What is Dogecoin? A Complete Guide

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For crypto lovers looking for a lighter joke, Dogecoin was established and named after a meme that was prevalent at the time. Despite its strange beginning, Dogecoin’s popularity has soared in 2021, and it is now the ninth-largest cryptocurrency in terms of market capitalization.

Comedic inspiration was the driving force behind Dogecoin (DOGE), a cryptocurrency launched in 2013. The “Doge” meme depicts a Japanese dog breed, the Shiba Inu, sitting with its paws curled over each other. That is the inspiration for Dogecoin.

What is Dogecoin?

Dogecoin is one of the thousand cryptocurrencies that appeared in the last few years. Instead of inventing a new digital currency to address a need, Dogecoin was established to mock Bitcoin and the absurdity of purchasing a digital asset with no assets or cash flow to support it.

It all started as a joke, with the cryptocurrency Dogecoin based on the Shiba Inu dog meme that became famous on the internet in 2013. Jackson Palmer was the driving force behind the project as a software developer with Adobe but stepped aside.

Some shops accept Dogecoin as a form of payment; however, it is most often used for tipping users on Reddit and Twitter. Even website domain names may be purchased using it. However, it was mainly founded to dispel the stigma attached to cryptocurrencies at the time. To counteract the greed in the cryptocurrency ecosystem, Dogecoin was created with a mining mechanism that keeps its value at a constantly low level, making it undesirable for investors.

Usage of Dogecoin

If you’re looking to transfer money between individuals, Dogecoin may be used in the same way other cryptocurrencies, like Bitcoin. Even though a transaction record is publicly visible on the blockchain, users may still perform semi-anonymous transactions. There is no need to use a bank or any other conventional financial institution to achieve this.

Dogecoin is based on a decentralized computer network that uses a blockchain, distributed ledger. You may compare the blockchain to a long-term receipt for all money transactions. The blockchain is a distributed ledger that records and validates all transactions.

For years, the Dogecoin community has been intrigued, but in 2021, the asset’s price skyrocketed due to the hype around it. On the other hand, the coin itself lacks many distinguishing characteristics that would indicate that it might replace the dollar as the world’s leading currency or reserve asset.

Is Dogecoin a Fork of Luckycoin?

Dogecoin is a fork of Litecoin, a fork of Luckycoin (now defunct) (also a fork of Bitcoin). A fork in a blockchain may result in an entirely new protocol and a brand new coin. After a split in the Bitcoin network in 2017, Bitcoin Cash was born.

The Dogecoin blockchain can execute 30 transactions per second compared to Bitcoin. Proof of work consensus algorithm Auxiliary Proof of Work lets individuals mine other proof of work cryptocurrencies (mainly Litecoin) and mine DOGE at no extra expense. Merged mining is the term for this technique.

Initial block rewards were random and varied between zero and one million DOGE. It persisted until the quantity of Dogecoin hit 100 billion, which happened in February of this year. As a result, every block that has been mined since then has brought in 10,000 DOGE as a reward.

Miners produce one block per minute, and the supply of Dogecoin is unlimited. Palmer has claimed that this was a mistake and that the supply limit should have been 100 billion instead. It was kept ‘unfixed.’ to keep the price of DOGE low,

Aside from Litecoin, Dogecoin also employs Scrypt technology, which is less computationally intensive and uses less energy than Bitcoin’s SHA-256 mining method, which is more computationally intensive and consumes more energy. Since Dogecoin’s supply ceiling is set at 18.5 million coins, compared to Bitcoin’s 21 million, which has already been mined, Dogecoin is quite different.

Dogecoin as Payment Method

The availability of Dogecoin may be a significant factor in this. The coin has no restriction on the number of coins it may produce. Dogecoin’s value is inflated by mining 14 million tokens per day. On the other hand, Bitcoin has a fixed quantity of 21 million coins, ensuring a defined scarcity.

As an alternative currency for tipping or payments online or otherwise, Dogecoin may be a viable option. Compared to other crypto assets, such as Bitcoin (BTC), its US dollar pricing per unit is substantially lower, enabling users to deal with absolute numbers rather than working with fractions of BTC.

With Dogecoin’s low price, high popularity, and fast transaction speed, it looks like DOGE might be a viable alternative to Bitcoin as a kind of transactional asset. Moreover, the coin’s active user base has helped mainstream investors better understand DOGE. Even then, the asset may fade away like many past fads before it — drawing attention for a short period but never being a long-term answer.

