The Perfect Beginner’s Guide on Dogecoin

The Perfect Beginner’s Guide on Dogecoin

Dogecoin

What comes into your mind when you hear the word cryptocurrency? Well, I guess it’s Bitcoin. As much as it is the commonly known cryptocurrency, it is not the only one. There are more hundreds of other cryptocurrencies, Dogecoin being one of them.

In this guide, I’m going to share with you information about Dogecoin, how it started, how it’s being used, how you can get it, and why it is popular. That being said, the next time someone asks you, “what is Dogecoin?”, you will have proper feedback.

In addition, after going through this guide, you will also be able to purchase for yourself some Dogecoin, and also know where to keep it. So, let’s start!

The Story of the ‘Meme’ coin

The story of dogecoin goes back to December 2013, at a time when one Bitcoin was valued at $1,083.14. The world had started paying keen attention to cryptocurrencies. Billy Markus from Portland, Oregon, together with his friend Jackson Palmer from Sydney, Australia, thought that cryptocurrencies were being taken too seriously. Therefore, they decided to come up with their coin.

Dogecoin, or popularly known as DOGE, was launched on the 6th of December, 2013. A popular meme of a Shiba Inu dog has been used as its mascot since its launch. The way it’s pronounced and spelled is borrowed from a puppet show on the internet.

Interestingly, what began as a little joke has turned out to be a huge crypto community. For good reasons, Dogecoin has earned itself a name as the “friendly” coin.

Fans of Dogecoin refer to themselves as Shibes! They even have come up with a Shibe language, made up of funny broken English phrases and terms such as “much grateful”, “such amazing” and “many works”.

Now you know a bit about what Dogecoin is. Let’s check how it’s used.

How is Dogecoin Used?

Dogecoin is mainly used in the Dogecoin community to support good causes across the world. Here are some of the notable causes that the Dogecoin community supported:

  • In the year 2014, the Dogecoin community helped the Jamaican Bobsled Team to be part of the Sochi Winter Olympics by raising $50,000.
  • During the World Water Day on March 22nd, 2014, loyal members of the Dogecoin community built clean-water wells in Kenya by raising $30,000.

There is huge followership of Dogecoin on social media. In Reddit, there is a lively Shibe community that tips each other with DOGE for sharing good quality content. The platform is also used to raise money to advance good causes such as those shared above. Some of the Dogecoin charities that are hosted on Reddit include DogePizaa and SocksForTheHomeless.

Now that you the history of Dogecoin and how it’s used, let’s look at the numbers and get to know how big it is.

What is Dogecoin Worth?

The answer is…not very much. As of today, 09/10/2021, one Doge is worth $0.2477 only!

Nonetheless, there is no supply limit on Dogecoin. This implies that the amount of Dogecoin is unlimited and as such, its price will not increase as much as its competitors like Bitcoin and Litecoin, whose supply is limited.

For your information, there will ever be only 21 Million Bitcoins. Be as it may, the number of Dogecoin in circulation right now is around 129 billion (as of May 2021). This positions Dogecoin as a great alternative for small transactions, the reason why its commonly used for donations and tipping.

So, as much as the price of one Dogecoin is less than 1 cent, Dogecoin still has significant worth. As at the time of writing this article, it had a marketing cap of $32.706B

Market Cap: Also known as market capitalization, is the total number of coins on the market worth.

Important

The numbers are quite impressive…right? But how exactly does the Dogecoin transaction work? Let’s take a tour.

The Technology Behind Dogecoin

Well, all cryptocurrencies function on a technology called a blockchain. Blockchains are ledgers (or huge digital databases) that store transaction information. The Dogecoin blockchain stores every transaction that’s made using a Dogecoin.

However, blockchain information is not stored in one place. Thousands of computers called nodes are used to store blockchain information. This is where blockchains derive their name as decentralized networks. They do not operate on a centralized server.

Let’s have a look at how a real transaction works on the Dogecoin blockchain. I will use two characters Bethwel and Joan as examples.

Bethwel lives in Singapore. Joan lives in France. Imagine that Bethwel wants to send Joan some money without using a bank or paying any exchange rates. Bethwel decides to use Dogecoin.

1. Bethwel sends 20 DOGE to Joan.

2. The nodes (computers) on the Dogecoin blockchain crosscheck to ensure Bethwel has 20 DOGE to send. If more than half of all the computers on the blockchain network agree that Bethwel has 20 DOGE to send, then the transaction can be completed. The transaction can now be added to the ledger (blockchain).

3. Joan receives 20 DOGE.

The nodes (computers) get a reward of a new Dogecoin for checking transactions. This is what is popularly referred to as mining. Let us take a look at Dogecoin mining.

Dogecoin Mining

When a computer attempts to check and confirm a Dogecoin transaction, it is listed in a form of a lottery. This lottery entails guessing a code that is assigned to the newest transaction block that’s added to the blockchain. The node that guesses the correct code is rewarded 10,000 DOGE.

The Dogecoin lottery takes place once every minute. This implies that a new block of Dogecoin transactions is checked and confirmed every minute.

The transaction time for Dogecoin is much faster compared to either Litecoin or Bitcoin. This is another reason that has shot it up into fame as a quick online donation or tip.

For the transaction example to work, Bethwel and Joan would need more than just the Dogecoin blockchain. Both of them will also require a Dogecoin wallet. Now that you are aware of Dogecoin mining, let’s take a dig and explore what a Dogecoin wallet entails.

Dogecoin Wallets

A cryptocurrency wallet or otherwise known as a crypto wallet is not the same as the real wallet that keeps metal coins and paper money for you. Cryptocurrencies are digital and only exist on computers. You keep the information you need to use your cryptocurrencies in a crypto wallet. This information includes private keys and public keys.

