Dogecoin is a cryptocurrency like Bitcoin and Ethereum, but it is a very different animal from any of these popular coins. Dogecoin was originally created, at least partially, as a carefree joke for crypto enthusiasts, and is named after the once popular meme.
What is Dogecoin?
Created by software engineers Billy Marcus and Jackson Palmer Dogecoin Palmer branded the cryptocurrency logo using the then popular meme. This meme contained the word “doge”, which was intentionally misspelled to describe the Shiba Inu dog.
“Doge really started to enjoy Bitcoin,” said Pat White, CEO of Bitwave. Initially, a community of enthusiasts arranged for a publicity stunt to raise the profile of Dogecoin. Collect funds For example, send a Jamaican bobsleigh team to the 2014 Olympics or sponsor a NASCAR driver.
In early 2021, Dogecoin gained cult status on Reddit WallStreetBets Message Board — The Key Instigator Behind the January GameStop Incident — Enthusiasts promised to promote its value “on the moon” (before all discussions of cryptography were banned in the subreddit) ).
By May 2021, Dogecoin had risen to a high of $ 0.68 compared to a value of just under a penny at the beginning of the year. Tesla CEO Elon Musk was at least partially responsible for the massive growth after calling Dogecoin his favorite. Cryptocurrency.. By mid-2021, Dogecoin was consistently polling among the top five ciphers by market capitalization.
Since then, the value of Dogecoin has plummeted, remaining in the top 20 cryptocurrencies by market capitalization, but bottomed out at around US $ 0.11 in March 2022.
How does Dogecoin work?
Like many other coins, Dogecoin runs exclusively Blockchain.. Dogecoin’s digital ledger is constantly updated with every new transaction, and the network uses encryption to keep all transactions secure.
Dogecoin blockchain Proof of work Consensus mechanism. Miners use computers to solve complex mathematical formulas, process transactions and record them on the blockchain. In exchange for supporting blockchain, miners can earn additional Dogecoin and hold or sell it on the open market.
Dogecoin can be used for payments and purchases, but it is not a very effective and valuable store. This is mainly due to the fact that there is no lifetime limit on the number of Dogecoins that can be created by mining. In other words, cryptocurrencies are very expensive. Inflationon purpose.
Blockchain rewards miners by creating millions of new Dogecoins every day. This makes it very difficult to sustain speculative price increases for Dogecoin over the long term.
Dogecoin vs Bitcoin
For Dogecoin, Bitcoin.. First, it makes it faster and easier for miners to complete transactions and record formulas. This makes Dogecoin somewhat more efficient in processing payments.
“If the process of approving a new block on the Bitcoin blockchain takes 10 minutes, the Dogecoin blockchain only takes 1 minute,” said Gary De Waal, chair of Katten’s financial markets and regulatory group.
Another important difference is that, as mentioned above, there is no lifetime cap on the number of Dogecoins you can create. There is a 21 million Bitcoin lifetime cap that limits the maximum number of coins you can create. This means that miners will be forced to work harder and longer over time to acquire new Bitcoin, and to some extent Bitcoin’s ability to retain and grow its value. Helps to guarantee.
How to buy dogecoin
You can buy Dogecoin on crypto exchanges such as Binance and Kraken. The exchange requires you to set up an account in US dollars or cryptocurrencies to fund it. You can then buy and exchange cryptocurrencies, including Dogecoin. If you are Canadian, you can purchase Dogecoin using your debit or credit card (if your bank allows it). Alternatively, you can use a third-party service such as Simplex to facilitate Interace-Transfer and other types of bank transfers. wire transfer.
A few Online brokerIn addition to traditional assets such as stocks, investment trusts and bonds, including Wealthsimple Crypto, you can also buy Dogecoin. They don’t offer as many cryptocurrencies as exchanges, but Dogecoin is generally available.
As with any cryptocurrency, once you buy Dogecoin, it’s best to move the coin to your crypto wallet. Wallets can take many forms, from online services offered by exchanges such as Coinbase to apps on mobile devices to physical hard drives. Protect your wallet with a private password. Since the coins are stored outside the exchange, they are even more protected against hacking.
Before Dogecoin became mainstream and prices soared, we were able to earn free coins to perform basic tasks online.
“For many years, we were able to perform tasks on the Dogecoin faucet and earn instead of buying Dogecoin,” said C. Neil Gray, a partner in the FinTech Practices area of DuaneMorrisLLP. “The tasks included watching ads, conducting surveys, etc. These days, it’s hard to find the work.”
Is Dogecoin a good investment?
There is no lifetime limit on the number of Dogecoins that can exist, and with millions of new Dogecoins released to the market every day, there is little incentive to hold cryptocurrencies for long periods of time. The value of Bitcoin continues to rise due to the system’s lifetime cap on the number of coins that can be created.
“Doge isn’t really like Bitcoin, it’s like DASH or Bitcoin Cash, and the explicit goal is the currency of spending,” White said.
Historically, the value of Dogecoin per coin was very low, at around US $ 0.003 per coin for most of 2020. As a result, people are more likely to let go of them. “Users of social platforms such as Reddit, Twitter, and Facebook can use Dogecoin to reward each other for posting content, or’tips’,” Gray said. ..
Need to buy Dogecoin?
People who bought Dogecoin before the big profits of 2021 are well rewarded. Still, White is a little wary of buying Dogecoin, especially as an investment. The constant flow of new coins to the market has put endless downward pressure on the value of the coin.
White also warned of the additional security risks of Dogecoin compared to other major cryptocurrencies. He said, “It does not have the same security and code-level scrutiny as Bitcoin or code-level scrutiny. Ethereum I have it. In addition, the exposure of mining-level attacks far exceeds that of Bitcoin, as there is no particularly strong mining community around Doge. “
Buying all types of cryptocurrencies involves risks, including Dogecoin. It’s worth buying a few coins all the time to get used to the system, but it’s probably best to refrain from sinking more than a token of hard-earned money in a cryptocurrency that started your life as a joke. ..