Did you know that the Dogecoin was created to make fun of the Bitcoin? When it originally got launched, many enthusiasts came up with publicity stunts so as to enhance Dogecoin’s profile. But the crypto is no longer a joke today given how its value has exploded in recent times; Dogecoin has gained 5000% this year and the uptrend is expected to continue. The biggest boost of course has come from none other than Elon Musk, Tesla CEO, who has declared it as his favorite crypto. Elon Musk has called the Dogecoin “people’s crypto”, promising even to plant a physical Dogecoin token in the moon.
History Of The Dogecoin:
This crypto is an open-source digital currency based upon a forking of Litecoin code. Billy Markus was the first to introduce the idea of a “joke” cryptocurrency because he felt that a lighthearted coin would be more likely to gain mainstream adoption than the Bitcoin. While it is definitely not anywhere close to the Bitcoin, this crypto has risen in market cap from only $1 billion in January to $47 billion in April.
Dogecoin remains one of the biggest and most active crypto communities and the group has supported multiple charitable ventures. Unlike the Bitcoin which comes with a cap of 21 million coins, Dogecoin does not have an upper limit. So, there are probably 100 billion and more coins in circulation.
How Does It Work?
Dogecoin is a crypto founded on the blockchain technology like the Ethereum and Bitcoin. The blockchain is nothing but a secure, public, distributed ledger storing all transactions made using such decentralized digital currencies. Every holder will have an exact copy of this blockchain that is updated often as more and more transactions are made. Automated trading apps are also driven by the same technology. Visit https://kryptoszene.de/bitcoin-robot/immediate-edge/ to learn about one such trending app. Dogecoin network also uses cryptography for keeping transactions secure. Miners use computers to solve complex mathematical puzzles to process and verify transactions. These are then recorded on the blockchain through a Proof-of-Work system. For every successfully mined block, the miners are given Dogecoins which they can trade in the market or hold for the long-term.
What Can You Do With Dogecoin?
You can use Dogecoin for making payments but it is not that effective as a store of value. The reason being that there is no cap on its supply; so, the crypto is inflationary by nature. Since the blockchain will reward miners who create millions of coins each day, it becomes hard for speculative price rises to continue to be on the rise over time.
Should You Buy Dogecoin?
Dogecoin has some definite advantages over the Bitcoin. For one, it is much faster and miners can complete the mathematical equations quicker. So Dogecoin is preferred for payment processing. Secondly, there is no limit to Dogecoin supply whereas Bitcoin has a finite supply. This is why miners may be forced to work harder to earn new Bitcoins, but this helps to maintain Bitcoin’s value in the long term.
You can buy this crypto on exchanges like Kraken or Binance; they will make you create an account where you deposit your funds in crypto or USD. Using this you can then buy or exchange cryptos like Dogecoin. Some broker sites like Robinhood allow you to purchase Dogecoin besides conventional assets like bonds and mutual funds. When you have bought the coins, you should ideally transfer these to a crypto wallet for security. You must use a private password to access the funds; wallets offer an additional protective layer against hacks.