Investing In Dogecoin – Everything You Need to Know

Investing In Dogecoin – Everything You Need to Know

Dogecoin is a first-generation cryptocurrency that can be used to transfer value globally in a secure manner. Famously, Dogecoin features the Shiba Inu from popular internet memes. The decision to use this character was brought on by the developer’s desire to keep the project light-hearted. Like Bitcoin and Litecoin, the main purpose of this coin is to allow for peer-to-peer transactions to occur in a censorship-resistant manner. As of late, Dogecoin has seen considerable coverage in the media due to huge price hikes. As you are about to learn, this isn’t the first time this blockchain network has burst into the limelight.

What Problems Does Dogecoin Attempt to Fix?

Like all first-generation cryptocurrencies, Dogecoin was basic in functionality. At that time, there weren’t any smart contracts, staking, or all of these other features that are now commonplace in the market. For these early coins, the primary focus was on creating a secure network. To that extent, Dogecoin succeeded greatly, but not without its share of trials and tribulations.

The second feature about Dogecoin, and perhaps what really makes this coin unique, is the spirit in which the developers wanted Dogecoin to express. Dogecoin wasn’t really made to free the masses from oppression like Bitcoin. Nor was it built to provide a viable alternative to Bitcoin in the market like Litecoin. Interestingly, this coin was built to spread goodwill and fun throughout the crypto community.

Benefits 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 internationaly. Over the last few years, the coin’s network has increased, and now, more vendors than ever accept this unique token.

Censorship Resistant

Dogecoin shares many technical characteristics with the world’s first crypto, Bitcoin. Consequently, the network is secure and provides real-time consensus. Like Bitcoin, hackers would need to control 51% of the network’s hashing power to alter the state of the blockchain. Considering the current Dogecoin hashrate is 203.97 TH/s, this is very unlikely.

How Does Dogecoin Work

It wouldn’t be too hard to argue that much of Dogecoin’s coding is a direct copy of Bitcoin. Discussing the idea, one of the coin’s founders, Billy Markus stated that it only took 3 hours to create Dogecoin. He described how he literally used the control F function to scroll through Bitcoin’s code and replace all instances of Bitcoin with Dogecoin.

He also made a couple of other adjustments to further the concept like changing the term mining to digging. Notably, Markus decided on a 1 minute block time. A blockchain network’s block time is a reference to how often a new “block” of transactions is added to the “chain” of transactions.

Consensus

Dogecoin uses a Proof-of-Work consensus algorithm to keep the network secure. However, this PoW system is not the same SHA-256 version used by Bitcoin. Instead, the network relies on a scrypt technology in its PoW mechanism. This decision was made to prevent the use of high powered Bitcoin mining rigs. You can only mine Dogecoin using dedicated FPGA and ASIC devices

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.

Digging (Mining) Dogecoin

In the Dogecoin ecosystem, you have diggers. These network nodes are what validates new transactions and add blocks. Notably, mining Dogecoin is less competitive than Bitcoin. Notably, the developers behind this coin never did a pre-mine. Pre-mines are popular because they allow developers to build up reserves before the network goes public.

History of Dogecoin

Dogecoin was founded by Billy Markus and Jackson Palmer. Both of these individuals had worked in the tech sector prior to Dogecoin. Markus was a software engineer at IBM and Palmer worked for Adobe as a programmer. Dogecoin started off as a joke geared for the market.

A Modest Start

On December 6, 2013, the network went live. Originally, the project only garnered attention for a select Reddit community. These individuals would send tips in Dogecoin to each other. Notably, the Dogecoin website had a million+ visitors on the day of the launch of the coin.

On December 19, 2013, Dogecoin experienced a huge breakout moment. The coin’s value jumped almost 300% in value in fewer than 3 days. This market movement was the first time that Dogecoin really sparked market-wide investor interests. Notably, the rally was short-lived and within 3 days, the coin’s vale had retraced 80%.

A few days later, the company’s native wallet, Dogewallet, was hacked. The infiltrator made off with millions of Dogecoin. A later review revealed that the attacker was able to modify the wallet’s send and receive page to send coins to a static address.

A Tight Community

For many projects, this would have been the end. For Dogecoin it was an opportunity to show why this project is so different than many other coins. The developers and community quickly started the “SaveDogemas” donation campaign to replace the stolen coins. Miraculously, all losses were covered via this initiative.

