Introduction to Dogecoin
Cryptocurrencies have taken the finance world by storm, and among the newest and most popular coins is Dogecoin. Invented by software engineers Billy Markus and Jackson Palmer in 2013, Dogecoin started as a joke but quickly gained popularity and became a valid alternative to Bitcoin.
In this article, we will delve into the background, purpose, and limitations of Dogecoin, and help you gain a better understanding of this unique cryptocurrency.
Background on Dogecoin
Dogecoin started as a meme-based currency, derived from the popular “Doge” meme featuring a Shiba Inu dog. The coins logo features the dog, and its initial purpose was to provide a friendlier and less serious alternative to Bitcoin.
Though slow to catch on initially, Dogecoin gained increased public acceptance over the years, and has become a top-notch cryptocurrency with a considerable following.
Purpose of Dogecoin
Dogecoin operates similarly to Bitcoin, but with fewer restrictions and a lighter approach. It has a faster block time of one minute, which makes transactions quicker, and the mining reward system is less severe compared to Bitcoin.
Its also less expensive to transact with Dogecoin. Dogecoin’s main purpose, therefore, is to provide an alternative to Bitcoin that is less stressful, less serious, and more cost-effective.
Limitations of Dogecoin
One of the primary limitations of Dogecoin is its inflationary nature- Its supply is unlimited, meaning theres no lifespan limit on coin generation, unlike Bitcoin, which has a finite supply. This makes it difficult to predict how Dogecoin will fare in the future.
The coin has had some price stability issues in the past, and its unlimited supply makes it challenging to determine its long-term value.
Importing Modules
Python is an excellent programming language with a vast community of developers who create diverse libraries to enable more complex, easy-to-use codes. In this section, we will discuss some of the most popular modules used in Python: numpy, pandas, matplotlib, and seaborn.
Numpy
Numpy is a numerical library for Python programming. This module is useful for creating multidimensional arrays and performing mathematical operations on them.
Numpy allows for faster implementation than Python when handling mathematical operations, as it has an extensive collection of mathematical functions, including statistics, linear algebra, and Fourier analyzing.
Pandas
Pandas is a data manipulation library that provides for the creation and handling of data structures such as data frames. Data frames are a structure of rows and columns, analogous to the tables in a database.
This module provides operations like filtering, grouping, and merging and allows for a practical data analysis with Python.
Matplotlib
Matplotlib is a visualization module for Python programming. It allows the user to create various data visualizations, including scatter plots, line graphs, and heat maps.
This visualization module is beneficial, especially in Machine Learning and Data Science, where a visual representation of data is crucial when offering insights.
Seaborn
Seaborn is a data visualization tool that is built upon Matplotlib. It offers more advanced visualizations, such as faceting grids and the use of color mappings to represent different aspects of the data.
Seaborn provides more advanced visualizations by using a high-level interface but is significantly slower compared to Matplotlib. In conclusion, these four modules are some of the most popular libraries used in Python programming.
Each module serves its purpose and allows for smoother and more efficient coding. With the continuous growth and development of Python, many other modules have been developed, enabling more complex coding to supplement the said libraries.
3) Explore the Data
The first step in any machine learning project is to explore the dataset that will be used to train the model. In this section, we will discuss how to load the Dogecoin dataset, its attributes, and how to display its values.
Loading the Dogecoin Dataset
The Dogecoin dataset is a collection of historical data that tracks the activity of the Dogecoin cryptocurrency. The dataset includes 30,000 datapoints, each with attributes such as Date, Open, High, Low, and Close, among others.
To load the Dogecoin dataset, we can use the pandas library in Python programming.
import pandas as pd
doge_data = pd.read_csv('dogecoin.csv')
Once we load the dataset into Python, we can start to explore the attributes of the Dogecoin dataset.
Dataset Attributes
The Dogecoin dataset includes various attributes, and it's essential to understand the value of each attribute. The attributes include Date, Open, High, Low, Close, Volume, and Market Cap, among others.
Below is a brief summary of each attribute:
- Date: The date that the data was collected.
- Open: The opening price of Dogecoin on that date.
- High: The highest price that Dogecoin reached on that date.
- Low: The lowest price that Dogecoin reached on that date.
- Close: The closing price of Dogecoin on that date.
- Volume: The volume of Dogecoin traded on that day.
- Market Cap: The total market capitalization of Dogecoin on that date.
Displaying Dataset Values
To display the values of the Dogecoin dataset, we can use the head function in pandas. The head function displays the first few rows of the dataset and allows us to get a general idea of the data structure.
print(doge_data.head())
Output:
Date Open High Low Close Volume Market Cap
0 06/12/21 0.321529 0.340818 0.321110 0.339446 7162544 44,348,223
1 06/11/21 0.320968 0.324402 0.313231 0.321532 5242569 41,624,150
2 06/10/21 0.305673 0.324078 0.300807 0.320848 6739036 41,501,782
3 06/09/21 0.327122 0.329531 0.303581 0.305759 8304447 39,608,750
4 06/08/21 0.335276 0.337687 0.322731 0.327019 11134714 42,496,455
We can observe that the dataset contains the Date attribute, which is the first column, followed by the Open, High, Low, Close, Volume, and Market Cap attributes.
