What is Dogecoin?

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Dogecoin is arguably one of the most popular cryptocurrencies this year, following a series of bull runs thanks to its solid fan base and Elon Musk. You certainly don’t have to be a crypto nerd to hear the word “Dogecoin” tossed around on a few occasions by various people. However, not everyone knows what dogecoin cryptocurrency is all about, why it was created, or how to buy it.

As a result, we have compiled things you need to know about Dogecoin and what to watch out for before you add it to your list of digital assets. In this guide, you will learn how you can buy dogecoin, how to mine dogecoin, and how to use Dogecoin. Today, dogecoin digital currency is ranked the 8th-largest cryptocurrency on Coinmarketcap.

What is Dogecoin?

Dogecoin is a community-based, open-source digital currency that runs on its blockchain. It is a hard fork (or copy) of Luckycoin, which is a copy of the Litecoin blockchain. If you are new to cryptocurrency, you can visit our previous post to understand how it works.

Dogecoin is in many ways similar to Bitcoin as they both run on a distributed ledger called Blockchain. However, DOGE takes lesser time to mine as opposed to Bitcoin. Another interesting fact about Dogecoin is that it is inflationary, meaning that it has an infinite supply.

For instance, Bitcoin has a maximum cap of 21 million, and no more of those 21 million BTC can ever be created. On the contrary, there is no limit to the amount of DOGE that traders can mine. As of date, there are over 130 billion Dogecoins in circulation, and many more will continue to be created.

Dogecoin is known for its committed community of supporters. Asides from this, the cryptocurrency has major draws like its low price, speed, and short-term price movement. Due to increased mainstream adoption and several public endorsements, dogecoin has risen above a market cap of about $25 billion.

Despite the recent popularity and meteoric price surge, Dogecoin creators didn’t plan dogecoin to become what it has turned out to be. It was developed as a satirical project to mock the rise in the popularity of Bitcoin and other cryptocurrencies. To know more about Dogecoin, let us have a backdrop by starting with how Dogecoin was created?

When was Dagecoin Created?

Dogecoin was created by two software engineers Billy Marcus and Jackson Palmer, in December 2013, who started as a joke. The creators intended to make a parody of Bitcoin when cryptocurrency started to amass popularity. Dogecoin got its name from the viral image of Shiba Inu Dog (a Japanese dog breed), which later became its logo.

At first, people used DOGE to tip creators for completing specific online tasks like creating content on Twitter or Reddit. After a short while, the meme-inspired cryptocurrency garnered huge followers that later became very loyal ones. Not only are they allegiant to the cryptocurrency but also generous.

In the first quarter of 2014, the community contributed 14 million Dogecoins worth approximately $11,000 to help Kenyans get clean drinking water. Another notable deed was when they donated $30,000 worth of Dogecoin to sponsor the Jamaican bobsled team’s trip to the Olympics that same year. They have also done many more laudable humanitarian acts even without a central authority.

Dogecoin also benefitted from the 2017 bull run as its market cap broke the $1 billion barriers. However, things got a little exciting for the Dogecoin community and the crypto itself when Musk took an uncanny interest in it. At some point, Elon Musk referred to himself as the “Dogefather” alongside other seemingly promotional comments, which in turn drove prices higher.

Musk was also interviewed on Saturday Night Live Show over his obsession with Dogecoin. Whenever Musk commented on the coin, prices always shot upwards. Elon Musk’s act and many more have contributed to the extreme price action of the cryptocurrency this year. The surge was also due to Dogecoin’s ever-enthusing fans that always looked for opportunities to pump its price.

Surprisingly, the hype and attention pushed Dogecoin higher to the top ten cryptocurrencies. The market cap of Dogecoin grew six-fold from December 2020 to January 2021, a remarkable feat while most altcoins are still struggling to keep afloat. Dogecoin received special mainstream attention when Bitcoin consolidated for weeks.

DogeCoin Mining: how to Mine Dogecoin?

Dogecoin uses Proof-of-work (PoW) consensus mechanism to validate and update new blocks to its blockchain network. Proof-of-work refers to a process where miners attempt to solve a complex mathematical puzzle to add new blocks to the blockchain (mining).

