What is DogeCoin and why are so many people suddenly talking about it?
Could it be the new GameStop?
What is DogeCoin?
Dogecoin was started as a joke by two software engineers, Billy Markus and Jackson Palmer, as a fun and instant cryptocurrency back in 2013.
The virtual currency is a reference to the iconic Doge meme from that time, which featured a shocked-looking Shibe dog.
Palmer purchased a domain after joking about combining two of the internet's most talked-about topics, cryptocurrency and Doge, to create the coin, tweeting at the time: "pretty sure it's the next big thing."
Software engineer Billy Markus saw a note left by Palmer on the domain and tried to get in touch with him while using Bitcoin’s open-source code to create the Dogecoin at the same time.
Much like during the GameStop boom, the Dogecoin subreddit was the source of much of their success while breaking into the crypto industry.
What is a cryptocurrency?
A cryptocurrency is a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend and has seen a massive rise in recent years.
A cryptocurrency is based on a network that is distributed across a large number of computers, allowing them to operate outside the control of central authorities.
What sparked the boom?
It was not entirely clear what sparked the surge in DogeCoin this week, however, the cryptocurrency was mentioned online in recent days by some high-profile users.
Tech billionaire Elon Musk tweeted earlier this month that he wanted to put DogeCoin on the moon, meanwhile, stock trader Jordan Belfort of Wolf of Wall Street fame and American snack company Slim Jim have also made references to the crypto.
How does it work?
To buy cryptocurrencies, you'll need a 'wallet', or an online app that can hold your currency - companies such as Revolut have already begun to offer trading tabs to make this process easier.
You create an account on an exchange and then transfer real money to purchase cryptocurrencies such as Bitcoin, Ethereum, or DogeCoin, transferring them back for profit once the value goes up, or leaving them to accumulate and gain interest over time.
Should you invest?
Much like any cryptocurrency or stock, the market can be incredibly volatile, as seen during the GameStop boom earlier this year.
While the value of the coin has been skyrocketing in recent days, Dogecoin still sits at a value of about 21 billion USD - which is still a fraction of the size of Bitcoin. If a DogeCoin rises to $1, it will still leave the coin at roughly half the size of Ethereum, cryptocurrency’s number two player - so be careful not to invest anything you aren't willing to possibly lose.