Where do infinite cryptos like Dogecoin get their value from?

Like everything else in the market, the Dogecoin price is based on demand and supply.

Dogecoin is one of the cryptos that are regularly 'mined'. This requires state-of-the-art computers with a fast internet connection and access to cheap, preferably free, electricity. The offer therefore consists of the constantly produced coins and those offered on the market. 

The demand and thus the price of Dogecoin is determined by those who want to buy DOGE. And these are mostly people who are motivated by the tweets of famous people like Elon Musk and Mark Cuban. These tweets sometimes only consist of a word, a picture (meme) or even an sometimes unintentional, indirect mention.

demand and supply

There are two types of people on the supply side. Those who already own DOGE because they dismantled it in the past, got it in a promotion (AirDrop) or mostly bought it at a lower price than the current one. Or those who are currently reducing DOGE. 

The question arises: Where do celebrities get their Dogecoins from? Musk and Cuban, considering their assets and contacts, have access to the best high-tech machines, crews and insider information (such as when the latest mining chip hits the market). It is also conceivable that they have access to cheaper electricity than the average person.

Whether only a very small fraction of the dog population or more comes from in-house production does not matter - as long as the quantities catch it, and this is actively taken care of.

The Dogecoin case

The mining reward for each block of transactions is 10,000 DOGE. Equipped with the best equipment and in contact with the Doge development team, Cuban and Mask have a strong advantage. In addition, many cryptos are no longer worth mining after a certain time, as the rewards are halved after a certain time, e.g. Bitcoin .

There is no such mechanism at Doge. The reward stays the same. Almost every other legitimate crypto project follows the Bitcoin model and halves rewards in order to reduce supply and drive up the price. Since Dogecoin doesn't have that, the price depends entirely on demand. And this in turn is often dependent on famous people like Musk and Cuban and their publicity.

In addition to the dwindling supply, BTC and other legitimate cryptocurrencies also have an ultimate upper limit. At the same time, demand and thus the price are increasing. This is not the case with DOGE. It is very doubtful that celebrities like Cuban and Musk can keep a cryptocurrency alive on their own. 

Ergo, at some point DOGE will have a sustainability or demand crisis.

Why cryptocurrencies with limits fluctuate

Price drops also occur with larger crypto currencies such as BTC, but since the technical foundation and the establishment are completely different, things work differently. Their prices are accordingly more sustainable, and as the long-term charts show, “the good” cryptocurrencies follow a 4-year cycle, as the shock from the mining rewards is subject to a 4-year cycle. 

This is even one of the few reliable cause and effect events in the crypto market, which many seem like the wild west.

The bottom line is: whether it's hype, technical analysis, conspiracy or manipulation, nobody can write off basic principles. As unreliable and random as the market may seem at times, it is a zero-sum game. If one loses a euro, another wins one. 

As for memes and community coins, their strength is based less on technological advances in the underlying project and more on general interest - articles, news, social media, market purchases and so on.

Almost all cryptocurrencies rise in value when BTC is in a bull market, as it is now. But bull markets don't last forever. Musk and Cuban have a lot more to do than stand up for DOGE. That does not mean that DOGE does not have great potential, there are definitely strong arguments for this, but there is also a downside.

My Top Picks
Honeygain - Passive earner that pays in BTC or PayPal
MandalaExchange -The Best no KYC crypto Exchange! 
BetFury - Play And Earn BFG for daily Bitcoin and ETH dividends!
Pipeflare - Faucet that pays in ZCash and Matic, Games pay in DAI
Womplay - Mobile dApp gaming platform that rewards in EOS and Bitcoin
Cointiply - The #1 Crypto Earning Site
Torum - Join the latest Social Network and earn TRM for Free! 
LiteCoinPay - The #1 FaucetPay earner for Litecoin 
Upland - Collect Digital Properties & Test Your Skills
LBRY/Odysee - YouTube Alternative that lets you earn Money by viewing videos!
FaucetPay - The #1 Microwallet Platform
FREEBTC - The #1 FaucetPay earner for Satoshi's
FaucetCrypto - An earning/faucet site that pays out instantly
FireFaucet - An earning site that pays better for some than Cointiply
DogeFaucet - Dogecoin Faucet
xFaucet - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BCH, BNB, ZEC, FEY - Claim every 5 minutes
Konstantinova - BTC, ETH, LTC, Doge, Dash, Tron, DGB, BCH, BNB, ZEC, USDT, FEY, 25 Claims Daily

Disclaimer of liability

All information contained on our website has been researched to the best of our knowledge and belief. The journalistic contributions are for general informational purposes only. Any action that the reader takes based on the information found on our website is entirely at your own risk.