Dogecoins: The new cryptocurrency on the block

November 2013 saw a significant rise in Bitcoin value (from $200 to well over $1000 USD); it's no surprise that competing cryptocurrencies are popping up left and right. The latest of which, Dogecoin, appears to be a satirical dig at cryptocurrency. Be that as it may, Dogecoin is a real cryptocurrency and is currently valued at $0.00025 USD.

Volatility is the name of the game where cryptocurrency is concerned, after all, the only value hedges on what people are willing to pay. Considering the finite amount of coins that can be mined for each of these currencies, it's expected that they will continue to grow in value. However, with governments posing limitations and bans on financial institutions and their involvement with Bitcoin transactions, the future of cryptocurrencies is anything but certain. In the mean time, day traders willing to take the risk investing in such a volatile market have seen and grasped opportunities for significant return on investment.

Getting into a new currency can be exceedingly frugal; some early Bitcoin adopters have seen the value of their Bitcoins climb to millions, while others have accidentally thrown out their millions. With the way cryptocurrency mining works, difficulty starts off low and early miners (people who run programs to 'mine' the coins) get much more currency for their efforts than they would later on.

All cryptocurrencies are interlinked via exchanges, various free markets such as Crypto-Trade. As such, adventurous holders of the more established Bitcoins and Litecoins will tend to convert some of their existing currency to new currencies to diversify during the initial rush - before prices start to rise. This strategy allows potential for big reward with minimal risk. However, with alternative currencies being a dime-a-dozen, many fizzle quietly out of existence.

It's hard to say what will happen with Dogecoins, but with a cap of 100 billion Dogecoins (significantly higher than that of the 21 million cap on Bitcoins), it's fairly safe to say they will retain significantly less value per coin than Bitcoins. That said, due to the current ease of mining Dogecoins (a midrange graphics card is capable of mining thousands per day), it may be worth looking in to!

Image via Bitcoincharts

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