What is Dogecoin – A Simplified Explanation

So much is going on in the cryptocurrency industry, and investors are getting richer. You can make better investment decisions when you know more about trending cryptocurrencies. Dogecoin has been in the news for many weeks, it is now one of the most talked about cryptocurrencies with huge potentials. We hope to answer many of your questions in this post.

It is amazing to see how other less talked about cryptocurrencies have suddenly gained relevance in the crypto market. Dogecoin has had a tremendous performance so far.

Dogecoin was created in 2013. It started as a joke to create a cryptocurrency featuring the popular Japanese dog breed called Shiba Inu. One of the founders of Dogecoin, Jackson Palmer who talked about his idea on crypto forums online. Soon, Billy Markus proposed to work with Jackson to make Dogecoin become a real crypto coin that could be used for transactions. Jackson Palmer agreed, and they established Dogecoin.

The cryptocurrency community also had a part to play in creating Dogecoin. The funny theme of the coin, a hilarious picture of a happy dog, caught their attention really fast. The community realized the need for additional coins to support the Blockchain and create more channels to generate revenue. Dogecoin is a favorite among the crypto community because it works just like Bitcoin.

Dogecoin was created with a close replica of Bitcoin’s code. This is what happened – Litecoin (LTC) was created using the Bitcoin code, and the Luckycoin was created from the same code. Luckycoin is a fork for Litecoin. And Dogecoin was created based on the Luckycoin code. It was fairly easy to create the Dogecoin since the needed code already existed.

However, mining Dogecoin and its initial growth were quite slow. In 2015, due to slow returns, Billy Markus sold his Dogecoin at a low rate. In the coming years, Palmer Jackson also sold his Dogecoin asset.

Can Dogecoin become a major cryptocurrency?

Dogecoin has been widely accepted by members of the crypto community. However, the experts have expressed concerns that Dogecoin may not fully become mainstream crypto very soon, despite its excellent performance in 2021.

The reason for their concerns about Dogecoin is related to the allowance for miners to create up to 14 million Dogecoins daily. The unlimited mining process could cause inflation and cause a dent in the coin’s value. Bitcoin has thrived in the market because it has a fixed cap of 21 million only, which creates value by scarcity.

At the moment, the USD value of Dogecoin is lower than other prominent coins such as BTC and ETH. However, it is one of the coins in the market that can become the public’s favorite for transactions such as giving tips, online purchases, or online subscription payments. These are transactions that will require splitting BTC into smaller amounts which is quite difficult. It is more convenient to make payment in rounded-up figures, with the Dogecoin, which has a lower unit value.

Considering the benefits of using Dogecoin for transactions, it is expected that the coin will thrive and possibly become one of the mainstream coins in the cryptocurrency market. The Dogecoin community has been contributing to the coin’s success. It is crucial that the community continues to use Dogecoin to perform transactions to make it more relevant in the crypto industry.

Is Dogecoin mining fast?

On average, it takes about one minute to mine a block on the Dogecoin Blockchain, which is very fast. Compared to BTC, mining Dogecoins is a faster process. However, it yields a lower profit because the value of BTC is high. Hopefully, in the future, the value of Dogecoin will appreciate, and then everyone will want to start mining it.

Dogecoin Pricing trends

The price of one Dogecoin when it was created in 2013 was below $0.01. By 2018, the price had appreciated to $0.018, and over time, there has been various price fluctuations in the market until 2021, when the price stabilized for a short time.

Dogecoin was valued at $0.01 in 2021. This value lingered for a short time, and by the end of January, the value of Dogecoin became $0.07 for one coin. The sudden increase in value happened in 48-hours, which was amazing to watch.  And in a few days, Dogecoin was valued at $0.088 for one coin.

After consistent increases in value, the price dropped to $0.04, which was maintained until May 2021, when the value rose again to $0.074.

The market price changes have been closely monitored by cryptocurrency investors and analysts. It is normal to see cryptocurrency prices change often. The price changes are influenced by the demand from the community, among other factors.

How has the community supported Dogecoin?

The Dogecoin community has grown. At the moment, there are so many stakeholders who want to see the coin thrive in the crypto market. The members of the Dogecoin community include people who use social media platforms such as Reddit, TikTok, and Twitter. These platforms have been used to push the value of the coin higher. There has been a campaign on TikTok to encourage more people to trade with Dogecoin. Also, a Reddit group known for its influence on the Gamestop stock value in 2021 has pushed the Dogecoin agenda to influence its usage. Actions such as simple Tweets from social media influencers have triggered a sudden rise in the value of the coin. One of such events happened when a Twitter user with the handle ‘WSB Chairman’ posted a comment proposing that Dogecoin could exceed the $1 value. This comment caused an increase in the coin’s value to $0.07.

The CEO of the Tesla brand Elon Musk has also been posting about Dogecoin on his Twitter page. Elon Musk monitors the coin’s performance in the crypto market, and he tweets about his expectations for the coin.

The Dogecoin community has sustained trends and discussions on different social media to make the coin remain relevant. These efforts have helped the Dogecoin perform better. For example, in 2021, the value of Dogecoin traded on the market exceeded Bitcoin trades for one day.

Other public campaigns for Dogecoin include branding race cars, sponsoring sports teams, and crowdfunding for different events.

How do investors buy Dogecoin?

You can buy Dogecoin on exchange platforms. Many exchanges offer Dogecoins; however, you need to choose wisely because these platforms charge different rates for transactions. All you need to do is register on the exchange and transfer the value of USD or other currencies, known as fiat currency, to the exchange. The deposit is converted into crypto assets that you can use to purchase Dogecoin from sellers on the exchange.

Also, there are online platforms where people meet to trade Dogecoin. You handle the negotiation, arrive at an agreement, and deal through escrow.

Storing Dogecoin

Many investors plan to hold their Dogecoin for long periods waiting for its value to rise. That is a smart move. You can store your Dogecoin in software or hardware wallets. Your exchange should provide a wallet that can also be used to store your Dogecoin, though this is not really advisable because the exchange maintains control over your wallet. And there is no guarantee that you will get a refund if your wallet is hacked.

Always confirm that the wallet you request can be used to store Dogecoin. Some wallets cannot accommodate it, especially if you want to buy the local self-hosted wallets.

Which online platforms accept Dogecoin as payment?

You can spend your Dogecoin in different ways. One of the common options for sellers is using an exchange platform where many others are trading Dogecoin. Also, people can buy your coins directly; in this case, you transfer the coins to their wallet, and they pay you in the fiat currency of your choice. Dogecoin can also be used to purchase tickets for sports games and merchandise sold by sports teams to fans.

Are there frequent Dogecoin updates?

Over the years, the software engineers managing Dogecoin have rolled out different updates for the coin. These technical upgrades are implemented to keep the Dogecoin network at an optimal level.

What is the future for Dogecoin?

The future looks great. The Dogecoin network has continued to attract more investors interested in the low transaction fees, which cost about $2.52 only.

Also, it is expected that the mining actions will continue creating coins needed to push the market forward. However, the threat of inflation remains due to the unlimited mining cap.

Since the majority of Dogecoins existing are held in only 20 Dogecoin wallets, there is a possibility that these stakeholders could suddenly make moves to boost the coin’s value by leveraging their major holdings