What is Dogecoin? Beginners guide to DOGE cryptocurrency
Dogecoin (DOGE) is a cryptocurrency that was created in 2013 as a result of a comic inspiration rather than a pressing requirement to meet a specific use case. The “Doge” meme, which depicts a Shiba Inu — a Japanese dog breed — sitting with its paws folded over one other, was the inspiration for the cryptocurrency. The text covers the dog’s image, with phrases promoting illogical grammar.
Dogecoin was inspired by the wider cryptocurrency community’s hilarious and unique culture, which began to shape in 2009 with the launch of Bitcoin (BTC). Thousands of other crypto assets followed Bitcoin — a blockchain-based asset capable of moving and holding value — promising additional features such as increased privacy.
Bitcoin’s code is open-source, and it has been adopted by other groups to construct their crypto assets and blockchains. Following the creation of Litecoin (LTC) and, later, Luckycoin (LKY) based on Bitcoin’s code, software programmers Billy Markus and Jackson Palmer used the Luckycoin code to create Dogecoin, which took mere hours to finish.
Palmer and Markus left the Dogecoin project a few years after it was founded. Markus sold his Dogecoin holdings in 2015, with his holdings worth about the same as a used Honda Civic at the time.
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Use cases for Dogecoin
Dogecoin has had a devoted following for years, but the asset’s price skyrocketed in 2021 as a result of the hype around it. The coin itself, on the other hand, lacks any distinguishing characteristics that would suggest it might become the world’s dominant currency or store of value.
Why is it so difficult for Dogecoin to become a widespread currency? The supply of Dogecoin may be the primary factor. The maximum coin supply of the coin is unrestricted. Daily, 14 million extra Dogecoins are mined, causing the asset’s value to rise. Bitcoin, on the other hand, has a set maximum quantity of 21 million coins, ensuring its scarcity.
Dogecoin, on the other hand, has the potential to be used as a tipping or payment currency, both online and off. Itsseveralper-unit pricing in US dollars is significantly lower than that of other crypto assets, such as BTC, allowing users to operate with whole numbers rather than fractions of BTC.
On the one hand, due to Dogecoin’s lower unit price, popularity, and transaction speed, it appears to be a more feasible transactional asset than Bitcoin. DOGE’s community has also made the coin more accessible to the general public. However, the asset could follow in the footsteps of many prior fads, getting enormous public attention for a short period before failing to stay as a unique long-term solution for anything.
In terms of transaction speeds, Dogecoin’s technological nature puts it well ahead of Bitcoin. Every 10 minutes, blocks are mined on the Bitcoin blockchain. Each block on the Dogecoin blockchain takes only one minute. As a result, even though each block on the Dogecoin and Bitcoin blockchains is one megabyte in size, the Dogecoin blockchain generates more blocks in the same period. Although Bitcoin has become more widely recognized as a store-of-value asset, its transaction speed has been criticized in the past.
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Dogecoin has regularly traded for less than $0.01 per coin since 2013. Dogecoin’s price peaked at around $0.018 in early 2018, before plummeting to below a cent in the months and years that followed.
For a brief while in early January 2021, Dogecoin’s price rose above $0.01 again. Furthermore, Dogecoin experienced a significant price increase in late January, when it rose to around $0.07 per coin in a span of two daily candles or 48 hours.
After a few days, the asset was trading at roughly $0.088 per coin. The coin’s price consolidated for weeks after a drop to the $0.04 area, leading up to its swift upward price run. Dogecoin was trading for $0.74 in May 2021. The asset’s community of interested players, as well as the asset’s hype, appear to have fuelled this extraordinary price surge.
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Hype and community
In 2020, members of the social media platform TikTok drew attention to Dogecoin in an attempt to get people to buy the cryptocurrency in the hopes of it rising in value. In 2021, Dogecoin attracted a lot more attention, particularly from a member of the Reddit-based community WallStreetBets. (The group is well-known for influencing the price of Gamestop shares in early 2021.) A Twitter user titled “WSB Chairman” wrote a tweet around the time of the GameStop stock price jump in January 2021, wondering if Dogecoin had ever surpassed the $1 price point. Following the tweet, the price of Dogecoin increased to around $0.07.
The Dogecoin-related tweets posted by Tesla CEO Elon Musk may have also contributed to Dogecoin’s popularity in 2021. Musk’s head was pasted on Rafiki’s body, and the head of the Doge dog was pasted on Simba’s body, in a picture of a Rafiki holding up Simba (from the movie The Lion King), with Musk’s head on Rafiki’s body and the head of the Doge dog pasted on Simba’s body.
Reddit, among other social media platforms, is a hotbed for Dogecoin discussion. Dogecoin-related searches flooded Google during its 2021 bonanza, Twitter hosted a significant amount of Dogecoin-related chatter, and mainstream media covered the digital asset. In 2021, Dogecoin’s single-day trading volume surpassed that of Bitcoin on at least one occasion, with billions of dollars worth of the coin traded.
The years following Dogecoin’s launch were tumultuous, with hacks, Dogecoin-painted racing cars, and more. One of the stories is about how Dogecoin donations helped fund Jamaica’s national bobsled team for their 2014 Olympic run in Sochi.
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How to purchase, sell, and spend DOGE
1. What is the best way to buy and sell DOGE?
Purchasing and selling Dogecoin is similar to purchasing and selling most other well-known crypto assets. Numerous cryptocurrency exchanges, including a number of US-friendly exchanges, are available to buy or sell the dog-themed coin on the market. To acquire DOGE on a crypto exchange, you must first send fiat currency (such as US dollars), stablecoins, or other crypto assets to the exchange, and then use those funds to purchase the coin. Users can also sell DOGE on the exchange and send cash or cryptocurrency.
In addition, anyone interested in buying or selling DOGE can do so in person. Buying and selling Dogecoin is identical to buying and selling Bitcoin. There are a variety of platforms where people can buy DOGE, some of which accept credit cards.
2. What is the best way to store DOGE?
The topic of storing Dogecoin holdings is also worth discussing. Users can keep DOGE on the cryptocurrency exchange where they bought it, albeit this technique may provide them less control over their cash.
Dogecoin owners can also save their coins in a self-hosted, personal wallet. These wallets come with extra security and accountability, but they also give consumers more options for holding their money. Two such possibilities are hardware and local wallets. However, a user’s preferred wallet must be capable of handling Dogecoin. Storing DOGE on a crypto exchange necessitates transmitting the coin from the exchange to the desired wallet.
3. Where should DOGE be spent?
What can a DOGE possessor do with it? Sending it to a crypto exchange, selling it, and then cashing out or transferring the proceeds is one approach. Users can even sell DOGE for fiat while downloading it to their crypto card, thereby spending Dogecoin earnings. In addition, in 2021, the Dallas Mavericks of the National Basketball Association (NBA) will accept Dogecoin payments for merchandise and tickets.
Theoretical underpinnings of DOGE
On the technological front, Dogecoin has received regular modifications throughout the years, which have been made public on the asset’s Github page.
Aside from its development, Dogecoin’s expenses continue to be a selling factor. The average Dogecoin transaction fee was around $2.52 in May 2021, which was a high point in terms of prior and future values. When compared to transaction costs observed in other cryptocurrencies, such fees are relatively minimal.
However, a tiny number of DOGE owners could cause price fluctuations in the future. Despite its enormous quantity, Dogecoin boasts a vast number of wallets that hold a big share of the entire coin supply. Around 20 Dogecoin wallet addresses own about half of the total supply of the commodity.
In terms of Dogecoin mining, large amounts of DOGE are projected to continue to flow into the ecosystem, generating inflation.