Dogecoin is a cryptocurrency, similar to Bitcoin and Ethereum, but it is a very different case than either of these popular coins. Dogecoin was named after a once-popular meme and was created in part as a lighthearted joke for crypto enthusiasts.
Dogecoin is a peer-to-peer cryptocurrency with an intriguing origin story. This cryptocurrency that began as a joke in 2013, but has since surpassed expectations to become one of the most valuable cryptocurrencies on the market.
What Is Dogecoin?
Dogecoin (DOGE) is an open-source, peer-to-peer cryptocurrency that was created as a parody of the cryptocurrency market after the creation of Bitcoin. It began as a lighthearted joke for crypto enthusiasts, but it quickly grew to become one of the most popular cryptocurrencies in use today.
The Dogecoin brand logo is based on a popular meme from the time, which featured a Shibu Inu dog. It was founded in December 2013 and is based on the same fundamental technology as other cryptocurrencies such as Bitcoin and Litecoin.
How Dogecoin works
Dogecoin, like many other coins, operates on its own dedicated blockchain. Dogecoin’s digital ledger is constantly updated with new transactions, and the network uses cryptography to ensure the security of all transactions.
Miners use computers to solve complex mathematical equations in order to process transactions and record them on the Dogecoin blockchain, which uses a proof of work consensus mechanism. Miners earn additional Dogecoin in exchange for supporting the blockchain, which they can then keep or sell on the open market.
Dogecoin can be used to make payments and purchases, but it is not a very good store of value. This is primarily due to the fact that there is no lifetime limit on the number of Dogecoins that can be created through mining, implying that the cryptocurrency is highly inflationary by design.
The blockchain rewards miners for their efforts by creating millions of new Dogecoins every day, making speculative price gains in Dogecoin difficult to sustain over time.
History Of Dogecoin
Dogecoin was created in late 2013 by two software engineers working at IBM and Adobe Systems, Bill Marcus and Jackson Palmer. It was built with open-source code derived from Litecoin, which was a fork of the Bitcoin blockchain. The main goal of its creation was to raise public awareness of the capabilities of blockchain technology.
The volatile cryptocurrency has risen more than 4,000% in 2021 alone, thanks to the support of a large online community that includes Elon Musk, Mark Cuban, and Snoop Dogg, with some analysts forecasting the price to reach $1 before the end of the year.
The online community has also had an impact on newsworthy headlines, such as the $50,000 fundraiser to send the Jamaican Bobsled Team to the 2014 Winter Olympics after the team qualified but could not afford to attend. In 2014, they also paid $55,000 to sponsor a NASCAR Sprint Cup Series driver, Josh Wise.
By 2021, such publicity stunts had elevated Dogecoin to cult status. It gained traction on Reddit’s WallStreetBets message boards and on Twitter, where its value responded to popular Elon Musk tweets like “to the moon,” “favorite cryptocurrency,” and “people’s crypto.”
Dogecoin vs Bitcoin
Dogecoin differs significantly from Bitcoin in several ways. First, miners can complete the mathematical equations that complete and record transactions faster and easier, making Dogecoin slightly more efficient for payment processing.
“Whereas the process to ratify new blocks on the Bitcoin blockchain takes 10 minutes, it only takes one minute on the Dogecoin blockchain,” said Gary DeWaal, Chair of Katten’s Financial Markets and Regulation group.
Another significant difference is that, as previously stated, there is no lifetime limit on the number of Dogecoins that can be created. The maximum number of coins that can be created in a lifetime is limited to 21 million Bitcoin. This means that miners must work harder and longer over time to earn new Bitcoin, which helps to ensure Bitcoin’s ability to hold and grow in value over time.
Dogecoin Features
Although it is an Altcoin, Dogecoin has a lot of amazing features that even most of the popular cryptocurrencies lack including;
Decentralization
Decentralization is part of the security that governs most cryptocurrencies, which means that security is in the hands of a global community of users. A cryptocurrency’s decentralization is typically measured by the number of nodes on its network and the distribution of miners.
According to Blockchain, Dogecoin has approximately 1,090 nodes, compared to 10,000 nodes spread across 97 countries for Bitcoin. As a result, the Dogecoin network is vulnerable to a 51% attack, in which a single person or entity controls more than 50% of the network.
No Maximum Supply
Dogecoin has no maximum supply as in other cryptocurrencies such as Bitcoin. Dogecoin miners earn 10,000 DOGE per block, and each block is created every minute. It entails the creation of 14,400,400 new DOGE tokens per day, which are then sold on the market or saved in miners’ wallets.
There is approximately 132.28 billion DOGE in circulation at the time of writing, with a market capitalization of $7.67 billion.
The majority of Dogecoins are in the hands of a few people.