But how hard is it to mine Dogecoin, how long does it take to mine Dogecoin, and how can you get involved in Dogecoin mining? These and many more are the questions we get from people, especially newbies, and we will try our best to answer them in this article. You can catch up on how cryptocurrency works on our blog.

To start with, mining Dogecoin is much easier and faster than mining Bitcoin. Before it boomed, one amusing feature of Dogecoin was that miners could receive their rewards ranging from 1DOGE to hundreds of thousand DOGE. In 2014, the dogecoin reward system for miners was changed to a static reward. Regardless, the block reward is still significantly high – 10,000 DOGE when compared to more popular coins.

Like other cryptocurrencies that rely on PoW, Dogecoin miners attempt to randomly generate a fixed-length value, called “hash,” It is equal to or lower than the target value known as target hash. The first miner to come up with the correct result appends the next block and receives newly minted coins as a reward.

Miners feed block data through a hash function to produce a hash. Unlike Bitcoin that uses the SHA-256 hashing algorithm (or function) to generate a hash, Dogecoin uses a less complex algorithm called Scrypt. As a result, new blocks are added every minute on the Dogecoin protocol. Besides, Dogecoin is also more energy-efficient than Bitcoin.

Another notable perk of the cryptocurrency is the coin’s somewhat unexplainable growth is “merged mining.” It is a term used for the process of mining two cryptocurrencies concurrently without affecting overall mining performance. Since Dogecoin (being a fork of Litecoin) uses the same hash function, miners can easily merged-mine both to earn more profits.

Nowadays, earning free Dogecoin for completing simple online tasks can be pretty difficult compared to earlier times. So, you might want to consider working as a miner if you are looking for alternate methods to earn Dogecoin. As a miner, you can either work solo, join a mining pool, or participate in Dogecoin cloud mining. However, people usually recommend joining a mining pool.

How to Buy Dogecoin?

If you have been thinking- Where can I buy Dogecoin? Well, Kyrrex provides you with an easy way to buy Dogecoin using fiat or other cryptocurrencies. You can also buy dogecoin on some other popular online brokerages like Robinhood or eToro. Although, you can improve your trading skills through access to Dogecoin and several other digital assets on the Kyrrex trading platform. You can buy and sell dogecoin cryptocurrency at Kyrrex with ease. Kyrrex also gives room for cryptocurrency exchange.

Since you are purchasing a digital currency, you need a crypto wallet. It’s best to move your Dogecoin to a secure crypto wallet once your purchase is completed. There are several types of wallets, such as online, software, and hardware wallets. Kyrrex offers a secure integrated digital wallet to its users. That way, you don’t have to move your coins all around.

How to Invest in Dogecoin?

Many people often ask if they can invest in Dogecoin. Yes, you can choose to invest in Dogecoin. The cryptocurrency has been one of the few coins with extreme volatility this year, thanks to Elon Musk and few other celebrities. However, you might want to have a proper analysis of the markets before investing.

Given that Dogecoin has no maximum supply, unlike other cryptocurrencies, it is highly inflationary. Dogecoin is in many ways similar to fiat currency. Therefore, it is not a very good investment in the long term since supply is infinite, giving no motivation for people to hold it for long periods.

A good strategy might be to invest in DOGE in the short term due to its occasional price bursts. For instance, investors made quite a fortune from Dogecoin earlier this year following its massive upward rally. Nevertheless, you should invest with caution because cryptocurrencies generally are very volatile and may incur huge losses.

Where Can I Use Dogecoin?

If you’re wondering-What is Dogecoin used for, or where can I use it? You are in the right place. Apart from short-term investments, you can use your Dogecoin to purchase online stores that support it. For instance, the basketball franchise Dallas Mavericks announced in March that it accepts Dogecoin for tickets and merchandise.

Cryptocurrencies have brought various business opportunities. From the rise of online crypto services to spending cryptocurrencies as cash now, they can be held as a value store. Cryptocurrencies like Dogecoin have fixed some inefficiency of the traditional financial setups due to their speed and low prices.

Right now, there are hundreds of companies and stores that now accept Dogecoin as a payment option. DOGE holders now make purchases online and in stores. Since its inception, dogecoin has come a long way from being a joke cryptocurrency to one currently taken more seriously than ever before.

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