One of the huge disadvantages of Dogecoin is the lack of a supply cap. Cryptocurrencies with no supply cap are unideal assets to hedge against inflation. Furthermore, DOGE’s infinite mining will eventually require more expansive blockchain mining activities. It will further expand its pool of miners and the number of computers to support the ever-growing increase in transactions since it uses the proof-of-work mechanism.
Pump and dump schemes has been in existence for a long time. Although pump and dump schemes are prohibited on regulated crypto exchanges, it still has its influence on certain cryptos. When a group of people purchase a large amount of coins which increases the price of the asset substantially, that is Pumping. When the coin reaches a higher value than what they were bought for, they release the assets to other buyers and take back a huge return. This type of manipulation in DOGE is quite common.
Despite its growing community of users and supporters, Dogecoin has relatively poor technical support. Unlike other cryptocurrencies, the development team of DOGE is not as big as them. Since 2015, there have been no technological updates and changes from DOGE. It is also crucial to highlight the fact that it does not offer any unique selling proposition in terms of technology.
Since DOGE started and was developed as a joke at existing coins like Bitcoin and Litecoin, This nature obstructs DOGE from integration and adoption as a digital asset.
Dogecoin, unlike other currencies, can only be used as a digital currency. Other currencies such as Tronic and Ether can function as a traditional currency. Cryptos like Bitcoin, Litecoin, Dash, and Bitcoin Cash have more transactional significance in the market than DOGE.
Introduced crypto millionaires and billionaires to the future of technology that they did not know would exist. But despite its achievements, investors should always test the waters before trading on currencies like Dogecoin.