Dogecoin is well ahead of Bitcoin in its technological design regarding transaction speeds. Every 10 minutes, a new block is mined on the Bitcoin network. Dogecoin’s blockchain blocks are completed in one minute. Dogecoin’s blockchain creates more blocks in the same period, even though each block on Dogecoin’s and Bitcoin’s respective blockchains is one megabyte in size. Although Bitcoin’s transaction speed has been criticized in the past, it has evolved into a more valuable asset as a store of wealth.

Hype around Dogecoin

The Dogecoin Foundation is a non-profit organization based in Colorado, USA, to support the community’s charitable efforts. This year’s Talladega All-Star race included NASCAR driver Josh Wise, who wore the logo on his vehicle and clothing, and a Jamaican bobsled team sponsored by the organization in 2014. They also helped finance the construction of a clean water well in Kenya via the Doge4Water initiative.

Elon Musk, Tesla CEO, and Reddit users are all proclaiming the worth of Dogecoin as a new global currency, although it was created as a joke to poke fun of cryptocurrencies. Dogecoin being the money of Earth in the future would be the most ironic consequence.’ In response to Musk’s latest tweet regarding Bitcoin’s energy use, the cryptocurrency’s price dropped by 30%.

The price of Dogecoin soared when he tweeted that he was working with the project’s creators to strengthen the network. In his last tweet, he also asked his followers whether they wanted Tesla to accept Dogecoin. Small investors may significantly impact markets, as seen by recent gains in meme currencies like Dogecoin and stock values like GameStop.

Is Dogecoin Worth Anything?

Some claim that Doge has no intrinsic value and that there is no incentive for anybody to invest in it at all. An expert in conventional currency trading, Jeffrey Halley, has said that ting

Dogecoin and Bitcoin’s low numerical prices may attract some investors, but regardless of whether you put $1,000 in Dogecoin or Bitcoin, the risk is the same. Curtis Ting, Kraken’s European managing director, proposes that investors consider Dogecoin as a low-value cryptocurrency. ‘Investors purchase Dogecoin to engage in a self-deprecating joke about their incapacity to invest intelligently,’ he said, adding that the price of a single Dogecoin continues to rise as the value of the whole network grows.

Pump and dump schemes are when users artificially raise the value of a low-priced asset in order to entice investors to purchase the item, only to dump it and leave behind those who were too slow or stupid to act. Because Dogecoin ownership seems to be concentrated among a small number of anonymous people, it is unlikely that the price of the cryptocurrency will change much.

History of Prices

Since its inception in 2013, Dogecoin has traded at a discount of fewer than 0.001 cents. After hitting a high of about $0.018, Dogecoin’s price continued to decrease over the following months and years.

Dogecoin’s price briefly rose beyond the $0.01 barrier in early January 2021. In addition, Dogecoin had a significant price increase in late January, rising from $0.03 per coin to $0.07 in only two daily candles, or 48 hours.

Later, the item was trading at around $0.088 per coin. It took weeks for the coin’s price to stabilize after a steep drop to the $0.04 area, building up to its sudden surge in value. May 2021 saw the price of Dogecoin hovering around $0.74. The asset’s community of interested individuals and the buzz around the asset seem to have been the primary factors behind this price increase.

On a cryptocurrency exchange like Binance or Kraken, you may purchase Dogecoin. You must open an account and deposit money into it to use the exchanges. Dogecoin is one of the cryptocurrencies that can be purchased and traded. Coinbase, the world’s most popular cryptocurrency exchange, does not allow Dogecoin purchases.

Additionally, certain online brokers, like Robinhood and TradeStation, enable you to acquire Dogecoins. Dogecoin is typically accessible, even though they don’t provide as many cryptocurrencies as exchangers.

You should transfer your Dogecoins to a crypto wallet after you’ve acquired them, just as with other cryptocurrencies. Even though Coinbase doesn’t allow you to purchase Dogecoin directly, you can keep it in your Coinbase wallet. Wallets may either be applications on your phone or a real hard drive. A unique password protects the wallet that only you know. There is an additional degree of safety against hackers since your coins are housed outside an exchange.

It used to be possible to earn free Dogecoins by doing simple internet chores before Dogecoin became widespread and soared in value.

Fintech partner C. Neil Gray says that Dogecoin “faucets” have allowed users to earn the cryptocurrency instead of purchasing it for years. Watching a commercial or filling out a survey were among the chores assigned.” It’s grown more complex in recent years to locate any that work.”

