Dogecoin – Dogecoin is a cryptocurrency, similar to Bitcoin and Ethereum, but in a very different way. Dogecoin was conceived with the name of a once-popular meme, a lighthearted joke among crypto enthusiasts. Despite its strange origin story, Dogecoin has exploded in popularity in 2021, becoming the fifth-largest cryptocurrency as of this writing.
What is Dogecoin?
Late in 2013, a coder named Jackson Palmer and a businessman named Billy Marcus created Dogecoin. Palmer purposefully misspelled the word “doge” to describe a Shiba Inu dog in a popular meme at the time in order to brand the cryptocurrency.
According to Pat White, CEO of Bitwave, Doge began to mock Bitcoin. Among other publicity stunts, the community raised funds for the Jamaican Bobsleigh Team to attend the 2014 Olympics and sponsored NASCAR drivers.
It achieved cult status on Reddit’s WallStreetBets message board in 2021, which was the cause of GameStop’s problems in January, where enthusiasts predicted it would soar “to the moon” (before cryptocurrency discussions were banned).
It has increased in value by over 5,000% since 2021 and is not a joke. Elon Musk, CEO of Tesla, is one of cryptocurrency’s most vocal supporters. According to Musk, a physical Dogecoin token will also be planted on the moon.
How Does Dogecoin Work?
Dogecoin, like Bitcoin and Ethereum, is based on blockchain technology. This decentralized ledger keeps track of all digital currency transactions that occur on a distributed, secure ledger.
The blockchain ledger is frequently updated with all new transactions, ensuring that each holder has identical copies. All Dogecoin transactions, like those of other cryptocurrencies, rely on cryptography.
The Dogecoin blockchain is a decentralized database in which transactions are recorded using computers called miners and complex mathematics. Miners earn additional Dogecoins for holding or selling by supporting the blockchain ledger and processing transactions.
It can be used to make payments and purchases, but it is not ideal for storing value. The high inflation rate is due to the fact that there is no lifetime limit on the number of coins that can be created by mining. The blockchain rewards miners for their efforts by generating millions of Dogecoins every day, making it difficult to maintain extreme price gains in Dogecoin.
Dogecoin: How to Purchase
Dogecoins can be purchased on cryptocurrency exchanges such as Binance or Kraken. To use the exchanges, you must have a US dollar or cryptocurrency account. A cryptocurrency exchange, as well as Dogecoin, are then available. Dogecoin cannot be purchased on major cryptocurrency exchanges such as Coinbase.
In addition to stocks, bonds, mutual funds, and ETFs, some online brokers, such as Robinhood and TradeStation, allow you to purchase Dogecoin. Dogecoin is widely available, though not as widely as exchanges.
As with other cryptocurrencies, it is best to transfer it to a crypto wallet as soon as you receive it. Dogecoin can be stored in a variety of wallets, ranging from exchanges (you can’t buy it on Coinbase, but you can store it in your Coinbase wallet) to apps on your mobile device or even on your computer. Passwords are used to keep the wallet secure. Because an exchange does not keep your coins, they are more secure against hacking.
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Dogecoin was once free to earn before breaking into the mainstream and skyrocketing in value.
Dogecoin was traditionally earned rather than purchased by completing tasks at ‘faucets.’ He is a partner in the fintech practice group at Duane Morris LLP. Among the tasks were things like watching commercials and filling out surveys. The number of skilled laborers has decreased in recent years.”
Do Dogecoins Make Good Investments?
Dogecoin has no lifetime limit, and millions more are released every day, making long-term holding inefficient. Because there is a lifetime limit on the number of coins that can be created, Bitcoin’s value continues to rise.
Doge, unlike Bitcoin, is designed to be used as a spending currency rather than a digital currency like DASH.
Historically, it has been extremely cheap per coin, hovering around $0.003 for the majority of 2020. As a result, it was most likely given away as a gift. The cryptocurrency was created to reward, or “tip,” users who shared content on social media platforms such as Reddit, Twitter, and Facebook.
After the gains seen in 2021, it may not be able to sustain the gains in the long term. We have yet to see if crypto’s tipping and donating cultures will continue.
Those who invested in Dogecoin will have reaped the benefits by 2021. Nonetheless, White is wary of investing in Dogecoins. Adding new coins to the market drove their value down over time.