What is Dogecoin (DOGE)? A Beginner’s Guide to DOGE Cryptocurrency

Here is a guide in understanding Dogecoin (DOGE)
What is Dogecoin (DOGE)? A Beginner's Guide to DOGE Cryptocurrency
What is Dogecoin (DOGE)? A Beginner’s Guide to DOGE Cryptocurrency

Introduction to Dogecoin (DOGE)

DOGE (Dogecoin) is an open-source, peer-to-peer cryptocurrency. It’s classified as an altcoin and a snarky meme coin.

What is Dogecoin (DOGE)? A Beginner's Guide to DOGE Cryptocurrency
What is Dogecoin (DOGE)? A Beginner’s Guide to DOGE Cryptocurrency

The Shiba Inu dog serves as the logo for Dogecoin, which was launched in December 2013. Dogecoin (DOGE) is a cryptocurrency that is based on the popular Internet meme “doge” and has a Shiba Inu as its logo.

The open-source digital currency was forked from Litecoin in December 2013 by Billy Markus of Portland, Oregon, and Jackson Palmer of Sydney, Australia. Because it was based on a dog meme, Dogecoin’s designers envisioned it as a joyful, light-hearted cryptocurrency that would appeal to a wider audience than Bitcoin’s core demographic.

History of Dogecoin (DOGE)

Dogecoin was officially launched on December 6, 2013, and over a million people visited Dogecoin.com in the first 30 days.

Jackson Palmer and Billy Markus Participation in Efforts

Dogecoin was created by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer as a “joke.”

Dogecoin was created in 2013 by Jackson Palmer, a product manager at Adobe Inc. in Sydney, Australia, as a way to mock the hype surrounding cryptocurrencies. Palmer has been referred to as a “skeptic-analytic” observer of new technology.

Meanwhile, Billy Markus, an IBM software developer who wanted to create a digital currency but couldn’t find a way to promote it, came across the Dogecoin buzz. Markus contacted Palmer to request permission to develop the software that would power a real Dogecoin.

Palmer bought the domain Dogecoin.com and added a splash screen with the coin’s logo and Comic Sans text is strewn about. After seeing the site, Markus contacted Palmer and began working on developing the currency.

Markus then modeled Dogecoin’s protocol on existing cryptocurrencies such as Luckycoin and Litecoin, both of which utilize scrypt technology in their proof-of-work algorithms.

Miners must use dedicated FPGA and ASIC devices for mining due to the use of scrypt, which are known to be more complex to produce than SHA-256 bitcoin mining equipment.

In 72 hours, the value has increased by 300 percent

Dogecoin’s value jumped nearly 300 percent in 72 hours on December 19, 2013, from US$0.00026 to $0.00095, with a daily volume of billions of Dogecoins.

This expansion occurred at a time when bitcoin and many other cryptocurrencies were suffering as a result of China’s decision to prohibit Chinese banks from investing in the bitcoin economy.

The First Major Crash of Dogecoin (DOGE)

Due to this occurrence and massive mining pools utilizing the minimal amount of computational power required to mine Dogecoin at the time, Dogecoin (DOGE) saw its first significant crash three days later, plummeting over 80%.

Millions of Dogecoins were stolen following a cyberattack on the online cryptocurrency wallet platform Dogewallet on December 25, 2013, marking the first large heist of the cryptocurrency.

The hacker accessed the platform’s disk and changed the send/receive page to transmit all coins to a single address.

Although it was in response to a negative event, this hacking incident resulted in a spike in tweets about Dogecoin (DOGE), making it the most mentioned altcoin on Twitter at the time.

The Dogecoin community created a movement called “SaveDogemas” to help those who lost money on Dogewallet when it was hacked. After about a month, enough money had been donated to cover all of the coins that had been stolen.

Emergency of Dogecoin (DOGE)

What is Dogecoin (DOGE)?
What is Dogecoin (DOGE)?

Jackson Palmer, a co-founder of Bitcoin, left the cryptocurrency community in 2015 and has no plans to return, believing that bitcoin, which began as a libertarian alternative to money, is essentially exploitative and structured to benefit its top proponents.

