When it comes to cryptocurrencies, most people believe that Bitcoin and Ethereum are all there is. But the truth is there are so many cryptocurrencies out there that it is difficult to keep track of them. Today let’s talk about one of those cryptocurrencies–Dogecoin.
This is a cryptocurrency that started as a joke, a fun take on other cryptocurrencies. Its mascot, a popular meme that was already well known in the internet community. There have been other “joke” cryptocurrencies in the past, an example being Bitcoin Clashic. People didn’t really give these types of cryptocurrencies a second look.
However, Dogecoin was different; when it came into the picture, the internet went ballistic and embraced it with open arms. We don’t know what it was, whether it was the mascot Shiba Inu or something else. As of April 19, 2021, the cryptocurrency that started out as a joke has become the sixth-largest cryptocurrency by market capitalization with people rushing to buy Dogecoin.
Let’s talk about Dogecoin and answer some questions about it, including how it became so popular and how to buy it.
What Is Dogecoin?
Let’s look at how Dogecoin started out. In 2013, the world was starting to notice cryptocurrencies, especially bitcoin. This was when Billy Markus and Jackson Palmer decided to create Dogecoin, with two intentions in mind. They wanted it to serve as a cryptocurrency that could reward content creators and engage the community in activities, a currency that is more readily accessible to people. They also saw it as a satirical take on cryptocurrencies in general and the sudden and ridiculous explosion in their valuations.
The cryptocurrency operates in a similar way to Bitcoin and other cryptocurrencies, as it is a decentralized, peer-to-peer currency. It enables quick, secure transactions. Dogecoin does not have a limited supply, and it can be mined relatively easily. It uses a Proof-of-Work consensus mechanism, using Scrypt Technology like Litecoin.
Billy Markus and Jackson Palmer decided to use a popular meme, known as the Doge meme, as the symbol and the name of the new cryptocurrency. The founders of Dogecoin used the meme to spread the word about the new cryptocurrency, and it worked wonders.
Today, Dogecoin, a cryptocurrency that probably started out as a joke, is the 6th largest cryptocurrency globally.
How Did Dogecoin Start?
Dogecoin has its roots in Luckycoin, created as a fork of the cryptocurrency. Luckycoin is a fork of Litecoin, which is why Dogecoin has several similarities to Litecoin. One similarity is the use of the Scrypt algorithm.
Dogecoin was started in 2013 as a satirical take on cryptocurrencies and their ridiculous valuations. They combined a cryptocurrency and a meme, and the result was Dogecoin. Of course, they did not expect the currency to gain so much popularity.
Even though Dogecoin has had its ups and downs, today it has become one of the largest cryptocurrencies in the world, with a market capitalization that reached $52 billion just a couple of days ago. Currently, Dogecoin’s market capitalization is at U.S. $43 billion, thanks to people rushing to buy DOGE.
How Does Dogecoin Work?
Dogecoin works like other cryptocurrencies such as Bitcoin and Litecoin. It is not a Turing-complete currency and cannot facilitate smart contracts. Dogecoin was created through a fork of Luckycoin, with the founders copying the Luckycoin software as it is an open-source protocol.
Luckycoin was created through a fork of Litecoin, a fork of Bitcoin, so unsurprisingly, Litecoin functions a lot like Bitcoin. It is a peer-to-peer, decentralized cryptocurrency that uses the Proof-of-Work consensus mechanism. Miners validate all transactions that take place on the network, adding all transactions to the blockchain and securing the integrity of the network.
One aspect of Dogecoin that sets it apart from Bitcoin is the use of the Scrypt mining algorithm. Scrypt mining uses less energy and has lower hash rates than Bitcoin’s mining algorithm.
Initially, the supply of Dogecoins was capped at 100 billion, with the value of block rewards to be halved every 100,000 blocks until block 600,000. After this block, the reward for miners was fixed at 10,000.
However, sometime in 2014, the developers decided to make Dogecoin an inflationary digital currency, removing the cap on its supply. It takes approximately 1 minute to mine one block of Dogecoin, significantly faster than other cryptocurrencies.
How Did Dogecoin Become So Popular?
How did a currency that started out as a joke become so popular? The founders centred the cryptocurrency around a meme of a Shiba Inu dog. The decision to have a total supply of 100 billion Dogecoins was another decision that was supposed to make the cryptocurrency undesirable. The crypto wasn’t considered a serious cryptocurrency.
As soon as Dogecoin went live, it became an instant hit with the internet community. It was easy to mine and was easy to acquire. However, what people loved about it the most was the outrageousness of it all. People could finally play around with cryptocurrencies. The value of Dogecoin skyrocketed by over 300%.
By 2014, the Dogecoin community set out to prove that the cryptocurrency did indeed have utility. They started raising funds through “DOGE Donations” that helped support a wide range of causes. The first time the effect of this was seen when the community raised $30,000 to help the Jamaican bobsled team to be able to travel for the Winter Olympics in Sochi. This was the first time that Dogecoin was talked about on such a large scale, with the story picked up by prestigious publications like Business Insider, The Washington Post, and The Guardian. As a result, Dogecoin transactions briefly overtook every other cryptocurrency (U.S. Dollar equivalent) in mid-January of 2015.
