DogeCoin Review

Overview

Dogecoin is another cryptocurrency created by software engineers Billy Markus and Jackson Palmer, with the sole purpose of creating a payment system as a joke, making fun of the wild speculation in cryptocurrencies at the time. Even though it has a comical nature, many consider it a legitimate investment prospect. As its logo and brand Dogecoin features the face of the Shiba Inu dog from the “Doge” meme to initiate a rather satirical approach for the crypto payment system. After the introduction On December 6, 2013, Dogecoin quickly developed its online community, reaching a market capitalization of over $85 billion on May 5, 2021.

With the predicate “fun and friendly internet currency” Dogecoin.com promotes the currency referencing its origins as a joke.

Dogecoin is a frequent talk or tweet for Elon Musk and this has increased its popularity for a significant amount in recent years.

ElonMusk

‘Dogecoin’ has significantly drawn and shifted the attention of the world investors to cryptocurrencies. The famous face of the Shiba Inu dog is used as a logo and this contributes to the popularity and controversy of the coin. For the first time in history, Doge has recently surpassed 10 cents in value, marking a huge leap from its previous value of $0.0023 back in summer 2020. Elon Musk, the Tesla CEO, is known for influencing global markets just by their brief tweets, naming Dogecoin “the people’s crypto”. In general, all cryptocurrencies from Doge to Bitcoin are generated by computers, and their supposed values are derived from a finite number that is computed. It was almost a miracle this year, the Doge currency has risen more than 800% so far, as per BBC.

Dogecoin History

IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer originally composed the idea for Dogecoin as a joke Dogecoin. The final purpose was to reach a broader demographic than Bitcoin and they needed to create a peer-to-peer digital currency that will position well on the market by distancing it from the controversial history of other coins. Within the first 30 days after officially being launched on December 6, 2013, Dogecoin had over a million visitors to Dogecoin.com.

At the time, as a member of the Adobe Systems marketing department in Sydney Palmer made the idea a reality.  The domain Dogecoin.com had been purchased by Palmer who included a splash screen featuring the coin’s logo and scattered text. After seeing the site Markus reached out to Palmer and started efforts to develop the currency. Based on existing cryptocurrencies Luckycoin and Litecoin Markus had designed Dogecoin’s protocol. These cryptocurrencies use scrypt technology in their proof-of-work algorithm. Using this method of scrypt miners are not allowed to use SHA-256 Bitcoin mining equipment. Instead, they must use dedicated FPGA and ASIC devices for mining which are known to be more complex to produce.

The first major increase happened only in 72 hours, on December 19, 2013, when Dogecoin jumped nearly 300% in value, rising from US$0.00026 to $0.00095, with a volume of billions of Dogecoins per day. Probably, this increase occurred as a result of many other cryptocurrencies reeling from China’s decision to forbid Chinese banks from investing in the bitcoin economy. Dogecoin had the first major crash only three days later experiencing a drop of 80%. This drop happened as a result of the occurrence in China and the large mining pools exploiting the insufficient computing power required at the time to mine Dogecoin.

On December 25, 2013 millions of coins were stolen.

After hacking the online cryptocurrency wallet platform Dogewallet the first major theft of Dogecoin occurred. By gaining access to the platform’s filesystem the hacker modified its send/receive page to send any coins to a static address. No matter if it was about a negative event the hacking incident spiked tweets about Dogecoin, making it the most tweeted altcoin on Twitter at the time. “SaveDogemas” was the initiative by the Dogecoin community to compensate i.e. donate coins to those who lost funds on Dogewallet because of its breach. It took one month in total to cover the whole amount of stolen coins

Dogecoin, in January 2014, briefly surpassed the trading volume of Bitcoin and all other cryptocurrencies combined. Nonetheless, the market capitalization remained substantially behind that of Bitcoin. At first, Dogecoin composed a randomized reward system. Each mining block received a reward. However, in March 2014, this behavior was updated to a static block reward..

Sold via private keys, a copper and silver token representing Dogecoin was minted in 2014 by ShibeMint.

Leaving the cryptocurrency community In 2015 the co-founder Jackson Palmer has no plans to return, coming from the belief that cryptocurrency, originally conceived as a libertarian alternative to money, is fundamentally exploitative and built to benefit its top supporters.

In most recent history, on May 4, 2021, the value of Dogecoin first experienced a greater than 20,000% increase in one year surpassing the symbolic hurdle of $0.50.

Dogecoin trading

Dogecoin dropped 34% from $0.711 on May 8, 2021, at the opening of the show to below $0.470 45 minutes later due to expectations of a surge in interest in Dogecoin after Elon Musk’s hype on Saturday Night Live. The next morning, Dogecoin already have dropped to a swing low of $0.401, a cumulative drop of 43.6%, with a $35 billion loss in value.