Billy Markus, one of his co-founders, believed that Palmer’s position was generally correct.

Dogecoin briefly achieved a peak of $0.017/coin on January 7, 2018, during 2017 to early 2018 cryptocurrency bubble, placing its total market worth near USD 2 billion.

The price of Dogecoin soared in July 2020, thanks to a TikTok trend aimed at bringing the coin’s price to $1.

As a consequence of attention from Reddit users, partially spurred by Elon Musk and the GameStop short squeeze, Dogecoin surged up almost 800 percent in 24 hours in January 2021, reaching a price of $0.07.

Following tweets from Musk, Snoop Dogg, and Gene Simmons, Dogecoin (DOGE) reached a new high price of $0.08 in February 2021.

Mark Cuban, the owner of the Dallas Mavericks, stated in March 2021 that his NBA club would accept Dogecoin for ticket and merchandise purchases; within two days, Cuban claimed his team had become the top Dogecoin merchant, with 20,000 transactions.

Making it in the Big Leagues

Over the last year, the DOGE account has seen incredible growth, with a 681 percent rise in followers.

The Reddit community for the canine coin has 2.3 million members. In the year 2021, it was the most popular cryptocurrency-related subreddit.

Because of an Elon Musk-driven price rally in the fourth quarter of 2021, Dogecoin’s (DOGE) popularity skyrocketed. By the end of April, the Twitter account had surpassed a million followers, owing to an unprecedented retail frenzy.

However, as the price of the joke cryptocurrency began to plummet in early May, this rapid expansion came to a halt.

Even so, in 2021, the original meme coin, which was inspired by the Doge meme, was up nearly 5,000 percent, easily outperforming the vast majority of other top cryptocurrencies.

Doogecoin (DOGE) is currently down 79.80% from its all-time high. Despite the price drop, the meme coin is still the 11th most valuable cryptocurrency by market capitalization.

Features of Dogecoin (DOGE)

Dogecoin (DOGE) has all of the qualities of a good currency. It allows for extremely rapid transactions at very low costs, has a low inflation rate, is entirely decentralized, and is backed by a strong community.

1. There is no limit to the number of items available.

As with other cryptocurrencies, such as Bitcoin, Dogecoin has no limited supply. Miners of Dogecoin (DOGE) get 10,000 DOGE per block, which is created every minute. It entails the creation of 14,400,400 additional DOGE coins per day, which are subsequently sold on the market or stored in the wallets of miners.

2. Decentralization of power

Most cryptocurrencies have decentralized security, which means that security is in the hands of a group of users all around the world. The number of nodes on a cryptocurrency’s network and the distribution of miners is commonly used to determine its decentralization.

3. Most Dogecoins are in the Hands of a Few

Most Dogecoin (DOGE) wallets contain a vast amount of DOGE in circulation, which is a risk as they have undue control over price fluctuations and liquidity in the market. An estimated 0.002% of Dogecoin wallets hold about two-thirds of the total Dogecoin (DOGE) in supply.

It is a very different scenario with Bitcoin, which has evenly distributed wallet holdings.

Dogecoin has about 1,090 nodes, according to Blockchair, compared to 10,000 nodes in 97 countries for Bitcoin. As a result, the Dogecoin (DOGE) network is vulnerable to a 51 percent attack, in which a single person or entity gains control of more than half of the network.

Dogecoin (DOGE) New Milestone

Dogecoin‘s official Twitter account now has over three million followers.

— 💸💸💸 (@itsALLrisky) February 6, 2022

On the popular social media platform, it’s the second-largest cryptocurrency (behind only Bitcoin).

The two co-founders of Dogecoin (DOGE) Billy Markus, who tweets under the pseudonym Shibetoshi Nakamoto, has surpassed a million Twitter followers, making him one of the most popular cryptocurrency founders.

His account has benefited from frequent interactions with Musk, who has 72.8 million followers on Twitter.

Also, Jackson Palmer, an Australian programmer who collaborated with Markus to build the meme token, has a modest 41,600 followers on Twitter. In a viral tweet last July, he slammed the cryptocurrency industry, calling it “a powerful cartel” run by wealthy individuals.