Is Dogecoin a Smart Investment?

To retain Dogecoins long-term, there is no motivation since there is no limit on how many Dogecoins may exist, and millions of fresh Dogecoins are produced every day. Because of the lifetime restriction on the number of coins that the system may issue, Bitcoin’s value continues to climb.

In White’s view, “Doge is less like Bitcoin and more like DASH or Bitcoin Cash, where the explicit goal is a spending currency,” he stated.

Many individuals were more inclined to give away Dogecoins because of the currency’s historically low value (about $0.003 per coin for most of 2020). According to Gray, Dogecoin may be used to “tip” each other on social media networks like Reddit, Twitter, and Facebook.

If Dogecoin continues to rise in 2021, it may not be sustainable in the long run. What remains to be seen is if the cryptocurrency tipping and donation culture will persist.

Buying and Selling of Dogecoin

It is possible to trade several of the leading cryptocurrencies, including Dogecoin, in the same manner. It is possible to buy or sell Dogecoin on various cryptocurrency exchanges, with several of them accepting consumers from the United States of America. The only method to acquire DOGE is to transfer fiat cash (for example, dollars), stable coins, or other crypto assets to a cryptocurrency exchange and then purchase the cryptocurrency with that money. It is the only way to purchase cryptocurrency. Users have the option of selling their DOGE on the market and receiving cash or other currencies in return.

Individuals may also acquire or sell DOGE in person if they so want. Dogecoin trading is quite similar to Bitcoin trading in that it is a digital currency. You may make purchases of DOGE on several different websites, some of which accept credit cards.

It is also necessary to emphasize the importance of keeping track of your Dogecoin holdings. However, since DOGE must be kept on the cryptocurrency market where it purchased it, this technique may result in owners having less control over their money.

Owners of Dogecoins have the option of keeping their coins in a wallet that they create and host on their computers. Using one of these wallets entails a higher level of security and responsibility, but it also provides you with a broader range of alternatives for storing your money. Hardware wallets and local wallets are only a few of the options available. You may store Dogecoin in a user’s preferred wallet; however, you must transfer it from a cryptocurrency exchange to remain in a wallet for long periods.

The spending possibilities available to DOGE holders are restricted. Once it has been sold on a cryptocurrency exchange and the funds have been deposited into your account, you may cash out or transfer the funds. In addition to transferring Dogecoin to a crypto card, Dogecoin users have the option of selling their DOGE for fiat currency and spending the proceeds. According to the team’s website, the NBA’s Dallas Mavericks will also accept Dogecoin payments for items and tickets beginning in 2021.

A lot of investors have shown interest in Dogecoin in recent months due to its increasing price value. This meme coin is responsible of creating hundreds of millionaires who invested in DOGE when it was trading low. Due to its volatile nature, several investors lost their hard-earned money as it plunged suddenly due to massive sell-offs.

Some renowned Wall Street analysts have slammed DOGE due to its high volatile factor and lack of use cases. But on the other hand, Tesla CEO, Elon Musk, supported it. He himself invested in DOGE token and also asked followers to invest in the meme token. Following Elon Musk, hundreds of traders and investors placed their bets on the meme cryptocurrency. Due to heavy investment, Dogecoin successfully made its spot top ten coins in terms of market cap. Still, some crypto proponents are not happy with meme coins such as Dogecoin and Shiba Inu. According to them, popularity of these meme tokens will fade away.

Dogecoin’s Future

What Dogecoin, or any other cryptocurrency, will look like in the future is anyone’s guess. Many bitcoin commentators, bloggers, and YouTubers are divided in their opinions. It is especially true in the bitcoin community (believing that Bitcoin and other cryptocurrencies will go to the moon).

In contrast, the increase in interest rates is part of a more significant trend of investors becoming more comfortable with hazardous investments. In his capacity as head of the quantitative strategy at S&G SA, Lapthorne cited Dogecoin as an example of “an increasingly large number of weird and wonderful signs of market excess,” which included “an increasing number of weird and wonderful signs of market excess.” CoinMarketCap reports that over 50 meme cryptocurrencies have been introduced in the previous several months.

The single most fundamental hindrance to its spread is that you cannot use it for transactions. Compared to other cryptocurrencies, the usage of meme coins is somewhat influenced by the popularity of the meme created. As a result, if investors cease to pay attention to the meme, Dogecoin’s value will decline significantly. One of the most well-known instances of this is Dogecoin, a very volatile and speculative cryptocurrency.

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