Dogecoin is a revolutionary digital currency. The fact is, it is built on a complex system that has lots of features. Moreover, it became viral and popular due to its mass adoption.
Dogecoin was started as a fun meme with Shiba Inu in its logo. Software engineer Billy Markus and Australian marketing analyst Jackson Palmer created this token. Palmer branded the cryptocurrency’s logo using a meme popular at the time to describe a Shiba Inu dog. The joke was out of control; investments consider it a reliable and prospective project. According to Reddit, it became an instant hit. After some weeks, the token was popularized, and its market capitalization nowadays reached 10,7 billion dollars. It was in the top 15 of the largest digital currency.
Within the first few years of creation, the dogecoin community has already achieved a lot.
Advantages of DOGEcoin
There are a lot of benefits that Dogecoin brings to the market. For one, you can use this coin just like Bitcoin to quickly and securely send value to anyone internationally. Over the last few years, the coin’s network has increased, and now, more vendors than ever accept this unique token.
Choose Your Fees
There is no fee to receive dogecoins, and many wallets let you control how large a fee to pay when spending. Higher fees can encourage faster confirmation of your transactions. Fees are unrelated to the amount transferred, so it’s possible to send 100,000 dogecoins for the same fee it costs to send 1 dogecoin.
Moreover, it is cheaper and more convenient to convert coins to fiat currency. Everything is based on cryptocurrency, which is why the fees are much lower in comparison with Paypal.
How Do You Mine Dogecoin?
Dogecoin differs from Bitcoin’s proof-of-work protocol in several ways, one of which is by using Scrypt technology. The altcoin also has a block time of 1 minute, and the total supply is uncapped, which means that there is no limit to the number of Dogecoin that can be mined. You can mine Dogecoin either solo or by joining a mining pool. A Doge miner can mine the digital currency on Windows, Mac or Linux with a GPU. As of 2014, you can also mine Litecoin in the same process as mining Dogecoin, as the processes were merged.
What Can Dogecoin Be Used For?
Dogecoin has been used primarily as a tipping system on Reddit and Twitter to reward the creation or sharing of quality content. You can get tipped Dogecoin by participating in a community that uses digital currency, or you can get your Dogecoin from a Dogecoin faucet. A Dogecoin Faucet is a website that will give you a small amount of Dogecoin for free as an introduction to the currency so that you can begin interacting in Dogecoin communities.
Total Coins
Dogecoin has no hard cap. Initially, the project began with 100 billion coins in circulation. Due to the 1 minute block times, by 2015, all of these coins had been mined. The developers decided to issue another 5 billion at that time. Notably, Dogecoin now has 5 billion coins scheduled for issuance every year.
Dogecoin Community
The Dogecoin community has become popular due to its charitable contributions as tips. It appeared as a system in which users rewarded content makers and donated them some tokens. By Buying Dogecoin, people hyped the joke cryptocurrency; therefore, as the value and interest grew, as the Dogecoin rose. Users, newcomers and businessmen read the news, tweeted and even implemented the crypto coins into the projects.
The most popular cryptocurrency exchanges listing Dogecoin are Binance, KuCoin, Huobi Global and OKX. People can use the cryptocurrency exchange where it is possible to trade the coin.
With the help of fundraisers in 2014 during the Sochi Winter Olympic games, over $30,000 worth of Dogecoin was raised for the Jamaican bobsled team to take part. Unfortunately, the team didn’t get to Russia.
Elon Musk and Dogecoin Foundation
Tesla CEO Elon Musk twitted that Dogecoin gave hope, and it is one of his favorite digital currencies. There was also a piece of advice to his partners and readers to support, spread the coin and wait for success. Elon Musk’s style of marketing had a positive impact on the crypto market and the dogecoin ecosystem as well.
In his opinion, the only problem with the project is the high concentration of cryptocurrency on a small number of wallets. Musk even offered Dogecoin holders money to sell their tokens. The entrepreneur also shared the news that he acquired Dogecoin for his son, who was born in May 2020.
The Impact of Media on Cryptocurrency
In 2020, the TikTok video created a chain reaction. The price of the dogecoin foundation rose unbelievably.
Tiktok influencers called for followers to join them and buy Dogecoin, persuading them that they would be rich by purchasing coins and then selling them when the price hit $1. The hype was really high, causing Dogecoin to trade at over 2.5x on some days.
However, it is not a long period, and the value and price start to decline. It leads to significant and often unrecoverable losses.
Note that this kind of activity could be considered a pump and dump. This type of scheme is illegal to prevent investors from danger and protect them from fraud. Promoters purchase large amounts of an asset before generating hype around it, causing others to invest. As a result, the price rises significantly (the “pump”). Then, the promoters sell their holdings, leading to the “dump” – with such high sell pressure, the price plunges as later investors are left with huge losses.
How Does Dogecoin Work?
Dogecoin develops from the open code of Litecoin and is based on a bifurcation of Litecoin (LTC) called Luckycoin.
Like Bitcoin, Dogecoin uses a blockchain in which blocks are validated by master nodes via Proof-of-Work (PoW).
Therefore, the Dogecoin foundation bases its technology on the Bitcoin Blockchain and structures its platform on the open code of Litecoin, improving the ability to generate blocks (these are generated in just 60 seconds).
Dogecoin Blockchain
Similar to Bitcoin, there is a Dogecoin blockchain, where blocks are appended via Proof-of-Work. Network participants install open-source software onto their machines so they can act as full nodes. For those unfamiliar with blockchain technology, this means that each participant maintains a full copy of the database (which contains all transactions).
The system is decentralized because there’s no administrator that controls it. Instead, users send information directly to each other and rely on cryptographic techniques to tell whether their peers are acting honestly.
Mining and Supply
In Proof-of-Work blockchains like Bitcoin, a process called mining is used to create new coins. Participants must prove to the network that they’ve done “work,” which you can think as like revealing an answer to a complex puzzle.
One major difference between Bitcoin and Litecoin is that the latter doesn’t use the SHA-256 hash function for mining. This was an intentional decision – Litecoin instead relies on Scrypt, an ASIC-resistant Proof-of-Work algorithm.
As a derivative of Litecoin, Dogecoin inherited the Scrypt algorithm. To avoid any competition and to mitigate security risks, though, Dogecoin developers switched to a merged mining model, meaning that Litecoin miners could simultaneously earn Dogecoin. For an analysis of this, check out Binance Research’s Merged Mining in Dogecoin & Litecoin case study.
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Closing Thoughts
Despite being an asset, whole existence revolves around an Internet meme. The dogecoin foundation has developed a dedicated community of users. Several years on, it maintains a market cap of hundreds of millions of US dollars or even more. No matter whether all cryptocurrencies are unstable, people get a great amount of money or lose everything.
Cryptocurrencies are like “gold bars with wings”, as a famous American investor Tyler Winklevoss said. However, it is important to consider crypto as a risky investment. Without needed knowledge or mentors, you can be in a desperate financial situation. Although meme coins can be up and coming, even famous people can convince you to buy Dogecoin or other cryptocurrencies, and you need to be careful and analyze the market.
Anyway, the latest financial technologies are able to change the world. Do you want to be with us in the future?
