I know dogecoin is really popular, one reason is Elon Musk’s investment and support, and another one is the features like top cryptocurrencies. But it’s also true that Dogecoin has many disadvantages that you don’t know. Make sure to know them.
No Supply Capital
It is a great drawback for Dogecoin that it doesn’t have any supply capital in the market. I mean, Dogecoin has no supply limit, and you create as much as you want with the proper effort. But this currency doesn’t have any supply capital. And that makes it a very risky investment. Besides, it will suffer from inflation very often. Since it can be created as much as wanted, but the distortion hasn’t increased that much, and the supply capital haven’t increased, so the prices of this currency are suffering from inflation, and it hasn’t increased what it is supposed to.
Created for Fun
Do you know Dogecoin and other Litecoin are created for fun only and making jokes about cryptocurrencies? Well, it’s true. Those are created for making jokes and memes. But Dogecoin is innovative, and it’s fun and joke nature are stopping people from recognizing its innovative nature of the Dogecoin. I mean, it has many drawbacks, but it is also an innovative thing that offers many benefits, but people can’t see that because they only know this is just created for making jokes.
Technical Support
One of the key factors that make any digital asset value is the technical support of that particular asset. And many expert traders have also told me to invest in that crypto that has good technical support. So, you can understand how important technical support is for cryptos. But Dogecoin lacks in that area. I mean, this crypto has very poor technical support, and this currency hasn’t been upgraded since 2015. So, how will it cope with other cryptos? Besides, crypto that hasn’t been updated for that long won’t do well in the future, and you can see that in the price trend of the dogecoin. Many people are also claiming that Dogecoin project developers have left the project and they are not going to invest or update the system.
Pump and Dump Scheme
It’s a very popular scheme, and if you don’t know, let me tell you about this. Suppose you are buying an asset in a large number, which will increase the value of the asset, and its price will rise. But when the price rises, then the holder releases or sells the asset and liquidates that asset, which makes the asset drop the price. It also happens with Dogecoin. A few people have held a large number of Dogecoin and invested in them, which increases the value of the Dogecoin. But when they release the asset, it makes the asset drop in value.
Not The Best Transactional Currency
Cryptocurrencies like Bitcoin, Ethereum, Litecoin, Dash, Bitcoin Cash, and others have many transactional opportunities and uses. But Dogecoin doesn’t have those many transactional opportunities. You won’t be able to use them in many transactional cases.