What is the Dogecoin Price & How Does DOGE Work? | Coinread
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What is Dogecoin?

Find out all there is to know about Dogecoin – a digital payment system built as a joke, which has experienced huge speculation & volatility in the crypto markets.

Dogecoin – pronounced ‘dohjecoin’ – was founded towards the back end of 2013, with a vision to become a satirical ‘meme coin’. Although it may have been built to operate as a parody, with a Shiba Inu dog displayed as its logo, there is nothing funny about the rise of Dogecoin as an altcoin in the last 12-to-18 months. Launched as a hard fork of the Litecoin blockchain, Dogecoin was originally supported by loyal communities on Reddit and Twitter that used DOGE to tip users for good digital content on their respective platforms. Dogecoin was almost designed to be the antithesis of Bitcoin. With Bitcoin capping the number of BTC in supply, Dogecoin took the opposite approach, with as many as 10,000 new DOGE mined every minute and no limits on maximum supply.

Who created Dogecoin?

Dogecoin was the brainchild of software engineers Jackson Palmer and Billy Markus. The duo opted to develop a new tongue-in-cheek altcoin to poke fun at the immense speculation that was rife in the cryptocurrency space at the time. Both Markus and Palmer recognised the need for a peer-to-peer digital currency that carried broader appeal than Bitcoin.

How does Dogecoin work?

The protocol of Dogecoin was modelled on the Litecoin blockchain, which is underpinned by Scrypt technology within its Proof-of-Work (PoW) consensus algorithm. The integration of Scrypt technology was of particular interest to cryptocurrency miners. That’s because Scrypt prevents miners with SHA-256 Bitcoin mining resources from mining DOGE. Instead, Scrypt enables people to mine DOGE independently using even a graphics processing unit (GPU), but an application-specific integrated circuit (ASIC) is more beneficial as it is tailormade for generating hashes to ‘solve’ new blocks on the Dogecoin blockchain.

There are several subtle differences between Dogecoin and other altcoins. Perhaps the most significant difference being the infinite issuance of new DOGE, which is unlike most other cryptocurrencies which will have a cap on the number of coins permitted into circulation. It is said that the number of Dogecoins in use will increase by 4.1% in 2021 and a further 3.9% in 2022. One might wonder why Dogecoin is not considered an infinitely inflationary cryptocurrency given the circumstances. However, its predetermined inflation rates (3.5% in 2025, 3% by 2030, 2.3% by 2040 and 1.9% by 2048) are designed to maintain a stable value aligned with most fiat currencies.

Another aspect of Dogecoin that has become increasingly appealing since its rise to notoriety is its modest transaction fees. Transaction fees for DOGE are yet to cost over $0.01, which is a pittance when you consider that a single Bitcoin transaction can cost as much as $10.

How is Dogecoin (DOGE) created?

Leading cryptocurrencies like Bitcoin and Litecoin have a predetermined total supply of coins that must be mined to be added to the circulating supply. That equates to 21 million BTC and 84 million LTC respectively. On the flip side, Dogecoin does not carry a maximum supply cap, with its circulating supply set to rise continuously as further DOGE coins are created via mining.

New blocks of Dogecoin transactions are mined every 60 seconds on the Dogecoin blockchain, resulting in fast mining rewards for Dogecoin miners. For context, it takes ten minutes for every new block of Bitcoin transactions to be mined on the Bitcoin blockchain.

Can you mine Tezos (XTZ)?

It is possible to mine Dogecoin in three ways. First and foremost, you can mine new blocks on the Dogecoin blockchain individually. Using just a GPU and dedicated mining software like EasyMiner, it is possible to mine new blocks and receive mining rewards in DOGE as a result. The profitability of solo mining DOGE has recently been called into question since competition for DOGE mining has increased. Subsequently, solo DOGE miners are required to invest heavily in state-of-the-art equipment and are hit with sky-high energy bills.

The cost-effective approach to mining Dogecoin in 2021 is to join a DOGE mining pool. Investing in a DOGE mining pool increases your chances of being that all-important block validator by pooling your collective resources to improve your hashing power to solve those complex cryptographic puzzles. Typically, a DOGE mining pool will require users to invest between 1%-3% in fees.

The third and final method to mine DOGE is through cloud mining. Cloud miners will pay a monthly fee to ‘rent’ cloud computing resources from a data centre. Dogecoin is then mined on your behalf at the data centre through a mining pool. All DOGE mining rewards are then shared, with those paying for the most computational resources receiving the biggest payouts.

Dogecoin price: How much is DOGE worth?

Within days of the launch of Dogecoin in December 2013, the value of DOGE soared 300%. The value was struck by the cryptocurrency’s first hacking, which saw millions of DOGE coins stolen via the digital wallet provider Dogewallet. That didn’t appear to deter users that saw the potential in Dogecoin as a cryptocurrency for social media tipping and other basic services. In early 2014, trading volumes of DOGE surprised the crypto space by overtaking Bitcoin and many other altcoins, despite its market capitalisation being vastly inferior to BTC. Once static block rewards were introduced for DOGE miners in March 2014, it was one-way traffic for the coin in many ways. The value of DOGE hit an all-time high of $0.017 during the 2017/18 cryptocurrency ‘bubble’. By the summer of 2020, the value of DOGE soared immeasurably having been involved in a viral TikTok challenge, encouraging users to buy it and “all get rich” and push the value of DOGE towards the $1 barrier.