Dogecoin vs. Bitcoin, What is the Difference?

When compared to Bitcoin, Dogecoin (DOGE) has a few key differences.

First, miners can finish the mathematical calculations that complete and record transactions faster and more easily, making Dogecoin (DOGE) slightly more efficient for payment processing.

Another notable distinction is that, as previously mentioned, there is no lifespan limit on the number of Dogecoins that can be created.

The maximum number of coins that can be created is limited by a lifetime cap of 21 million Bitcoins.

This forces miners to work harder and longer over time in order to earn new Bitcoin, which helps to ensure Bitcoin’s ability to hold and grow in value over time.

Tesla CEO Elon Musk Favourite Coin

Dogecoin (DOGE) was named after a once-popular meme and was created at least in part as a lighthearted joke for crypto enthusiasts.

Despite its unusual origin story, Dogecoin (DOGE) has exploded in popularity in 2021, becoming the 11th largest cryptocurrency by market capitalization as of this writing.

Tesla CEO Elon Musk named Dogecoin (DOGE) his favorite cryptocurrency, despite the fact that it was created as a joke. Musk also dubbed Dogecoin the “people’s cryptocurrency” and stated that a physical Dogecoin token would be planted on the moon.

— I am Hodler 🔑 (@iamhodler) April 2, 2019

Billionaire and Tesla CEO Elon Musk believe that cryptocurrency Dogecoin (DOGE) is better for transactions as compared to Bitcoin and has stated on multiple occasions that Dogecoin is his favorite cryptocurrency.

Tesla’s founder and CEO, Elon Musk, has thrown his support behind the meme-inspired cryptocurrency dogecoin on several occasions. Musk revealed in a tweet on Jan. 14 that Tesla will take dogecoin—also known as “people’s crypto”—as payment for some products on its website.

— Elon Musk (@elonmusk) January 14, 2022

Frequently Asked Questions About Dogecoin

1. How Do I Mine Dogecoin (DOGE)?

Dogecoin’s proof-of-work methodology differs from Bitcoin’s in various aspects, one of which is the use of Scrypt technology.

The altcoin also has a one-minute block time and an unrestricted total supply, meaning that the number of Dogecoin (DOGE) that may be mined is unlimited.

You can mine Dogecoin (DOGE) on your own or as part of a mining pool. A Doge miner can use a GPU to mine the digital currency on Windows, Mac, or Linux.

The DOGE Mining Methodology

A Dogeminer is the piece of hardware used to mine Dogecoin. It is essentially a node on the Dogecoin blockchain that executes mathematical equation calculations to review and validate incoming network transactions.

The nodes decide which validated transactions go on the Dogechain (Dogecoin blockchain) and combine them into blocks, which are then immutably recorded on the shared ledger.

Miners are rewarded with DOGE for completing these difficult mathematical operations. The Dogechain sends out 10,000 DOGE every minute, which the quickest miner receives to confirm an incoming transaction.

2. How Can I Sell or Buy Dogecoin (DOGE)?

You can sell or purchase Dogecoin (DOGE) on any exchange that supports it, store it on an exchange or in a Dogecoin wallet, and tip Dogecoin in any community that accepts the digital currency.

Dogecoin can be purchased on a cryptocurrency exchange such as Binance or Kraken. You must create and fund an account with US cash or cryptocurrency on the exchanges.

After that, you can purchase and sell cryptocurrencies, including Dogecoin. Notably, the popular cryptocurrency exchange Coinbase does not allow Dogecoin purchases.

In addition to traditional assets like stocks, mutual funds, and bonds, some online brokers, such as Robinhood and TradeStation, allow you to buy Dogecoin. Although they don’t have as many cryptocurrencies as exchanges, Dogecoin is widely available.

Top cryptocurrency exchanges for Dogecoin include the following:

  • Binance
  • Coinbase
  • Gemini Crypto
  • eToro
  • Robinhood
  • Upbit
  • OKEx

It is Safer to Move Your Dogecoin to a Crypto Wallet

Once you’ve purchased Dogecoin (DOGE), you should transfer your coins to a crypto wallet, just like you would with any other cryptocurrency.