The dogecoin community also started an initiative, “Doge4Kids,” that managed to raise $30,000 for a charity that provides service dogs to children that have special needs. The Dogecoin community also sponsored an Indian Luger who needed funding to make it to the Winter Olympics. The community managed to raise $7,500 worth of Dogecoins with 24 hours, allowing the Luger, Shiva Keshavan, to be able to enter the competition.
The Dogecoin community also sponsored Nascar driver Josh Wise, who was struggling to secure sponsorship and enter the Talladega Superspeedway race. The Dogecoin community-sponsored Wise and his car, raising over 67 million DOGE ($55,000). The car was covered with the Shiba Inu meme, and this was the first time that Dogecoin had advertised at such a significant sporting event.
Another major push to Dogecoin came from celebrity endorsements, who frequently backed the cryptocurrency publicly. The list of celebrity backers of Dogecoin includes the likes of Gene Simmons, Mia Khalifa, Snoop Dogg, and the most prominent one, Elon Musk. All these factors have played an enormous role in Dogecoin’s burgeoning popularity, sparking a mad rush to buy Dogecoin.
Today, Dogecoin has become one of the most popular cryptocurrencies in the world, with people rushing to buy DOGE, pushing its valuation to new heights.
How to Mine Dogecoin?
Mining is the process through which new cryptocurrencies are mined and entered into circulation. Cryptocurrencies like Dogecoin utilize a public ledger called a blockchain. All data related to transactions are stored on the blockchain. The transactions are grouped together into blocks which have to be checked and verified by the miners. The miners are rewarded for validating and confirming transactions. The process of being rewarded is called mining.
To mine Dogecoin, you have to do the same, validate and confirm transactions. Dogecoin can be mined in two ways; You can mine it solo (by yourself) or join a mining pool. A mining pool would require you to pay a certain fee to join. When the mining pool successfully mines Dogecoin, you receive only a tiny portion of the total reward earned. However, mining pools have a higher success rate and mine blocks more often than solo miners. Even if you earn a smaller reward, the mining pool will be mining blocks more frequently, allowing you to earn frequent rewards.
If you mine on your own, you will have to wait a long time to confirm a transaction, thanks to competition. It could take you anywhere between a week or months to verify your first transaction and mine a block.
To mine Dogecoin, you need some equipment to help you get started.
- Your PC CPU: The CPU in your desktop is powerful enough to start mining Dogecoin. However, it isn’t recommended to do so as mining can lead to computers overheating.
- Graphics Card or GPU: These are used to improve the graphics on computers but can also be used to mine Dogecoin. There are several GPUs in the market that you can choose from. Popular ones being Nvidia GeForce GTX.
- Scrypt ASIC Miner: Scrypt ASIC Miners are designed to mine Scrypt based currencies like Litecoin and, you guessed it, Dogecoin. ASIC miners are extremely powerful machines but can also be a tad expensive.
You will also need to choose mining software based on the type of hardware that you are using.
Are Bitcoin and Dogecoin Similar?
Dogecoin, as mentioned earlier, was derived through a fork of Luckycoin, which was a fork of Litecoin. Litecoin is a fork of Bitcoin, so we can assume that Dogecoin and Bitcoin are similar in some aspects. Both Bitcoin and Dogecoin use the Proof-of-Work consensus mechanism, and like bitcoin offers quick and secure transactions, and like Bitcoin, Dogecoin is also decentralized. However, these are the only similarities between the two cryptocurrencies.
Bitcoin was created as an alternative to the current financial system, free from the control and influence of third parties. Even though both Bitcoin and Dogecoin use Proof-of-Work, the former uses the SHA-256 consensus mechanism while the latter uses Scrypt technology.
Dogecoin was created as a joke cryptocurrency, although it relied on bitcoin’s principles. Dogecoin was described as a meme-currency at the time of its launch. Dogecoin also has fewer block times than Bitcoin, with it taking just one minute to mine a block compared to Bitcoin’s ten minutes.
Where Can You Buy DOGE?
Before we get to how to buy dogecoin, we need to know where we can buy it. Well, You can get your hands on Dogecoin in several ways. The best way to buy DOGE is through a cryptocurrency exchange or trading platform. There are several that you can choose from, such as VirgoCX, Canada’s top regulated cryptocurrency trading platform.
How To buy Dogecoin?
There are only a few steps to follow if you want to learn how to buy Dogecoin on VirgoCX.
- Create an account with VirgoCX
- To create an account, enter your email address and set up a strong password to secure your account.
- Once you have created your account, you will need to verify your account by providing some basic information.
- Now that your account is verified, you can buy dogecoin, however, before buying it you have to deposit funds into your account.
- Once you have deposited funds into your account, you are ready to buy Dogecoin. Or any other cryptocurrencies that you want. You can even buy Bitcoin if you wish.
- At VirgoCX, you can enjoy the best pricing and we charge zero trading and deposit fees.
Dogecoin has caught the imagination of the cryptocurrency community. Clearly, it has been riding on the wave of popularity that the attention from the likes of Elon Musk has given the crypto. Dogecoin could be the place to start your journey into the world of cryptocurrencies.
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