Most Dogecoin wallets have a large amount of DOGE in circulation, which is a risk because they have undue control over price fluctuations and market liquidity. Approximately two-thirds of the total DOGE supply is held by an estimated 0.002% of Dogecoin wallets. This is not the case with Bitcoin, which has evenly distributed wallet holdings.
How to Mine Dogecoin
Mining Dogecoin has largely been unprofitable due to its low value. However, the recent rise in the price of DOGE has created opportunities for miners. When attempting to begin mining the DOGE, it is critical to keep the currency’s volatility in mind.
The DOGE Mining Process
A Dogeminer is a hardware used to mine Dogecoin. It is simply a node in the Dogecoin blockchain that performs mathematical equation calculations to check and validate incoming network transactions. The nodes decide which validated transactions are included on the Dogechain (Dogecoin blockchain) and incorporate them into blocks, which are then recorded immutably on the shared ledger.
Miners are rewarded with DOGE for performing these complex mathematical calculations. The Dogecoin emits 10,000 DOGE per minute, which the fastest miner receives to confirm an incoming transaction.
Choose the Appropriate Hardware
The first step in mining DOGE is to select your hardware. Although computer processors (CPUs) and graphics cards (GPUs) can still be used, the former is not recommended for crypto mining. Although GPUs are more efficient than CPUs, they have poor heat dissipation. Because of its efficiency and profitability, ASIC miners have become the most popular hardware.
Because Dogecoin uses the Scrypt algorithm, specialized Scrypt ASIC miners are the best hardware for DOGE mining. Scrypt ASIC miners are also far more profitable than GPU miners. On the market, notable Scrypt ASIC miners for Dogecoin include:
Miners should ensure adequate temperature control through coolers, noise containment, and storage space for the equipment to prolong and maintain their hardware. The best locations are usually cool, soundproof, and have an uninterrupted power supply.
Dogecoin Mining Software
Miners use Dogecoin mining software to connect to the Dogecoin blockchain and begin mining. However, it is necessary to ensure that the software application is compatible with the hardware in use. Among the notable dogecoin mining applications are:
Mining Approach
There are three basic approaches to DOGE mining, which include:
- Solo mining – Solo mining entails miners working alone. Due to competition for block rewards from large mining pools with more computing power, this may not be sustainable or profitable. Individuals with high computing power, on the other hand, can always try.
- Joining mining pools – Joining mining pools – Mining pools are groups of individual miners who pool their computing power resources in order to increase their chances of winning block rewards. Participation in a mining pool also helps to alleviate the burden of high energy costs. In 2021, popular Dogecoin mining pools include Multipool, Antpool, Prohashing, and AikaPool.
- Cloud mining – Miners pay an online data center a monthly or annual subscription fee to mine on their behalf. Genesis Mining and Nicehash are two cloud mining options for DOGE.
Wallet Creation
After determining the hardware, software, and mining approaches, the next step is to create a wallet. The wallet should be able to support Dogecoin and use a private key, as indicated in the preceding sections. The proceeds from mining will be deposited here. It is also necessary to connect the wallet to the mining software.
Launch
Once everything is in place, the DOGE mining operation can begin. The mining software should be able to track your earnings per hour or per day. When you join a mining pool or a cloud mining service, the procedure is much easier.
Dogecoin FAQ
How To Buy Dogecoin
You can buy Dogecoin (DOGE) by opening an account with one of the many cryptocurrency exchanges, such as Coinbase, Binance, or Kraken. Dogecoin is also supported by Robinhood, a traditional brokerage that allows crypto trades.
What Is Dogecoin Used for?
You can spend your Dogecoin at any merchant who accepts it. DOGE is accepted by a wide range of businesses, including Elon Musk’s SpaceX and the Dallas Mavericks. Many Dogecoin owners tip content creators on Reddit and other social media platforms with their DOGE.
How Much Is Dogecoin?
The price of Dogecoin is influenced by many traditional factors, including project news and developments, market sentiment, the flow of cryptocurrency on exchanges, and the economy in general.
Furthermore, as DOGE adoption grows, more people will use it as a payment method, increasing demand and driving up Dogecoin’s price and market cap.
Dogecoin (DOGE) is currently worth 0.05954359 €.
DOGE has a 24-hour trading volume of 289,430,404 €. DOGE is currently ranked #10 in total market cap among all cryptocurrencies, with a market cap of 7,904,331,430 €. It has 132,670,764,300 DOGE in circulation.
Conclusion
In 2013, Dogecoin (DOGE) was created as a fun alternative to traditional cryptocurrencies like Bitcoin. A meme inspired the name and Shiba Inu logo. Unlike Bitcoin, which was designed to be scarce, Dogecoin is designed to be abundant, with 10,000 new coins being mined every minute and no cap on supply.