In early 2014, the community sponsored a fundraising event that secured $25,000 for the Jamaican bobsled team. This event marked the start of an impressive donations rally. The community then focused on getting clean water in Kenya. After another successful event, Dogecoin went on to train assistance dogs for autistic children.

Moolah

The same year, Dogecoin was listed on the exchange, Moolah. The listing gave Dogecoin more credibility and added to the liquidity of the network. Interestingly, the project was headed by a Reddit user by the name of Alex Green. He used the Reddit handle Moolah_.

In 2017, Dogecoin had another market surge to a new all-time high of $0.017/coin on January 7, 2018. This growth occurred during the crypto break out that saw all altcoins see considerable gains. In July 2020, another spike in the coin’s value occurred after TikTok users began a campaign to push the coin’s value higher.

A Major Rally

This year saw Dogecoin raise eyebrows again. The token shot up over 800% in 24 hours as a result of a campaign to wreck predatory hedge funds. This rally was organized by a group of Reddit users, headed by an individual known as WSBChairman. The run took flight when the strategy got the nod of approval from the world’s richest man and founder of Tesla Motors, Elon Musk.

Short Squeeze

The group of Reddit users notices that certain hedge funds had begun naked short selling GameStop stocks. Shorting stocks is a term used when betting against the value of a stock. When you short a stock, you take out a loan in that stock, sell it, and then repurchase the same stocks at a lower price. You then repay the lender and keep the difference.

The good thing about shorting a stock is that it allows you to earn huge profits during downturns. However, the bad side of shorting a stock is that if the stock goes up, you have to then repurchase the stock at whatever the new market value is. Recognizing this fact, the Reddit group began pumping GameStop stocks.

Hedge Funds Lose Billions

This maneuver caused the hedge funds to lose billions. The losses were so great that many believed they reached out to the most popular trading platforms, such as the Robinhood trading app, and had them halt buying of these shares. The resulting decision dropped the price of GameStop stocks considerably. It also sparked both political and public backlash with a legal trial set to proceed in the coming weeks.

Recognizing that stocks could be halted much easier than cryptocurrencies, the same group of investors turned their focus on Dogecoin. The resulting campaign pushed Dogecoin back into center stage and to a new all-time high just shy of $0.08.

How to Get Dogecoin

Dogecoin is available on select exchanges at this time. Both Binance and Kraken support this coin. Best of all, these exchanges are fiat on-ramps. You can purchase cryptocurrencies directly using a debit or credit card. However, you will need to first fund your account and then convert your fiat to Bitcoin, ETH, or any of the other currency with a fiat pairing.

How to Store Dogecoin

There are a lot of ways to store Dogecoin nowadays. One of the best ways is in the Jaxx wallet. This wallet is available on Apple and Android devices for free. You can store Dogecoin and an excellent selection of other coins using this app. Impressively, you can even trade your coins directly from the wallet.

Dogecoin – Started as a Joke – Now it’s a World Recognized Project

Dogecoin has seen an incredible journey from starting out as a fun concept to donating $100,000 to charities, to becoming an integral player in the WSB Reddit drive. Only time will tell when the next Dogecoin breakout will occur, but if it’s anything like the last few, it will be a major event.

How a Series of Elon Musk Tweets Helped Lead Investors to Dogecoin, a Meme-Inspired Cryptocurrency Worth 4 Cents

February 1, 2021 3 min read

“One word: Doge.”

In December of 2020, tweeted this simple statement, alluding to the Shiba Inu-themed digital coin, which started as a joke and which, as of closing on the day of Musk’s tweet, was worth all of 0.4569 cents. It wasn’t even the first time Musk had tweeted about . In July, he tweeted this photo:

Despite support from one of the biggest business names in the world, Dogecoin failed to hit even 1 cent in 2020. That changed early on in 2021, as the crypto doubled in value from January 1 to January 2, reaching a value of 1.1427 cents at closing. However, over the past couple of weeks, the has been swept up in the deluge of investments inspired by Reddit’s WallStreetBets and the crypto-based SatoshiStreetBets, named after Satoshi Nakamoto, the presumed pseudonym of the bitcoin developer(s).