The most attractive and interesting thing happened on May 9, 2021. A fully funded Dogecoin rideshare mission to the Moon was announced by SpaceX, making it the first space mission funded by a cryptocurrency. Elon Musk confirmed this via Twitter tweeting: DOGE-1 – a minor 40 kg rideshare payload on Intuitive Machines’ IM-1 mission in Q1 2022.

Some people think Elon Musk is highly influential on the price of Dogecoin you can read more about from the following news post:
Elon Musk Posts His Puppy On Twitter And Spikes The Prices of Several ‘Dog’ Coins For More Than 900%

What Is Dogecoin & How It Works?

As an altcoin for many users, the mainstream commercial applications of Dogecoin currency have gained traction on the internet, such as a tipping system, in which social media users tip others for providing interesting or noteworthy content.

Reddit and Twitter are the online communities where trading of physical, tangible items in exchange for DOGE takes place, and it is the place where users frequently share currency-related information.

With Dogecoin, starting from selling a house up to pornography and poker services, and activities are happening over the internet as we speak.

Reddit and Twitch use the Dogetipbot as an integrated, internal cryptocurrency transaction service. It enables Dogecoins transactions between users through commands via Reddit comments. After its creator declared bankruptcy, In May 2017, Dogetipbot was discontinued and taken offline leaving many Dogetipbot users losing their coins stored in the Dogetipbot system.

Although primarily used for tipping users on Reddit and Twitter,  Dogecoin is also accepted as a method of payment by some merchants. You can purchase almost what you need like food, household supplies, and even website domains. Although it was primarily created as an attempt to break the stigma surrounding cryptocurrencies, which carried negative connotations at the time its final objective was certainly introduced as an alternative to the greed its cofounder Palmer saw in the cryptocurrency community. That is why Dogecoin was designed to be unattractive to investors by keeping a permanently low value due to its mining algorithm.

Luckycoin, not existing currently, is a ‘fork’ of Litecoin, which is also a fork of Bitcoin is the origin of Dogecoin i.e Dogecoin is a version of Litecoin. When a blockchain diverges into two potential paths and can lead to a complete change in protocol and eventually a completely new cryptocurrency is the occurrence that we call a “fork”. One example of this happened in 2017, Bitcoin Cash was created after a hard fork in the Bitcoin blockchain.

Using a proof of work consensus algorithm called Auxiliary Proof of Work, the Dogecoin blockchain can process around 30 transactions per second, which is much higher than Bitcoin. This unique algorithm allowed those who mined other proof of work cryptocurrencies (primarily Litecoin) simultaneously to mine DOGE at no additional cost and this process is called merged mining.

Block rewards of Dogecoin were initially designed to be random and to vary between zero and a million DOGE. This block rewards model continued until it reached a supply of 100 billion. In February 2018 it finally reached this amount and since then, each mined block yields a reward of 10,000 DOGE.

Dogecoin has no supply cap as one block is mined every minute leading palmer to the conclusion that this is an error and that the supply cap should have been set at 100 billion. To keep the cost of DOGE low the supply cap was left ‘unfixed’ on purpose which has proven as a mistake over time.

Scrypt is the underlying technology Dogecoin uses, and like Litecoin it has lower hash rates (computational power per second) and consumes less energy than Bitcoin’s SHA-256 mining algorithm.

How to Buy Dogecoin

Decide how much you would like to invest in Dogecoin – Even though we have heard tons of stories of people who invested trivial amounts in DOGE and now are millionaires, investing with caution would be a life savior. Dogecoin is uniquely volatile because it has an unlimited supply and as with all cryptocurrencies it is a risky investment.

Here’s how things stand here: Investors have to buy more coins continually for Dogecoin’s price to increase or even remain steady. If this is not the case, the supply of DOGE rises exponentially affecting and diminishing the value of all the coins already in circulation (think inflation on steroids).

Extended experiences we have witnessed over the years as well as most of the experts don’t recommend you invest more than you’re willing to lose with cryptocurrencies in general. So, when deciding on how much to invest, consider your overall financial situation, investment portfolio, and risk tolerance so you will maintain a positive financial balance.

Choose a Cryptocurrency Exchange – Cryptocurrency exchange is the service you need to purchase any coin and Dogecoin as well. Opening an account on cryptocurrency exchange will allow you to engage with buyers and sellers to exchange cryptocurrency for dollars. The most popular exchanges include Binance, Coinbase, US, and Kraken. Most of them offer a simple, easy-to-use platform that charges higher fees as well as a more advanced trader platform with lower fees.

Beginner-friendly investment apps like Robinhood are also convenient ways to buy crypto, but keep in mind that these may not let you transfer your coins off of the app. Separate crypto wallets are the choice of some investors who prefer to protect their coins from hackers. In order to move them to a separate wallet First, you’d have to sell your coins and then rebuy them on an exchange. This process defeats the purpose of buying coins with an investment app in the first place. So, probably it is better off starting with an exchange from the very beginning.

