What is Dogecoin? If you have ever known Bitcoin or Ethereum, Dogecoin is in the same line with them. In general, Dogecoin is a crypto-currency yet it is smaller than the two popular coins we mentioned. Dogecoin was originally created as a lighthearted joke for crypto-likers. The name “Dogecoin” is taken based on a once-popular meme. Dogecoin starts to be popularly known in 2021 as the fifth-largest cryptocurrency by market cap.
This article is going to lead you to an introduction to Dogecoin and how it works as well as the comparison between Dogecoin and Bitcoin, how to buy it, and the reasons why it is a good investment. Now let’s read the details of the review carefully to get a complete understanding.
What Is Dogecoin? How to Buy and Is it Worth?
What is Dogecoin? If you are just a newcomer in the world of cryptocurrency, let’s start by knowing how it was originated. In late 2013, Billy Markus and Jackson Palmer who are the software engineers created Dogecoin by branding the crypto-currency’s logo using a popular meme at that time. In this case, the meme was featured by the misspelled word “Doge” to describe a Shuba Inu dog.
Later, Doge is used to have fun at Bitcoin. And in the early days, the likers’ community arranged publicity stunts to raise the profile of Dogecoin. This is aimed to collect funds for the Jamaican Bobsleigh team to the 2014 Olympics or just give sponsors to NASCAR drivers.
Nowadays, Dogecoin is no longer a joke. It gained over 5,000% in 2021, exploding its value. It even becomes the favorite crypto-currency among the boosters consisting of Tesla CEO Elon Musk. Well, if Dogecoin becomes the favorite crypto-currency for people, it is pretty great.
How Does Dogecoin Work?
Are you wondering how Dogecoin works? Similar to Bitcoin and Ethereum, Dogecoin runs on blockchain technology. Blockchain is a distributed secure digital ledger that is functioning to store all of the transactions made using a decentralized digital currency. In short, blockchain stores all of the transactions you make with Dogecoin.
There is an identical copy of the Dogecoin blockchain ledger that all holders must carry. That copy must be frequently updated with all of the new transactions in the cryptocurrency. In this case, Dogecoin also uses crypto-technology to protect all of the transactions securely in the blockchain network.
Dogecoin can be either held or sold on the open market. Usually, the miners need to earn additional Dogecoin in exchange for processing transactions and supporting the blockchain ledger.
Dogecoin can be probably used for payments and purchases. However, it is not very effective to use due to the fact that there is no lifetime cap on the number of Dogecoins created by mining. This means that the crypto-currency is really inflationary.
If the miners are able to create millions of Dogecoins every day, the blockchain will give them rewards. This makes it very challenging to gain Dogecoin to hold up over time.
Dogecoin Vs Bitcoin
What is Dogecoin? If you already understand that it is a crypto-currency just like Bitcoin, so it would be better to compare Dogecoin to Bitcoin. In this case, there are some significant differences between the two types of crypto-currency.
First, Dogeoin enables miners to complete the mathematical equations faster and easier so that they can record the transactions. This makes Dogecoin more efficient to process payments. In comparison, you may need 10 minutes to complete new blocks on Bitcoin blockchain while you’ll need only 1 minute to do with Dogecoin.
Other significant difference is the fact that there is no lifetime cap on the number of Dogecoin you can create. With Bitcoin, you can have a lifetime cap of 21 million Bitcoin that limits the maximum number of coins you want to create. This means that you must go with the greater effort to gain a new Bitcoin and you’ll need a longer time to earn new Bitcoin.
How to Buy Dogecoin
Binance and Kraken are the crypto-currency exchange at which you can buy Dogecoin. If you want to buy it, then you will be required to set up and fund an account with U.S dollars or crypto-currency. If you complete it, you will be enabled to purchase crypto-currency including Dogecoin. Remember, the leading crypto exchange Coinbase does not provide support to buy Dogecoin.
Robinhood and TradeStation are online brokers where you can also purchase Dogecoin. However, they don’t offer as many of the crypto-currencies as exchanges but Dogecoin is usually available.
Once you have bought Dogecoin, the best place to go next is a crypto wallet. The crypto wallets offer not only online services offered by exchanges like Coinbase but also some apps on your device. Never forget to secure your wallet using a private password. This is aimed to provide an extra layer of protection against the hacks.
