencer pull have a history of succeeding in spite of use-case limitations – ApeCoin being a great present-day example.

Before deciding to buy Dogecoin, be aware that it is an extremely volatile token with an inflationary and unlimited supply. This is usually a deterrence for long-term investors. Its legacy as the memecoin does mean that it is likely to maintain value better than some alternatives, but it should mostly be considered as a fun way to participate in a thriving community instead of a serious money-making prospect.

Related: How does crypto gain value?

How To Invest In Dogecoin?

Given Dogecoin’s high profile within the crypto and internet world, it is an extremely accessible coin. There are four main ways you can purchase Dogecoin:

  • Centralized exchange. Centralized exchanges (CEX) are the easiest way to buy Dogecoin and are the most popular choice for advanced and beginner investors alike. These platforms operate using a Central Limit Order Book, which aligns sellers with buyers (or bids and offers) via an online database. These exchanges typically allow customers to deposit fiat currencies into their accounts in order to purchase cryptocurrency. Most will come with a native, multi-token wallet that can be used to perform crypto-crypto transactions. Some even support “instant buy”, which lets you buy crypto using a debit or credit card without having to deposit cash first. These platforms are generally regulated by government entities and abide by basic know your customer and anti-money laundering laws. Examples include Binance, Kraken and FTX.
  • Decentralized exchange. Considering the immense stature of Dogecoin, it may be surprising to learn that it isn’t a big player in the DeFi world of crypto. It was only in 2021 when a Dogecoin-focused decentralized exchange (DEX) came to life, known as DogeEx and developed by Komodo. Since then, a few other DEXs have cropped up, and for the most part, they offer similar functions. Users can swap certain cryptocurrencies for Doge, or leverage earning opportunities like liquidity provision and yield farming.
  • Brokers. Brokers are very similar to centralized exchanges, although their back-ends work completely differently. Instead of being matched with other buyers or sellers (like with a CEX), investors buy directly from the broker. These platforms will look very similar to a CEX and are typically just as easy to use. They tend to have higher minimum deposits and serve accredited/institutional investors more than CEXs, although this is not always the case. Examples include eToro, Uphold and Robinhood.
  • Peer-to-peer. Dogecoin can be purchased directly from someone who already owns the asset. This may be a family, friend, or complete stranger in a marketplace. This is one of the riskiest ways to acquire Dogecoin, so be sure to vet the seller thoroughly. To trade Dogecoin P2P, a wallet that supports the coin will need to be created.

Where To Buy Dogecoin?

Dogecoin is available to purchase using centralized exchanges across the world. There are very few prominent platforms that won’t list DOGE as a supported asset. Before getting started, it is wise to research the best crypto exchanges before landing on a specific cryptocurrency provider. Prioritizing a specific feature – such as lowest fees, best trust rating, best mobile application – will make this process much less stressful. These are a few examples of trusted crypto exchanges to buy Dogecoin.

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Where Can I Store Dogecoin?

All cryptocurrencies are stored in a wallet. There is a huge range of cryptocurrency wallets available, varying from browser extensions, computer software, or physical hardware.

Dogecoin has an official wallet developed by the community, aptly named Dogecoin. There are two applications: Multidoge, which is a faster “light” wallet; and Dogecoin Core, which is a heavier-duty, “full” wallet. These wallets can be downloaded on Windows, Linux, or Mac operating systems, and there is also an Android application available on the Google Play store.

Beyond Dogecoin’s community offering, there are a number of other wallets that can be used to store your Dogecoin. They are broken down into three categories – exchange wallets, hot wallets, and cold wallets.

  • Exchange wallets. The vast majority of centralized exchanges come with a multi-token wallet that assets are automatically transferred to when purchased. Most people end up holding their crypto in an exchange wallet, although it is not always recommended. By leaving assets on an exchange, they are susceptible to hacks or exploits the platform may suffer. Additionally, they are in the custody of the exchange, meaning investors won’t have full control over their finances. The upside to keeping Dogecoin on an exchange is its convenience, particularly for crypto day traders. Examples include Bybit, Coinbase Wallet and Crypto.com.
  • Non-custodial hot wallets. “Hot wallet” is an umbrella term for any wallet connected to the internet. In that sense, exchange wallets are hot too – however, they are custodial. A non-custodial wallet comprises any third-party application or software that stores your cryptocurrency. These wallets will provide investors with two keys – a public and private key – which allows them to easily send and receive Dogecoin. Hot wallets are convenient, however, are riskier than cold wallets. This is because they are connected to the internet, which leaves them in danger of being hacked or exploited. Examples include Dogecoin, Trust Wallet and Atomic.
  • Cold wallets. A “cold wallet” is any wallet that isn’t connected to the internet. These wallets usually take the form of hardware like a USB dongle that can be plugged into your computer. While using a cold wallet to store DOGE is relatively inconvenient, the security it provides is well worth it. The most prominent example of a crypto cold wallet device is the Ledger Nano.

Frequently Asked Questions

Given its extremely high supply and inflationary nature, it may seem unlikely to reach this price based on fundamentals alone. However, DOGE has come close to reaching $1 USD in the past due to its immense popularity and its active community. This may play a big part in achieving this milestone sometime down the track.

Elon Musk is the self-proclaimed Godfather of DOGE and has been a long-time supporter of the Dogecoin cryptocurrency. Musk owns Dogecoin himself, regularly tweets about the coin and even allowed customers to purchase Tesla cars using DOGE.

Dogecoin is a high-risk investment that has demonstrated a propensity for price swings based on tweets and speculation. It certainly has potential for growth, but its jokey nature makes it a little harder to assess seriously.


Dogecoin is a fun, immensely popular cryptocurrency that has captured the hearts of investors and the public alike. Although it has demonstrated a limited range of features and development, the coin is backed by a growing community of devoted enthusiasts.

Cryptocurrency is a very volatile asset, and Dogecoin’s high supply and inflationary nature make it even more so. That said, the coin has demonstrated it can break out of these shackles and push the $1 USD mark in the past – and the jury’s still out on whether it can replicate this feat.

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Kevin GrovesKevin GrovesKevin Groves

Kevin is the founder and chief editor at HedgewithCrypto which he started in 2019 and has reached over 1.5 million visitors worldwide. He is passionate about cryptocurrency as an emerging technology and is heavily involved in the fast-growing fintech space. An experienced trader growing his portfolio since 2013, he has a strong understanding of investing in the crypto market using exchanges, brokers and derivatives platforms.

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