Dogecoin is a cryptocurrency that has gained significant limelight in the last year. People may have heard of Ethereum or Bitcoins, but there still is a lot of mystery when it comes to the meme cryptocurrency.
Dogecoin was originally intended to be a lighthearted joke for cryptocurrency enthusiasts and was named after a popular meme, the Doge. Even though it was created with an unusual origin story, dogecoin has exploded into fame in 2021, becoming the fifth-largest cryptocurrency in the market cap! Today, we intend to explain what Dogecoin is, and what makes this prank cryptocurrency so special.
So, What is Dogecoin?
Billy Marcus and Jackson Palmer, both software engineers, created Dogecoin crypto in late 2013. Palmer came up with the cryptocurrency brand and logo by using the Doge meme. It was popular back then, featuring a Shiba Inu dog deliberately misspelled as “doge”.
Dogecoin became a cult following on Reddit’s message board for the page @/WallStreetBets. You might recall the channel as the primary mastermind behind the GameStop short squeeze in January 2021, where common people and betting enthusiasts had committed to propelling the stock value “to the moon”.
Today Dogecoin is not a meme cryptocurrency or joke any longer, skyrocketing in value while gaining more than 5,000% in the first few months of 2021. Among its biggest supporters is Tesla genius Elon Musk, who named Dogecoin as his favorite cryptocurrency. He also declared Dogecoin as the “people’s cryptocurrency,” and promised to take a physical token of Dogecoin to the moon.
What is the Difference Between Dogecoin and Bitcoin?
Dogecoin is faster and simpler to mine; solving the mathematical equations is quicker, making Dogecoin more efficient to be used for processing payments.
What makes Bitcoin’s blockchain 10 minutes to ratify new blocks, Dogecoin does in only one minute.
Another notable difference is the lack of a lifetime ceiling on the quantity of Dogecoins that exist and circulate, creating unlimited coins. However, Bitcoin has a lifetime cap of 21 million Bitcoins, limiting the maximum number of coins that can be mined and circulated. This makes it more difficult at every level for miners to solve problems to get Bitcoins, which also helps Bitcoin to hold its power by being exclusive while growing in value over time due to the process called “halving”.
How Does Dogecoin Work?
Dogecoin is a cryptocurrency powered by blockchain technology, just like Bitcoin. Blockchain refers to a distributed and secured digital ledger storing transactions made with decentralized digital currencies.
Dogecoin holders possess an identical copy of its blockchain ledger, which gets updated frequently with new transactions. Dogecoin’s network also uses cryptography for secure transactions.
People termed as miners solve complex mathematical equations using their computers in order to process transactions while recording them on the Dogecoin blockchain. This provides the network proof of work system. As a reward for solving and processing transactions to support the blockchain ledger, miners get Dogecoins that they can choose to hold or sell in the cryptocurrency market.
Dogecoin can be used to make payments and purchases but isn’t a very reliable or practical store of value. This is due to the reason that Dogecoin has no lifetime cap on the number of “coins” that may be mined. Dogecoin is a cryptocurrency that was created to be highly inflationary in nature. The blockchain rewards that miners receive for their work create millions of new Dogecoins every day. However, it also makes it very difficult for speculative price gains to hold up for a long time. The meme cryptocurrency has still managed to gain significant popularity, thanks to Elon Musk tweeting about it, and the common people, who are driven to make it reach $1.
How to Buy Dogecoin?
You can purchase Dogecoin using a cryptocurrency exchange platform. These cryptocurrency exchanges need you to set up and top-up your account with cryptocurrency or U.S. dollars. Once your account is active, you can purchase and exchange Dogecoin and other cryptocurrencies. There are several exchange platforms that support Dogecoin. However, Coinbase, the leading cryptocurrency exchange does not.
Some online brokers also facilitate buying Dogecoin along with their services to trade conventional assets such as mutual funds, stocks, and bonds. They don’t have as many cryptocurrency options as the exchanges, but you will generally find Dogecoin.
Once you have bought Dogecoin, you should move them to a crypto wallet for safety. Wallets come in various forms, ranging from online services by exchanges to apps on your Android or iOS device or even on a physical hard disk drive. These wallets are secured with an alphanumeric password. Since the Dogecoins are stored away from an exchange, you add an extra layer of security to your cryptocurrency against hackers and theft, irrespective of which cryptocurrency you have.
Before Dogecoin became popular in the mainstream media and jumped up in price, people could complete basic tasks online and earn free coins as an incentive.
Facts About Dogecoin You Probably Didn’t Know About
- “Doge” is Dogecoin’s mascot. The amusing image of a startled Shiba Inu is a Japanese breed of dog that has become popular as an online meme.
- Dogecoin possesses one of the largest and most active communities in the crypto world, with personalities like Elon Musk promoting the battle between people’s cryptocurrency and capitalism.
- The Dogecoin community has come together in support of a variety of charitable causes and other endeavors.
- Dogecoin has also funded a NASCAR race.
- Contrary to Bitcoin, Dogecoin possesses no upper limit. There are more than 100 billion Dogecoins in market circulation!
People who purchased Dogecoin at the start of 2021 have been well rewarded. However, experts are wary about buying Dogecoin, especially for investment purposes. The constant inflow and abundance of new coins put downward pressure on its value. Will Dogecoin ever reach $1? You never know, especially when you look at the incline at price because of the push it gets, thanks to business personalities like Elon Musk rooting for it to succeed!
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