There are usually chances for you to earn free coins for doing those basic tasks online before you finally enter the world of purchasing and exchanging Dogecoin in a higher price. So get used to be with it firstly as your prior step.
Based on C.Neil Gray, a partner in fintech practice areas at Duane Morris LLP, you can try to perform the tasks at Dogecoin faucet to gain Dogecoin before you purchasing it. You can even just performing those tasks instead of purchasing it. Well, the tasks usually include watching an advertisement or taking the survey. However, it is now difficult to find this method works.
Is Dogecoin a Good Investment?
Is Dogecoin a good investment? This is a crucial question that may be questioning your mind while you are making the decision on entering the world of crypto-currency. Make sure you understand well the characteristics of each crypto-currency before you go further.
Keep in mind that there is no lifetime limit on the number of Dogecoin to exist. This way, millions of new Dogecoins are released on the markets every day but only a little incentive that is able to hold crypto-currency for a long period of time. In comparison, Bitcoin continues to rise in value due to the lifetime cap on the number of Bitcoins that the miner can create.
Based on the history, Dogecoin comes with a very low value which is around $0.003 per coin for most of 2020. Therefore, people prefer giving them away instead of selling them. In this case, Dogecoin is frequently used as a reward or tip for posting content by the users on social platforms like Twitter, Facebook, Reddit and others.
In 2021, there might not be sustainable gains in Dogecoin during the longer term. It seems necessary to know whether the crypto’s tipping and donating culture will continue remaining.
Should I Buy Dogecoin?
What is Dogecoin and Should I buy Dogecoin? This is the next question you may have on your mind if you have understood whether Dogecoin is a good investment or not. While it can be gained through performing online tasks, will you buy it later on?
It is great luck for those who bought Dogecoin to start 2021. They have been rewarded. However, it is questionable whether to buy Dogecoin or not particularly as an investment. On the coin’s value, there is always a constant flow of a new coin onto the market along with the unending downward pressure.
Compared to the other major cryptocurrencies, it is warned that Dogecoin has some risks so that additional security is quite necessary. This is because Dogecoin doesn’t have the same security and code-level security like Bitcoin and Ethereum have.
Further, there is no robust mining community for Doge so that it has higher exposure of a mining level attack than Bitcoin and Ethereum.
In fact, purchasing crypto-currency including Dogecoin is risky. It would be better to buy a few coins and familiarize yourself with the system though it may also be best to refrain from sinking more than a token amount of your money which is difficult to gain with crypto-currency that seems like a joke.
Is Dogecoin Valuable?
One more question that may spring up your mind is whether Dogecoin is valuable or not. However, the answer to this question is somehow debatable.
At the moment, some merchants may have accepted Dogecoin as a method of payment. However, nowhere near the level of necessity to use it as a sort of actual currency substitute. Unlike Ethereum, which is the rival of Dogecoin crypto-currency that enables the programmers to build applications for lending and borrowing money, there isn’t much to do with Dogecoin.
Believe it or not, Dogecoin is not reliable enough to store your wealth. It requires a certain level of long-term faith in the coin as well as in the blockchain. The expert says that Dogecoin doesn’t have a development team behind it. This means that no one knows who has added new code or functionality to it.
According to these limitations, Dogecoin seems still speculative. It has value since people believe it has value and someone else wants to buy it from them at a higher price like they do with other crypto-currencies.
Though Dogecoin is rising in price because of the low liquidity and significant growth in the network, if the network reaches a critical mass, there is no guarantee that the growth is sustainable. Luckily, you will not lost all of your money with Dogecoin in the future.
The real value of Dogecoin is in today’s meme-driven culture. This way, Dogecoin represents the value of the network of memetics. These may prove that there is an enormous value of Dogecoin. If Doge’s enthusiasts decide on implementing a new mechanism, Dogecoin will have a higher value for the long term.
Conclusion
What is Dogecoin? Have you completely understood about it? Based on our reviews, Dogecoin is a kind of crypto-currencies that can be exchanged and soled for money or storing wealth. However, compared to its rivals which are Bitcoin and Ethereum, Dogecoin is not as secure as them. It is also considered risky to go with Dogecoin since it seems used for a joke. In some cases, some merchants have already used it as a method of payment.
Depending on how deep you trust this crypto-currency, it is definitely your preference to go with Dogecoin or choosing the other crypto-currencies instead.