In May 2021, the value did break the $0.50 mark, resulting in a year-on-year rise of 20,000% in value. Elon Musk was invited onto the iconic US chat show Saturday Night Live that month and the price of DOGE crashed 43% after his appearance, with many believing the price had soared prior to his appearance in the hope that Musk would extoll the virtues of DOGE.

During September 2021, the price of Dogecoin has plunge 31%, underlining the distinct volatility that surrounds DOGE and other so-called ‘meme stocks’. Nevertheless, with a circulating supply of 131.4 billion DOGE and a market cap worth £21.4bn, Dogecoin is still a major player in the crypto space.

What is the price of Dogecoin (DOGE) today? Check out our Dogecoin currency page to get real-time price charts of DOGE’s price movements across hourly, daily, weekly monthly, yearly and all-time periods. You can use our graphs to compare Dogecoin’s meteoric rise in 2021 with other leading altcoins too.

What is a Dogecoin (DOGE) wallet?

There are multiple types of cryptocurrency wallet that support the storing of DOGE. The most secure being the hardware wallets such as the Ledger Nano S and the Trezor Model T. These hardware devices house your Dogecoin in what’s known as ‘cold storage’. This means your crypto wallet’s private keys are stored offline, away from the prying eyes of cybercriminals. The only way your assets could be stolen is if you misplace your physical hardware wallet and it falls into the wrong hands.

Desktop and mobile cryptocurrency wallets are also an option for those looking to invest in DOGE for the first time. Multi-coin desktop and mobile wallets can be installed onto your desktop, laptop, smartphone or tablet, allowing you to manage your Dogecoin through your computer or mobile device. It’s also possible to use exchange wallets to house your DOGE, with many cryptocurrency exchanges offering their own wallets, providing a seamless transition for your assets from the exchange into your own wallet. Just be mindful that the private keys of exchange wallets are in the possession of the crypto exchange you use rather than yourself, which can leave your assets vulnerable if your chosen exchange is the victim of an unwanted hacking.

Whichever type of Dogecoin wallet you choose, be sure to set a strong password and protect the devices on which your wallet is installed. Utilise anti-malware and antivirus software to safeguard your device from the latest cyber threats.

How to buy Dogecoin (DOGE)

Thinking of buying some DOGE to add to your cryptocurrency portfolio? Many of the major cryptocurrency exchanges now allow you to buy and sell Dogecoin. The likes of Coinbase, Binance and Gemini all support DOGE, with crypto-to-crypto and fiat-to-crypto transactions permitted.

When trading a cryptocurrency for DOGE on an exchange, make sure that DOGE is listed first in your chosen trading pair e.g. DOGE/BTC, DOGE/ETH or DOGE/USD for fiat-crypto transactions.

How to sell Dogecoin (DOGE)

The easiest way to sell DOGE coins is with the same cryptocurrency exchange you used to buy them. You can sell Dogecoin using the same crypto-crypto or crypt-fiat trading pairs listed on your chosen exchange. Just remember, when selling your DOGE on an exchange, ensure DOGE is listed second in your chosen trading pair e.g. BTC/DOGE, ETH/DOGE or USD/DOGE.

Reasons to be excited by Dogecoin

  • It’s viewed as a greener alternative to Bitcoin Millennial and Gen Z cryptocurrency investors are increasingly conscious of cryptocurrency’s impact on the wider environment. Energy-hungry cryptocurrencies are beginning to get short shrift, with altcoins like Dogecoin particularly in favour. That’s because Dogecoin requires only 0.12 kilowatt-hours of energy to process a transaction, compared with the 707 kilowatt-hours required to process a Bitcoin transaction.

  • It has a growing celebrity fan club There is no question that Dogecoin has a significant community of supporters among celebrity cryptocurrency investors. Its biggest backer is unquestionably Tesla CEO and tech pioneer Elon Musk, who once described Dogecoin as “the people’s crypto”. Each time Musk tweets positively about Dogecoin or the price of DOGE its value typically surges in the crypto markets on exposure grounds alone. Other prominent exponents of Dogecoin include Jake Paul, Snoop Dogg and Gene Simmons. US Major League sports franchises like the Oakland A’s are also supporting DOGE as a credible method of payment.

  • Dogecoin is gradually gaining acceptance from large-scale entities Although Dogecoin was originally something of a laughing stock, this meme coin is no longer derided in the crypto space. It’s now widely accepted as a medium of exchange for goods and services, with a growing number of real-world use cases. We’ve already touched on the Oakland A’s and their acceptance of DOGE for seats at their baseball games. NBA franchise the Dallas Mavericks also accept DOGE for tickets and team merchandise. Circulation is also rife that Elon Musk is set to accept Dogecoin for purchases of new Tesla vehicles. In addition, the biggest e-commerce platform for precious metals in the US, JM Bullion, recently approved seven cryptocurrencies to use to buy gold and silver. Dogecoin was one of that lucky seven.

3 months ago