Wallets come in a variety of shapes and sizes, ranging from online services provided by exchanges like Coinbase (while you can’t buy Dogecoin on Coinbase, you can store it in your Coinbase wallet), to mobile apps or even a physical hard drive.

A private password is used to protect the wallet. There’s an added degree of safety against hacks because your coins aren’t housed on an exchange.

3. Is Dogecoin (DOGE) Safe?

Dogecoin uses blockchain technology, just like Bitcoin and other cryptocurrencies. Blockchain technology is considered extremely difficult, although not impossible, to hack. Being among the cryptocurrencies with the largest market capitalization and widest adoption rate, Dogecoin is relatively secure.

Still, many investors are hesitant to purchase Dogecoin (DOGE), particularly as an investment. The steady influx of fresh coins onto the market kept the coin’s value under constant downward pressure.

When compared to other prominent cryptocurrencies, an investor warned about additional security dangers for Dogecoin (DOGE).

“It simply hasn’t been subjected to the same amount of security and code inspection as Bitcoin or Ethereum.” Plus, because there isn’t much of a mining community around Doge, the risk of a mining-level attack is far higher than it is for something like Bitcoin.”

Purchasing any cryptocurrency, including Dogecoin, entails some risk. It’s usually a good idea to buy a few coins and get to know the system.

4. How Dogecoin (DOGE) Work?

Like most cryptocurrencies, Dogecoin (DOGE) is based on blockchain technology, which employs a distributed, secure digital ledger to store and add all transactions done on its network.

Cryptography is also used by the Dogecoin network to safeguard all transactions on its blockchain network.

The “proof-of-work” idea is used in Dogecoin (DOGE) mining, in which miners use computers to solve complex mathematical equations in order to process and record transactions on the blockchain network.

Miners receive Dogecoins in exchange for their work, which they can sell on cryptocurrency exchanges or keep in their wallets.

Dogecoin (DOGE) can be used to make payments and purchases, but it hasn’t proven to be a good cryptocurrency for storing value.

This is due to the fact that Dogecoins can be manufactured in an endless number of ways, making the cryptocurrency highly inflationary by design.

DOGE miners are able to complete mathematical problems and record transactions more quickly and easily.

This makes Dogecoin (DOGE) a more efficient payment processor. The Dogecoin blockchain takes an average of one minute to process and ratify new blocks, compared to ten minutes for Bitcoin.

However, by requiring miners to labor longer and harder on each block reward, this distinction helps Bitcoin keep and expand its value over time.

What is the Difference Between Proof of Stake and Proof of Work?

The “proof-of-work” idea is used in Dogecoin mining, in which miners use computers to solve complex mathematical equations in order to process and record transactions on the blockchain network. Dogecoin, like other cryptocurrencies like Bitcoin, is currently based on the proof of work consensus process.

Miners employ the computing capacity of a machine to solve complicated mathematical puzzles and validate new transactions in this system. The first miner to solve a challenge adds a new transaction to the blockchain’s record of all transactions. They are then given the network’s native coin as a reward. This technique, however, can be quite energy-intensive.

The Work’s Proof In its current incarnation, the PoW mechanism is a computationally and energy-intensive procedure that involves solving a hard mathematical puzzle that is being employed by Ethereum miners for transaction validation.

Proof of stake differs from mining in that users can stake a network’s native cryptocurrency and become validators instead of miners. Validators, like miners, validate transactions and ensure that the network is not executing false transactions.

These validators are chosen to propose a block based on the amount of cryptocurrency they have staked and the length of time they have staked it.

Other validators can then confirm that a block has been seen. A block can be added to the blockchain once there are enough attestations. The successful block proposition is then awarded to the validators. “Forging” or “minting” is the term for this process.

The main advantage of PoS over PoW is that it decouples energy-intensive computer processing from the consensus algorithm, making it far more energy-efficient. It also means that securing the blockchain does not necessitate a large amount of computing power.