Dogecoin is a cryptocurrency created as a joke by software programmers Billy Markus and Jackson Palmer and made fun of the cryptocurrency speculation at the time. Dogecoin is a popular cryptocurrency among crypto newbies. It is based on an internet 'meme' (a witty or memorable online phrase or image). Even though Dogecoin was underestimated, it still stands as a faster and cheaper alternative to Bitcoin.
So, what is Dogecoin? What are the benefits and shortcomings of Dogecoin? How is it different from other cryptocurrencies? Let’s look at all of this together in the article below.
What is Dogecoin?
DOGE (Dogecoin) is an open-source, peer-to-peer cryptocurrency considered an altcoin and a snarky meme coin. The Shibu Inu, a species of a Japanese dog, has since been adopted as the cryptocurrency's mascot. Even though it was created as a joke, Dogecoin's Blockchain still retains its value because the technology supporting it is centred on Litecoin. Some of the notable aspects of Dogecoin include its low price and the limitless supply of Dogecoin, which uses the script algorithm.
The Rise of Dogecoin
With a Shibu Inu (Japanese dog) as its emblem, Dogecoin marketed itself as a "fun" prospect to Bitcoin. The relaxed display of Dogecoin matches the sentiment of the emerging crypto community. Furthermore, its encryption technology and unlimited products have been used to strive for a faster, more adaptable and consumer-friendly Bitcoin.
Dogecoin is an "inflation coin", and Bitcoin and other cryptocurrencies are deflationary due to the limited number of coins created. The number of Bitcoins circulating through mining rewards is halved every four years. Therefore, the inflation rate is also halved until all coins are used up. Nevertheless, the Dogecoin community-contributed 27 million Dogecoins, or about $30,000, in January 2014 to help pay the Jamaican bobsled team's journey to the Sochi Winter Olympics. The Dogecoin community also donated $11,000 worth of Dogecoin to build a well in Kenya in March of that same year and a $55,000 price of Dogecoin to support NASCAR driver Josh Wise.
How Dogecoin Works
Dogecoin can be a cryptocurrency that, like Bitcoin and Ethereum, is predicated on blockchain technology. Blockchain is a decentralized digital ledger that keeps all transactions carried out with decentralized digital currency distributed and secure. The Dogecoin Blockchain record, usually updated with all new transactions within the cryptocurrency, is carried by all holders in a uniform copy. The Blockchain network of Dogecoin, like other cryptocurrencies, uses encryption to keep all transactions secure. Thus, miners use computers to unravel complex mathematical equations to process transactions and record them on the Dogecoin Blockchain—a so-called "proof of work" system. As a result, miners accept more Dogecoin to process transactions and support the Blockchain ledger, which they store and sell on the open market.
Advantages of Dogecoin
- The transaction fees for Dogecoin are pretty low and faster, where it roughly takes around a minute.
- Initially, the coin was limited to 100 billion but was replaced with an unlimited supply.
- You can day-trade Dogecoin and earn profit by taking advantage of its instability.
- DOGE has a SCRYPT in its algorithm, which has made the cryptocurrency have a relatively faster processing speed, unlike BTC.
Disadvantages of Dogecoin
Just like every other investment, you are investing your money into Dogecoin is not risk-free. So here are the things you must know about the risks of investing in Dogecoin.
- Dogecoin possibly will not be a long-term investment.
- Dogecoin depends only on its fun nature and not any real innovation
- Dogecoin is inflationary but has no staking reward
- Unlike every other cryptocurrency, Dogecoin does not burn coins.
How to Buy Dogecoin
Dogecoin can be purchased on a cryptocurrency exchange such as Tradefada, Binance, Kraken, and a lot more. So, you need to create and fund an account with fiat currencies or cryptocurrency on the exchanges. After that, you can purchase and sell cryptocurrencies, including Dogecoin. In particular, the popular cryptocurrency exchange Coinbase does not allow the purchase of Dogecoin. In addition to native assets such as stocks, mutual funds, and bonds, certain online brokers such as Robinhood and TradeStation enable you to buy Dogecoin. Even though they don't have as many cryptocurrencies as traditional crypto exchanges, Dogecoin is extensively accessible.
Once you've purchased Dogecoin, you should send your coins to a crypto wallet, just like you would do with any other cryptocurrency. Wallets have many shapes and sizes, from the online services provided by exchanges such as Coinbase. Although you can purchase Dogecoin on Coinbase, you can store it in the mobile application or even physical hard drives in the Coinbase wallet. The private password is used to protect the wallet. Since your tokens are not stored on the exchange, the security level against hackers can be improved.
What is the Present status of Dogecoin?
If Dogecoin began out as a joke, the figures that support it are deadly serious. Since the beginning of 2021, the value of Dogecoin has increased by more than 14,000 per cent. Dogecoin's price is now about 0.60$, with a market capitalization of around $78 billion according to the price-tracking website CoinMarketGap, making it the fourth-largest cryptocurrency. However, market capitalization is still a minor player compared to the big two: Bitcoin ($1.1 trillion) and Ethereum ($405 billion), with Binance Coin valued at just under $100 million.
No one can predict what Dogecoin will become. It may be a currency or a commodity, a fad or a revolution, money's future, or a complete waste. What I do know is that Dogecoin, now that it's joined a legion of so-called "altcoins" in the aftermath of Bitcoin's surging price, might be the same. With a total market value of $1,621,559 based on the exchange Coined Up pricing, Dogecoin is now the 24th most expensive altcoin. However, it might be worth significantly more elsewhere.
However, having gone through this article and you want to invest in Dogecoin, Tradefada is here for you. We run a trusted and reliable exchange spot where you can buy and trade your coin.
Kindly log on to www.tradefada.com to start trading.