An important note:  Make sure any exchange you’re considering has DOGE available for purchase, simply because, no matter if Dogecoin has become much more popular recently, it is not universally available on all crypto exchanges.

Choose a Payment Option – The very first thing to do before you can begin trading cryptocurrencies you need to deposit money in your exchange or brokerage account. In most cases, a checking or savings account will be allowed by the exchanges as a way to deposit money. Most of the exchange services accept wire transfers and PayPal transfers.

In most cases, with a deposit higher than $1,000—you may have to wait a few days for the transfer to clear before you can use the entire deposit. Any amount lower than this limit will get you instant access to your deposit for trading.

Note: Keep in mind before using a credit card to finance your crypto purchases that your credit card company will consider the money to be a cash advance and charge added fees and a higher APR as certain crypto exchanges allow you to use a credit card to buy Dogecoin and other cryptocurrencies. Investing in crypto using a credit card can make the occurrence even pricier and riskier. Hence, the best practice and advice from experts is to avoid acquiring cryptos using this purchasing method.

Place Your Order for Dogecoin – After you have deposited the wanted amount of money on your account, on the exchange’s trading or purchase platform, you need to search for Dogecoin or enter and seek its symbol: DOGE. What you need to do next, is to select your trade type and input the currency, probably the dollar amount you want to invest, and specify how many Dogecoins you want to buy.

After the order is placed and completed, it should go through immediately. You can buy and sell Dogecoin like other cryptocurrencies as it is not limited by trading hours. It is tradeable 24 hours a day, seven days a week.

Think thoroughly of your Storage Options – Dogecoin is by default saved in your exchange’s or brokerage’s crypto wallet when you purchase. The default crypto wallet is generally connected to the internet making it less secure from hackers’ attacks, and this is the main reason why some investors prefer to withdraw from the exchange or brokerage they initially purchased and store the coins in another wallet.

There are two options to choose from when storing your Dogecoin outside of your exchange:

– a hot wallet (digital and connected to the internet)  

 – a cold wallet (physical hardware that you can disconnect)

 Cold wallets are much less susceptible to hacking when compared to hot wallets, but generally more expensive. Also, there is a greater risk of being unable to access your cryptocurrency if you lose or forget the password necessary to get into your cold wallet.

Summary

Starting as a joke in order to battle other established coins the Dogecoin approach has made it difficult to be seen by mainstream media and financial experts as a beneficial investment.

Cryptocurrency and Dogecoin have had a long and problematic history of scams. Dogecoin holders who caught up the train with Doge early on have a large financial incentive to draw others into purchasing the coin,  benefitting financially from this. Hence, It has been described as a pyramid scheme, where only early entrants in the Doge will rip the benefits of it.

Unlike other cryptocurrencies, Dogecoin does not have a supply cap. For instance, such as Bitcoin has a capped supply of 21 million coins. On the other hand, Dogecoin has a block time of 1 minute. This is the time it takes to validate the presence of a new batch of coins, with a cap of 10,000 Dogecoin per block. With this frequency of issuing coins, the calculations confirm that every year 5 billion new Dogecoin will be created and enter circulation.

Many top analysts have identified Dogecoin as an extremely risky pump-and-dump investment.

The co-creator Jackson Palmer has left the project, and since then he had strongly criticized cryptocurrency in general, putting it out on several occasions as follows: “cryptocurrency is an inherently right-wing, hyper-capitalistic technology built primarily to amplify the wealth of its proponents through a combination of tax avoidance, diminished regulatory oversight, and artificially enforced scarcity.”

However, even though the price of Dogecoin is extremely volatile, the volatility can be used to make a profit if you approach it accordingly. Cryptocurrency daily traders enter and exit a trade within one day. They make a profit from calculating and identifying the pattern of volatility and they can trade off this volatility and benefit from the extreme swings in Dogecoin’s value.

Moreover, Dogecoin may have started as a joke, it certainly isn’t anymore. With a market capitalization of $78 billion in May 2021, it was the fourth-largest cryptocurrency in the world. As of August 22, 2021, it has since fallen to sixth place, with a market cap of $31.75 billion.

One thing positive worth mentioning about Dogecoin is its relatively small energy consumption for transactions when compared to other cryptocurrencies (0.12 kilowatt-hours per transaction (kWh) while, Bitcoin uses 707.6 kWh and Ethereum uses 62.56 kWh.

Dogecoin has had its ups and downs and exactly this is how investors make a profit out of it. So choose wisely how and when will you invest assets that will not make you go bankrupt. Furthermore, don’t expect an unavoidable income, because the risk is always present and things can easily go not according to your expectations, but according to precise estimates and calculations.  

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