What is Dogecoin? Dogecoin is a type of cryptocurrency. Cryptocurrencies are digital currencies that are not tied to any country or central bank. So, this cryptocurrency is independent and not affected by inflation in the world. This cryptocurrency has very high fluctuations and includes investments in the high risk category.
Dogecoin itself is a currency that has a picture of a shiba inu dog as its logo. The technology of Dogecoin is basically derived from Litecoin. This feature of Dogecoin uses the scrypt algorithm. The advantages of Dogecoin are its low price and unlimited supply.
History of Dogecoin
Dogecoin was originally created by Jackson Palmer, a product manager at the Adobe Inc office. in Sydney, Australia, in 2013. He created Dogecoin as a way to satirize the hype surrounding cryptocurrency. Palmer has been known to be a “skeptic-analytic” observer of emerging technologies and his tweets about cryptocurrencies are straightforward. The many positive responses on social media about dogecoin made him buy the domain dogecoin.com.
Meanwhile in Portland, Oregon, Billy Markus, a software developer at IBM wants to create a digital currency, but has trouble promoting his business. He then found buzz Dogecoin. After that, Markus contacted Palmer to get permission to build the software behind Dogecoin.
Markus coded Dogecoin on Luckycoin, which is a derivative of Litecoin. He originally used dogecoin as a random reward for every mining in the cryptocurrencies. However, in March 2014, he used Dogecoin as a permanent reward. Dogecoin uses the scrypt technology of another crypto coin called Litecoin.
Palmer and Mark then launched Dogecoin on December 6, 2013. Two weeks later, on December 19, 2013, the value of Dogecoin jumped 300 percent. The increase was possible because China banned its banks from investing in cryptocurrencies.
Dogecoin Awakening
Dogecoin markets itself as a “fun” version of Bitcoin with the Shibu Inu (Japanese dog) logo as its logo. Dogecoin’s casual look fits well with the atmosphere of the burgeoning crypto community. Scrypt technology and an unlimited number of them make Dogecoin a faster, more adaptable and consumer-friendly version of Bitcoin.
Dogecoin is an “inflation coin”, whereas cryptocurrencies, such as Bitcoin are deflationary in that there is a limit to the number of coins to be created. Every four years, the number of Bitcoins released into circulation through mining rewards is halved and the inflation rate is halved along with it until all coins are released.
In January 2014, the Dogecoin community donated 27 million Dogecoins worth approximately $30,000 to fund the Jamaican sled team’s trip to the Sochi Winter Olympics.
Then, in March 2014, the Dogecoin community donated $11,000 worth of Dogecoin to build a well in Kenya and $55,000 of Dogecoin to sponsor NASCAR driver Josh Wise.
Dogecoin vs Bitcoin
Dogecoin has some significant differences compared to Bitcoin. First, it’s faster and easier for miners to solve mathematical equations that solve and record transactions on transactions, which makes Dogecoin somewhat more efficient at processing payments.
“Where it takes 10 minutes for the process to ratify a new block on the Bitcoin blockchain, it only takes a minute on the Dogecoin blockchain,” said Gary DeWaal, Chair of Katten Financial Markets and Regulations group.
Another significant difference is that there is no limit to the number of Dogecoins created, as we mentioned above. There is a lifetime limit of 21 million Bitcoins which limits the maximum number of coins that can be created
This means that miners are forced to work harder and longer over time to earn new Bitcoins. To some extent, this helps ensure Bitcoin’s ability to maintain and grow in value over time.
How to Buy Dogecoin (DOGE)
To be able to buy DOGE, you can buy it on a cryptocurrency exchange, such as Binance or Kraken. To get Dogecoin, you have to exchange it for fiat currency or other cryptocurrencies, such as bitcoin, ethereum, and others.
Several online brokers, including Robinhood and TradeStation, also provide services for buying Dogecoin in addition to conventional assets, such as stocks, mutual funds, and bonds. They don’t offer as many cryptocurrencies as exchange tools, but generally dogecoin is available there.
As with other cryptocurrencies, once you buy Dogecoin, it’s a good idea to move the coins you have to a crypto wallet. Crypto wallets take many forms, from online services offered by exchanges, such as Coinbase (although you can’t buy Dogecoin on Coinbase, you can store it in your Coinbase wallet).
You can also store Dogecoin in apps on your mobile device or even a physical hard drive. You can secure your wallet with a personal password that you can set. Since the coins you own are stored off-exchange, there is an extra layer of protection against hacking.
Before dogecoin was popular today and its price skyrocketed, you used to be able to get dogecoin coins for free by doing easy tasks online.
“For years, you could do errands on the Dogecoin ‘tap’ to get Dogecoin instead of buying it,” said C. Neil Gray, partner in the fintech practice area at Duane Morris LLP.
“Her duties include things like watching commercials or taking surveys. Recently, it has become difficult to find those jobs,” Gray continued.
Is Dogecoin a Good Investment?
Since there is no lifetime limit on the number of existing Dogecoins and millions of new Dogecoins are released to the market every day, there is little incentive to hold the cryptocurrency long term.
While other cryptocurrencies, such as Bitcoin, continue to increase because the number of bitcoins is very limited compared to Dogecoin which has an unlimited number.
“Dogecoin is actually less like Bitcoin and more like DASH or Bitcoin Cash, where the main goal is a spend currency,” said White, a CEO of Bitwave.
Historically, the value per coin of Dogecoin has been so low, around $0.003 per coin for much of 2020, that people are more likely to give it away than sell it.
“Users on social platforms, such as Reddit, Twitter, Facebook and others, can use Dogecoin to reward, or tip each other for any content posted on social media,” said Gray.
The gains in Dogecoin already seen in 2021 may not be sustainable in the long term. Whether the culture of crypto tipping and donations will continue remains to be seen.
Closing
That was a brief understanding of what Dogecoin is to a brief explanation of whether Dogecoin is a good coin as an investment. As with other cryptocurrencies, investing in Dogecoin requires careful calculations and uses cold money because it is a high risk type of investment.
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Author: Muhammad Zaki Fajrul Haq
Follow me at @mzfajrulhaq (Instagram) or @ZakiFajrul (Twitter).