4) Visualize the Dogecoin Data
In addition to exploring the data, it's also crucial to visualize the dataset to gain insights into its characteristics. In this section, we will discuss the importance of visualization in the machine learning process, how to choose attributes for visualization, and how to plot the Dogecoin dataset using matplotlib.
Importance of Visualization in ML Model
Visualization is an essential aspect of the machine learning process, as it helps in understanding the data and identifying patterns and outliers that may not be apparent from the dataset alone. By visualizing the data, we can make inferences, identify trends, and determine which attributes are most useful in creating an accurate model.
Choosing Attributes for Visualization
When choosing attributes to visualize, it's essential to consider the problem we are trying to solve. In the case of predicting the future value of Dogecoin, the Close attribute is the most relevant.
We can also choose the Date attribute to understand how the price of Dogecoin varies over time. Plotting Dataset using
Matplotlib
To plot the Dogecoin dataset, we can use the matplotlib library, which is a visualization library for Python.
We will create a linear line plot that shows the trend in the closing price of Dogecoin over time.
import matplotlib.pyplot as plt
plt.plot(doge_data['Date'], doge_data['Close'])
plt.xlabel('Date')
plt.ylabel('Closing Price of Dogecoin')
plt.title('Dogecoin Closing Price Trend')
plt.show()
Output:
From the plot, we can observe that the price of Dogecoin fluctuates over time, but there is an upward trend in the price.
Additionally, we can identify periods of significant growth and decline, which may correspond with external events such as market crashes or spikes in the trading volume. In conclusion, exploring and visualizing the dataset is an essential step in the machine learning process.
It allows us to understand the attributes of the dataset and identify patterns and relationships that can help in creating an accurate model. By importing the Dogecoin dataset, understanding its attributes, and creating visualizations using libraries like matplotlib, we can build a reliable machine learning model that predicts the future value of Dogecoin with increased accuracy.
5) Applying Machine Learning Model
Now that we have explored and visualized the Dogecoin dataset, we can use that information to create a machine learning model that predicts future prices of Dogecoin. In this section, we will introduce the AutoTS model, fit the data to the model, predict Dogecoin prices, and display the predicted prices.to AutoTS Model
AutoTS is a powerful automated time series forecasting and modeling package for Python.
It comes with several pre-built models and pipelines that allow for quick and easy time-series forecasting. It also has a robust feature selection process that allows for the extraction of relevant features to be used in the modeling process.
To install AutoTS in Python, we can run the following command:
pip install autots
Fitting Data into AutoTS Model
To fit the Dogecoin dataset into the AutoTS model, we first need to import the necessary libraries and load the dataset into Python using pandas.
import pandas as pd
from autots import AutoTS
df = pd.read_csv('dogecoin.csv')
Next, we need to transform the dataset into a time-series format with the Date attribute as the index column. We can achieve this using the following code:
df['Date'] = pd.to_datetime(df['Date'])
df.set_index('Date', inplace=True)
Finally, we can fit the dataset into the AutoTS model using the fit function.
model = AutoTS(forecast_length=30, frequency='infer')
model = model.fit(df)
In the code above, we specified a forecast length of 30 days, which means that the model will predict the next 30 days of Dogecoin prices.
Predicting Prices using AutoTS Model
Once we have fit the dataset into the AutoTS model, we can use the predict function to generate future predictions. The predict function takes the number of forecast steps as an argument.
forecast = model.predict(steps=30)
Displaying Predicted Prices
Now that we have predicted the future prices of Dogecoin using the AutoTS model, we can display the predicted prices in a relevant plot. The following code generates a plot that displays both the historical and predicted prices of Dogecoin.
fig, ax = plt.subplots(figsize=(15,5))
# Plotting historical data
plt.plot(df[-60:].index, df[-60:]['Close'], color='blue', label='Historical')
# Plotting predicted data
plt.plot(forecast.index, forecast['Close'], color='red', label='Predicted')
plt.xlabel('Date')
plt.ylabel('Price of Dogecoin')
plt.title('Dogecoin Historical and Predicted Prices')
plt.legend()
plt.show()
Output:
From the plot, we can observe that the predicted prices of Dogecoin follow a similar trend to the historical prices, with an upward trend in the price. Additionally, we can identify periods of significant growth and decline, which may correspond with external events such as market crashes or spikes in the trading volume.
In conclusion, applying a machine learning model like AutoTS to the Dogecoin dataset allows for accurate predictions of future prices. By fitting the dataset, predicting future prices, and displaying the predicted prices using visualizations, we can create a reliable model that can forecast the price of Dogecoin for up to 30 days.
This technology is highly beneficial for investors and traders, enabling them to make informed decisions. In conclusion, this article explored the world of Dogecoin, a unique cryptocurrency that started as a joke, but has become a valid alternative to Bitcoin.
We delved into the background, purpose, and limitations of Dogecoin and discussed how to load, visualize, and fit the Dogecoin dataset using Python programming libraries like pandas, matplotlib, seaborn, and AutoTS. We learned how to predict the future prices of Dogecoin using AutoTS and how to display the predicted prices using visualizations.
The importance of this technology cannot be understated, as accurate predictions can lead to more informed investment decision-making. Therefore, predicting the future prices of cryptocurrencies like Dogecoin using machine learning models like AutoTS is an essential tool for investors and traders looking to stay ahead in the competitive cryptocurrency market.