What is Dogecoin? A beginners guide to DOGE cryptocurrency

Dogecoin is a cryptocurrency that was created in 2013 as a joke but quickly gained a following and has been used for some legitimate transactions. In this guide, we will explain what Dogecoin is, how it works, and how you can use it. We will also discuss some of the risks and benefits associated with Dogecoin. By the end of this guide, you should have a good understanding of how Dogecoin works and whether or not it is right for you.

Dogecoin was birthed from the funny and unique culture of the cryptocurrency community as a whole, which started to develop in 2009 with Bitcoin’s release. After Bitcoin — a Blockchain-based asset able to teleport and store value — came an influx of other digital assets that advertised other advantages, such as additional privacy.

Bitcoin’s code is open-source, which has allowed other projects to create separate crypto assets and blockchains. After Litecoin (LTC) and Lucky-coin (LKY) were created based on Bitcoin’s code, software engineers Billy Markus and Jackson Palmer quickly used the code of Lucky-coin to form Dogecoin.

After creating Dogecoin, Palmer and Markus left the project. In 2015, Markus sold all of his Dogecoin for around the same value as a used Honda Civic.

Dogecoin use cases

The Dogecoin community has been active for years, but online hype around the asset propelled its price to new heights in 2021. The coin itself does not have any especially notable features that would suggest it might take over as the world’s dominant currency or store of value.

The main reason that Dogecoin cannot become a mainstream currency is because there is no limit to the maximum coin supply. Every day, 14 million additional Dogecoins are mined, which has an inflationary effect on the asset’s value. In contrast, Bitcoin (for example) comes with a fixed 21 million coin maximum supply, giving it defined scarcity.

Dogecoin can be used a currency for tips or payments, both online and offline. Its price is much lower than other crypto assets like Bitcoin, allowing users to work with whole numbers rather than fractions.

DOGE appears to have potential as a transactional asset due to its lower unit price and transaction speed. The coin’s popularity and community make it relatable for the mainstream, but it is possible that DOGE will fail like many other fads before it.

Dogecoin is faster than Bitcoin because blocks are generated on Dogecoin’s blockchain every minute, while it takes Bitcoin 10 minutes to generate a block. Even though each blockchains’ individual blocks are one megabyte in size, this means that more total information can be stored in Dogecoin’s chain over the course of time. In addition, people have commented negatively on Bitcoin’s speed in transaction past years; however, many now see it as more of an asset to store value.

Price history

Dogecoin’s value has always been small, typically trading for less than $0.01 per coin. In early 2018 there was a surge and the price hit around $0.018, but it soon after fell back down close to its original value within a few months.

Dogecoin’s price recovered in early January 2021, peaking back above the $0.01 mark for a brief time. The altcoin also experienced an impressive price rally at the end of January, spiking up to around $0.07 per coin within just 48 hours.

After a few days, the asset jumped up to $0.088 per coin. However, it then took a drop down to $0.04 before bouncing back weeks later and climbing rapidly upwards in price. By May 2021, Dogecoin was being traded at just under $0.74 – almost double what its starting value had been months earlier! This sharp increase is thought to be due largely in part to the high demand created by individuals who were eager to get their hands on the currency, as well as positive community feedback around Dogecoin itself.

Community and hype

In 2020, the social media platform TikTok saw users give Dogecoin significant attention in an effort to get people to buy the asset, with hopes that the coin’s price would increase. In 2021,Dogecoin garnered even more interest , including attention from a WallStreetBets member. (The group is notoriously Reddit-based and was responsible for affecting Gamestop stock prices early on in 2021).

January 2021 saw a surge in the GameStop stock price. Around this time, Twitter user “WSB Chairman” posted a tweet wondering if Dogecoin had ever reached the $1 mark. In response to the tweet, Dogecoin’s price rose to approximately $0.07.

One reason Dogecoin became popular in 2021 was because of Tesla CEO Elon Musk’s twitter posts about the coin. He would tweet anything from developmental comments to pictures with Simba’s head pasted on a doge dog’s body (from The Lion King). Social media platforms, such as Reddit, have become hotspots for talking about Dogeoin.

Dogecoin was all the rage in 2021, with searches related to the digital asset flooding Google, a significant amount of chatter on Twitter, and mainstream media coverage. On some days, trading volume for Dogecoin rose past that of Bitcoin, with billions of dollars worth of the coin traded.

Dogecoin’s first few years were pretty eventful, with stories of hacks, Dogecoin-painted racing vehicles, and more. One tale that stands out is how donations via Dogecoin helped fund Jamaica’s national bobsled team for its 2014 Sochi Olympic run.

How to buy, sell and where to spend DOGE

How to buy and sell DOGE

Trading Dogecoin is very similar to other large cryptocurrency investments. There are many exchanges that one can use in order to buy or sell the coin. This includes a number of exchanges that accept United States currency. In order to buy DOGE, you have to first transfer money from your fiat currency account (U.S dollars, for example) into a crypto exchange. Once the funds are available on the exchange, you can then purchase the Dogecoin with those funds . Users also have the option of selling their DOGE and receiving cash or another form of cryptocurrency off of the exchange

People can buy and sell DOGE in person or online. The process is similar to that of Bitcoin. A variety exist on which parties can buy DOGE, some allowing purchase via debit or credit card.

To learn more about how to buy and sell Bitcoin see: How to buy Bitcoin: A step-by-step guide and/or read our article on How to sell Bitcoin

How to store DOGE

Another important thing to consider is where you will store your Dogecoin. Some people keep them on the cryptocurrency exchange where they bought the coins, but this could mean less control over your money.

Dogecoin holders have the option of storing their coins in a personal, self-hosted wallet for more security and responsibility. These wallets come with greater security and responsibility, but provide users more versatility in terms of storing their funds. Hardware and local wallets serve as two potential options. A user’s wallet of choice must be capable of holding Dogecoin, however. Storing DOGE off a crypto exchange requires sending the coin to the desired wallet from the exchange

Where to spend DOGE

DOGE holders have the option to sell their DOGE for cash or fiat. They can also do this by uploading it to a crypto card and in turn, spending the Dogecoin they’ve gotten from the sale.

Not only that, but the Dallas Mavericks of the National Basketball Association (NBA) began accepting Dogecoin as payment for merchandise and tickets in 2021.

Fundamentals behind DOGE

Dogecoin updates are easily accessible and regularly publicised on the asset’s Github page.

Dogecoin’s fees are considerably lower than many other crypto assets, making it an appealing option for those looking to invest. For example, in May 2021 the average Dogecoin transaction fee cost just $2.52 – a fraction of what you would pay for similar transactions elsewhere.

While a small percent of DOGE owners could cause price waves, the majority of the assets are held in wallets belonging to only 20 people.

In terms of Dogecoin mining, a large amount of DOGE is expected to enter the ecosystem through mining, causing inflation.

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