Dogecoin came into existence as a light-hearted joke for crypto enthusiasts. Everyone, from Elon Musk to Mark Cuban, expressed their enthusiasm for Dogecoin, resulting in a massive increase in Dogecoin prices.It has now become one of the most highly valued cryptocurrencies after receiving support from these great personalities.
Let’s take a closer look at Dogecoin and how to purchase it.
What is Dogecoin?
Unlike the other cryptocurrencies that came into existence to solve a problem, Dogecoin is one of the popular cryptocurrencies that was created literally as a spoof of Bitcoin. This currency was not worth the investment as it was not backed by any asset or cash flow.
Jackson Palmer and Billy Markus, two software engineers, created Dogecoin in 2013 following a quick rise in Bitcoin prices. The creator named it after the popular meme dog, Shiba Inu. Even though it started as a joke, the tables turned and Dogecoin started capturing the attention of the crypto community. By May 2021, the price of dogecoin rose to a high of $0.68 as compared to the price of one single penny at the beginning of 2021. Tesla CEO Elon Musk can be held responsible for this massive growth as he called dogecoin his favorite cryptocurrency. By mid-2021, Dogecoin was one of the top five cryptos in terms of total market cap.
Since then, the value of Dogecoin started falling and reached a low value of $0.11 in March 2022. However, it is still among the top 20 cryptocurrencies by market cap. As of February 2022, the reported total value of all dogecoin is about $19 billion.
How Does Dogecoin Work?
Just like other cryptocurrencies, Dogecoin works on its dedicated blockchain. The digital public ledger of Dogecoin is constantly updated with all the new transactions. The cryptography technique is used to secure all the transactions on the network.
The Dogecoin blockchain uses a proof of work mechanism that requires miners to solve some complex mathematical problems to process the transaction. All the transactions are recorded on the blockchain, and the miner earns some extra dogecoin, which they can hold or sell in the open market.
Some may accept Dogecoin as payment for a purchase, but it cannot be considered an effective store of value because there is no limit on the number of dogecoin that can be minted. The miners are rewarded for their work by creating millions of dogecoin per day, which makes it more challenging for the value of dogecoin to hold up over time.
What makes Dogecoin different from other cryptocurrencies?
Dogecoin has a few features that make it different from other cryptocurrencies. These features include the following:
- Cost and speed: The transaction speed of Dogecoin is relatively faster and it charges low transaction fees. The fast speed and low fees are both essential for wider adoption.
- Unlimited supply: Initially, there was a limit on Dogecoin mining, which was capped at 100 billion coins, but later it was changed to an unlimited supply. The unlimited supply keeps the price relatively stable.
- Active community: More than 300,000 members of Dogecoin are active in the crypto community. This community has also been known for rallying around good causes. Be it water charity in Kenya or the fund for Jamaican bobsled in the 2014 Olympic games, the community of Dogecoin has always helped.
How to buy Dogecoin?
You can buy Dogecoin on a cryptocurrency exchange platform such as CoinDCX or WazirX. You will have to set up an account on this platform and fund your account to buy Dogecoin.
Here is the step-by-step process of buying Dogecoin:
- Consider the investment amount: You might have heard or read the viral stories of people who invested in Dogecoin and became millionaires, but still, you need to invest with caution. Remember that cryptocurrency is a risky investment, and the fact that it has an unlimited supply makes it even more volatile. Consider your overall financial situation and risk tolerance before investing in Dogecoin. Only invest the amount that you can afford to lose.
- Decide on a cryptocurrency exchange: To buy, sell, and trade dogecoin, you will need to set up an account on the crypto exchange platform. This platform facilitates buyers and sellers to meet and exchange cryptocurrency for dollars. Some popular cryptocurrency exchange platforms include CoinDCX, WazirX, and Unicoin, which are simple, provide an easy-to-use interface, and charge lower transaction fees.
One thing to note here is that while Dogecoin has gained much more popularity in recent years, it is not universally available on all the crypto exchanges. So make sure that the exchange you are considering has Dogecoin on their list.
- Select a payment method: Before you start trading cryptocurrencies, you will have to fund your account. Most exchanges allow you to deposit money from a checking or savings account, while some also accept wire transfers and net banking. Generally, you can access a portion of the money instantly that you have deposited for trading. It may take up to 24 hours for a successful transaction.
- Place an order for Dogecoin: Once you have funded your account, you can pay and buy Dogecoin. On the crypto exchange platform, search for dogecoin. Then pick the trade type and enter the amount you want to invest, or you can input the number of dogecoin you want to purchase.
Once you place the order, it will be processed immediately. As with other cryptocurrencies, there are no limited trading hours for Dogecoin; you can trade Dogecoin 24 hours per day, seven days a week.
- Consider your storage options: When you purchase Dogecoin, by default it is stored in your crypto exchange wallet. You can also withdraw the cryptocurrency you have purchased and store it in another wallet. Generally, there are two types of wallets available out of your exchange, namely a hot wallet and a cold wallet. Hot wallets are digital wallets that are connected to the internet and thus are more susceptible to hacking. While cold wallets are physical wallets, they are relatively expensive but provide much more security against hacking.
So these are the steps that you can follow to purchase Dogecoin. Note that some major exchange platforms, like Coinbase, do not have Dogecoin on their list. However, you can store dogecoin in the Coinbase Wallet mobile app.
Just like other cryptocurrencies, you will have to store Dogecoin in a crypto wallet after you purchase it. You can find the Crypto wallet on the exchange platform itself, or you can download apps on your mobile device or even store it on a physical hard drive. Your wallet is secured with the password you set. Using an app for storing cryptocurrencies provides extra security against hacks as you put your coins outside of an exchange.
Bottom line
Even though Dogecoin was created as a joke, celebrities such as Elon Musk supported it and turned the tables. After that, massive growth in the price of dogecoin was seen. The crypto community also saw a steep fall in the value of this meme-based cryptocurrency. However, the unlimited supply of Dogecoin shows its inability to hold and grow its value over time.
“This story has been published by CoinChapter.com that covers Bitcoin news and other cryptocurrency news. The information contained in this article is for only informational purposes. It does not present any investment advice nor does it serve as a substitute for individual investment.”