A public key can be compared to an email address where cryptocurrency can be sent. It is visible to everyone on the network. A private key can be compared to a password for that email address. You must safeguard your private keys!

You can choose any of the four types of Dogecoin wallets that are available:

Hardware wallets: Just from their name, they are removable hardware devices, such as USB sticks. They can be quite pricey. On amazon, a Ledger Nano is $150.00 and a Keepkey is $39.99. Despite being pricey, they are a safe and secure way to keep your Dogecoin.

Online wallets: Wallets such as Dogechain give you an allowance of using the Dogecoin blockchain without necessarily keeping any of it on your personal computer.

Paper wallets: These wallets are printable and you can hold them in your hands. It is a secure way to keep your Dogecoin. You can use sites such as Wallet Generator to make a paper wallet.

Software wallets: Dogecoin offers you two software wallets that you can download.

  • Dogecoin Core: This is heavy and contains the entire Dogecoin blockchain. It may need some time to fully download. When you download this, your computer becomes a Dogecoin node.
  • MultiDoge: This is light when compared to Dogecoin core. This means it has sufficient information to enable the use of Dogecoin, but your computer won’t be a full node.

Quick Tip: To help you avoid losing all your Dogecoin in case someone was to hack your wallet, it is recommended to use a mix of different wallets.

Dogecoin Exchanges

There are websites where you can sell and buy cryptocurrencies. They are known as cryptocurrency exchanges. So, what is the best Dogecoin exchange? The best exchanges are Bit-Z and Bittrex.

Above all, Binance remains the best place to purchase a Dogecoin. Binance offers excellent security features and several different crypto coins for you to exchange and trade.

Quote: The total amount of coins that have been purchased and sold in a day is referred to as 24-hour trading volume.

You will be charged some fees when you use a coin exchange. If you want to collect free Dogecoin for yourself, you can visit a Dogecoin faucet. These are websites where you can complete certain tasks in exchange for free Dogecoin. The tasks may range from filling in surveys, watching ads, to playing a lottery game.

Quote: Be very careful when using a Dogecoin faucet, exchange or wallet. This cuts across all cryptocurrencies.

So, is Dogecoin safe? Let’s find out.

Is Dogecoin secure?

Dogecoin has faced several security challenges since its launch.

#Dogewallet

Dogewallet, a Dogecoin wallet, was hacked on December 25th, 2014. The hackers made away with 21 million Dogecoin, an equivalent of about $12,000 at that time. I know what is running in your mind right now. Why would someone steal such cute dog coins on Christmas Day?

That said, the Dogecoin community or Shibes raised $13,000 to settle the user who lost money. What a gesture!

#51% Attacks

There is no doubt about the safety of blockchain technology. The one that Dogecoin operates on has never been hacked. Nonetheless, all blockchains stand a risk of 51% attacks.

A 51% attack is a term used to refer to when one person or a group controls more than half of a blockchain. If this happens, then that group or individual could add illicit transactions to the blockchain. This would be bad news for any cryptocurrency that falls victim to such an attack.

When Dogecoin was launched for the first time, it stood at risk of a 51% attack. To prevent this from happening, the developers designed a merged mining operation with Litecoin, in 2014. Dogecoin and Litecoin can now be mixed, making both networks to be safer and secure.

#Moolah

Ryan Kennedy, a member of the Dogecoin community, was apprehended in Britain for fraud. This was in September 2017. He had started a Dogecoin exchange called Moolah operating as Alex Green. Moolah went bankrupt and it is postulated that Kennedy may have made away with the user’s money.

The community had put their trust in Kennedy, and he had betrayed them. Jackson Palmer, one of the founders of Dogecoin, left his leadership position in April 2015. He hinted that one of the reasons why he left was tied to Kennedy and the Moolah bankruptcy case. 

These challenges imply two things:

1. The safety of blockchain tech is guaranteed, but the safety of add-ons that come with it isn’t guaranteed.

2. The Dogecoin community is intact and strong – It’s had its share of challenges but still matching on.

I’ve shared a lot about the past of Dogecoin. So, what is the future looking like for Dogecoin?

What is Dogecoin Going to do Next?

Major changes have not been done on Dogecoin since 2015. This implies that Dogecoin could lag in the crypto space. This explains why Shibes are moving from Dogecoin to more advanced platforms like Ethereum.

So, why have there not been any updates? Well, sadly, Dogecoin has only three developers who are part-time volunteers! One of Dogecoin’s core strengths is its fun-loving and relaxed community, which has also turned out to be a weakness since currencies are considered to be more professional.

Even the founder, Jackson Palmer, has mentioned that cryptocurrency is a bubble. He said that any tech that hasn’t received an update in three years isn’t worth millions of dollars.

Quote: A bubble: A product with a market value that is more than its real worth. When a “bubble” pops, its market value can decline quickly. 

Be as it may, it is not all bad. Ross Nicoll, one of the developers of Dogecoin, has said that he has been working on an update. This update would go a long way in improving the stability and safety of the platform. This could also mean an increase in the value of Dogecoin. 

Conclusion

Looking at the list of tech in the 21st century, blockchain stands out as the most important so far. It can make the world a better place. It’s easy to forget that since all that is talked about in the crypto space is the price of Bitcoin.

Dogecoin, on the other hand, is a blockchain party and everyone has been sent an invite, including you!

So, now that you have all this information about Dogecoin, why not check out the step-by-step guide on how to buy and sell Dogecoin?

Read also>>> A Beginner’s Guide on Smart Contracts on Blockchain

The content published on this website is not aimed to help you make any kind of investment, financial, trading, or any decision. Crypgainer.com does not endorse or suggest you buy, sell or hold any kind of cryptocurrency. Consult your financial advisor before making financial investment decisions.

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