The crypto spiked from 0.7432 cents on January 27 to 5.1793 cents on January 29, before falling back to 3.9943 cents as of the time of this writing. Even that lower number represents a 437% growth in just a week, as more and more investors pour in and urge one another to “hold the line” and take Dogecoin “to the moon.” Of course, no one has been more thrilled about Dogecoin’s rise than the man who said way back in April of 2019, “Dogecoin might be my fav cryptocurrency. It’s pretty cool.”

However, Mike Winters at Lifehacker notes that there’s a significant difference between investing in Dogecoin and the short squeeze related to stocks like GameStop and AMC. The latter, he says, were “an opportunity to stick it to Wall Street while also making some money on the side. It actually makes sense as a trade, albeit a risky one.”

Dogecoin investment is different, in his opinion. He claims enthusiasts are simply bolstering the crypto’s value for fun, hoping to hold their positions until it reaches Reddit’s goal of $1. “In fact,” Winters writes, “there’s no particular reason why Dogecoin would be worth buying, aside from the fact that it’s basically Bitcoin named after a meme.”

If Musk has his way, though, maybe memes will be enough. He’s previously told news outlets that the most entertaining outcome would be if Dogecoin became the currency of earth in the future, explaining that while it may have started as a joke, “Fate loves irony.”

Dogecoin, Explained

There are several cryptocurrencies that people can invest in like Bitcoin, Litecoin, Bitcoin Cash and many more. However, there is one cryptocurrency out there that recently saw its value skyrocket: Dogecoin.

Dogecoin is a peer-to-peer, open source cryptocurrency that first came to be in 2013. When you first look it up, you might recognize its mascot: an all too familiar Shiba Inu named Doge; for those who don’t know, the Doge meme became popular that same year with its use of comic sans text over the Shiba’s picture.

It’s known as an “internet currency,” and a “fun” version of Bitcoin. Additionally, it works as an inflationary coin so there is no market cap for the number of coins that are created. This is both good and bad. It keeps the price low because the coin’s demand will never really exceed its availability, but that also means it will never really take off in the way that Bitcoin and other cryptocurrencies have.

A well-known use for Dogecoin involves “tipping” people who create or share content on the internet. You can also use it to buy goods and services, or trade it for other cryptocurrencies and traditional currencies.

The History of Dogecoin

Co-founders Jackson Palmer and Billy Markus came together to make the cryptocurrency a reality.

Palmer, a Product Manager at Adobe’s Sydney, Australia office, first came up with the term “Dogecoin” as a way to satirize the popularity of rising cryptocurrencies at that time. After tweeting about it and receiving positive feedback, he bought the dogecoin.com domain. He then left a note on the website and said that if anyone wanted to make Dogecoin a reality, they should get in touch with him.

At the same time, Markus worked as a Software Developer for IBM and created his own digital currency called Bells, based off of the currency used in the Animal Crossing video games. Like Palmer, his Bells cryptocurrency was a joke, but no one understood it. After he found out about Dogecoin and read the note on the website, he reached out to Palmer to help him make Dogecoin a reality.

Dogecoin officially launched on December 6, 2013 and on December 19, its value jumped by 300 percent after China banned its banks from investing in any form of cryptocurrency.

Dogecoin’s Recent Rise

Over the last few days, Dogecoin’s value has once again risen, all in the midst of the GameStop stock trading frenzy.

Last Thursday, its value hopped up by 800 percent. This is thanks to a recent Dogecoin resurgence by the Reddit community known as SatoshiStreetBets. One member of the group posted that Dogecoin is the “crypto GME,” with GME being GameStop’s stock ticker.

However, there is a difference between what is happening with Dogecoin versus what is happening with GameStop. With GameStop, buyers are creating a short-squeeze to force funds to cover their losses and that pushes the stock up higher. In Dogecoin’s case, people in the Reddit group want to hype up the cryptocurrency so they make more money. But in each situation, everyone contributing to the pushes is doing so just for fun.

Elon Musk also seemed to have contributed to the rise of Dogecoin in the last week. The Tesla founder tweeted a picture of a “dog version” of Vogue magazine called Dogue, which looked like he was supporting the Dogecoin movement. This was not the first time that Musk has tweeted about Dogecoin, though. Last December, his simple “One word: Doge” tweet made the cryptocurrency jump by 20 percent, while a previous July tweet made it spike by 14 percent.