What is Dogecoin?

Dogecoin is an open-source, peer-to-peer cryptocurrency. It is the first-ever memecoin that was initially created to poke fun at the cryptocurrency world. However, today it has firmly established itself as one of the most valuable cryptocurrencies in the world. Its market cap reached almost $88 billion during the May of 2021. Much of its success is a result of being backed by influencers from across the world, the most prominent of them being Elon Musk.

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Dogecoin is based on the popular internet meme, called ‘doge’ which is basically a Shiba Inu dog that speaks in broken English. It was meant to be a satirical representation of cryptocurrencies, but soon it became popular among the people. Elon Musk named it the “People’s crypto”. Dogecoin is primarily used by people to tip content creators on Twitter and Reddit. It has also been used to raise funds for various projects and ventures.

Who created Dogecoin?

Dogecoin was created by software engineers Jackson Palmer, and Billy Markus in 2013. The origin story behind Dogecoin is quite interesting. Jackson Palmer, who was a product manager at Adobe Inc, sent out a tweet as a joke, claiming that he was investing in a coin known as Dogecoin. Although he tweeted in jest, many people supported the idea that there was the need for a lighthearted token in the market. So Palmer teamed up with Billy Markus, who was a software developer at IBM and created Dogecoin. According to Palmer, the whole project was meant to be a hobby or a side project, but very quickly a community developed around the project and it went farther than they had anticipated.

Billy Markus designed the software behind Dogecoin and based it upon Luckycoin which itself was derived from Litecoin. Markus is popularly known as ‘Shibetoshi Nakamoto’ which is a direct reference to the mysterious creator of Bitcoin, Satoshi Nakamoto. Dogecoin was formally launched on the 6^th of December 2013, and within 2 weeks its value rose about 300%. In June 2014, The Dogecoin foundation was created to preside over the currency’s code. In 2015, Jackson Palmer left Dogecoin, citing the presence of toxic elements within the community.

How it Works?

Dogecoin’s consensus mechanism is Proof-of-Work (PoW), which is the same used by the likes of Bitcoin, and Litecoin. Basically what Proof-of-Work means is that the miners who want to mine Dogecoin have to dedicate their computing power to verify blocks and earn rewards in the form of Dogecoin. This computing power is usually in the form of GPUs and thus miners are required to have appropriate hardware before mining Dogecoin. Dogecoin was created using Litecoin’s scrypt technology, a hash function that makes Litecoin faster to transact with than Bitcoin.

In the beginning, Dogecoin was capped at 100 billion coins, however, later on, it was changed to an unlimited supply. This means that there is no limit to the Dogecoin that can be mined. One of the most important features of Dogecoin is its fast transactions, and low transaction fees, which made it insanely popular among those who are annoyed by the high fees, and slow speeds of traditional crypto heavyweights like Bitcoin and Ethereum.

Dogecoin Community

The most important part of Dogecoin’s journey so far has been its amazing community. The widespread adoption by the community has really helped Dogecoin to not only stay alive but prosper. There are more than 300,000 members of the subreddit, r/dogecoin. The community there is generally known to be friendly and welcoming. The great thing about its adoption by the general public has been that most of the use cases we have seen so far have been for noble causes. In 2014, the Dogecoin community raised $55,000 in DOGE, to sponsor NASCAR driver Josh Wise. Similarly, the Doge4Water initiative was launched to raise thousands of dollars, to provide clean water access in Kenya.

What is DOGE?

DOGE is the native cryptocurrency of the network. It is an inflationary token, which means that it has an unlimited supply. This provides stability to the price of the token, however, it keeps the price very low. The primary function of DOGE within the network is to provide a reward to the miners who mine by solving complex mathematical equations, using their computational resources. Outside the network, DOGE is mostly used by its active community to tip content creators on Twitter and Reddit. It reached its all-time high in May 2021. At the time of writing, more than 130 billion DOGE are in circulation, and its market cap exceeds $34 billion.

Concerns

The most pressing concern regarding Dogecoin is that its an inflationary token. Basically what this means is that there is no limit to how many tokens will be released into the market, hence more and more tokens will continue to be minted. This creates a big problem, as it doesn’t allow scarcity to be created and hence the price of Dogecoin remains low. This also discourages long-term Hodlers from holding on to the currency as it can be very volatile.

Another problem is the lack of real-world application. Unlike other Altcoins which have specific or multipurpose use cases, it doesn’t have any specific utility aside from transferring value. It is primarily used on Reddit, by users to tip other content creators, however other than that, it doesn’t have much going. Similarly, the developers of Dogecoin are almost all volunteers, and there hasn’t been a lot of significant development of the project. However after its price surge, and interest from the likes of Elon Musk, there is renewed hope that the project will be further developed.

Where to Buy DOGE?

You can purchase DOGE on most major exchanges for example through KuCoin exchange similarly to how you would buy another cryptocurrency. You can either place a market buy or a limit buy. With a limit buy, you determine the price you are willing to pay, and your order gets filled once the token price reaches your limit price. If you want to get your hands on the token quickly, you can place a market order, where you agree to pay the current price and have your order filled almost immediately. If you are interested in purchasing DOGE you can do so by visiting KuCoin or Binance.Us or even iTrustCapital

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Text source: CryptosRus

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