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An Introduction to Dogecoin

BitForex Editor
Nov 16, 2020

When the word cryptocurrency comes up in conversations, the first thing that comes to people's minds is Bitcoin or Ethereum. A lot of individuals base their cryptocurrency knowledge on only Bitcoin and Ethereum, forgetting that there are hundreds of cryptocurrencies out there, some of which may be better than both Bitcoin and Ethereum. Cryptocurrencies are more than just digital assets as they can also be communities too. Take, for example, Dogecoin, which is one altcoin with a steady growing community. However, to date, some are still unaware of its existence, which is why this article will dive into everything relating to what Dogecoin is all about.

What is Dogecoin?

Dogecoin is a cryptocurrency that was inspired by a popular meme referred to as Doge, which was the picture of a Shiba Inu Dog along with colorful phrases that were meant to convey its inner monologue.Though its creation was based on sarcasm and jokes, its blockchain still provides certain advantages.

Dogecoin was launched towards the end of 2013 and quickly rose to prominence at a period when developers were taking steps towards exploring numerous possibilities afforded by the creation of Bitcoin. Its creation was an attempt to bring accessibility and personality to the new technology, which in turn propelled Dogecoin in 2014 into the center of industry conversation.

What is more surprising to everyone, even the creators of Dogecoin is the energy of its vibrant online community as well as its enthusiastic fanbase. This is very true, as earlier stated, though Dogecoin started as a joke, it, however, gained a massive following after its creation. In late 2017, it participated in the Cryptocurrency bubble, which resulted in an increase in the values of many coins. Even at this present moment, Dogecoin is one cryptocurrency that is still exchanged, as well as been used to tip content creators. Dogecoin is similar to other cryptocurrencies because it allows its users to exchange value over the internet without the need for traditional financial gatekeepers.

Brief History Of Dogecoin

In late November 2013, a product manager at Sydney, Australia Office of Adobe Inc by the name of Jackson Palmer, made a tweet which was about investing in Dogecoin. The tweet has since been deleted, but Jackson's tweet was more of a joke with a bit of sarcasm. However, he got positive feedback on social media, after which he purchased the domain dogecoin.com. At the same time, in Portland, Oregon, a software developer named Billy Markus wanted to develop a digital asset, but this proved difficult as he was unable to further his goals. He got wind of the rave about Dogecoin and contacted Palmer in other to get his permission to create the software behind an actual Dogecoin.

The Dogecoin code was based on Luckycoin, whose code was also gotten from Litecoin, which originally made use of various random rewards gotten for block mining, which changed in March 2014 to a fixed reward. Dogecoin was launched on December 6, 2013, by Palmer and Markus, and in December 2019, just two weeks after its launch, its value jumped 300%. Dogecoin was introduced as a "fun" version of Bitcoin, which used a Japanese dog, Shibu Inus, as its logo. Its casual presentation doused tensions and eased the mood of the burgeoning crypto community. Its unlimited supply, as well as the use of scrypt technology, was an argument for a more consumer-friendly, faster as well as adaptable version of Bitcoin.

The Dogecoin community made a donation of 27 million in Dogecoins, which is worth an estimated 30,000 dollars in January 2014 to help pay for the trip of the bobsled team from Jamaica to the winter games in Sochi. That same year in March, the Dogecoin community made another donation of 11,000 dollars' worth of Dogecoin to help build a well in Kenya and 55,000 dollars' worth of Dogecoin to sponsor Josh Wise, a NASCAR driver who painted his car using the Dogecoin logo. Within a year of Dogecoins launch, it did not only have an ever-increasing loyal fanbase but also a market capitalization of 20 million dollars.

How Does Dogecoin Work?

Though notable changes have been made to the Dogecoin protocol, it was, however, based on Litecoin. Dogecoin, like Bitcoin, makes use of a blockchain that appends block through proof of work. Network participants, in this case, can act as full nodes after installing open-source software on their device or machine. For those who are not familiar with blockchain technology, it simply means that each participant maintains the total copy of the database, which has all transactions.

Dogecoin system is decentralized as no individual or administrator has control of it. Users instead send information directly to one another as well as depend on cryptographic techniques in other to determine whether their peers are honest in their dealings. Similar to Bitcoin, anyone operating the Dogecoin software through a process known as mining can dedicate computer power in exchange for the opportunity of getting newly minted cryptocurrency.

Dogecoin's total supply was initially capped at 100 billion Doge; however, a few months after its launch, developers eliminated it so as to make its money supply inflationary. The Dogecoin mining process was integrated with that of Litecoin's in 2014, which meant that anyone could mine both Litecoin and Dogecoin without extra work. over 113 billion Doge have been mined as of February 2018, plus the software continues to release 5 billion Doge every year.

What Can You Do With Dogecoin?

Similar to other cryptocurrencies, Dogecoin can be gotten through various ways like, for example, by mining it yourself or accepting it as a means of payment for goods and services. However, the easiest method remains purchasing it through a cryptocurrency exchange, which can be done by buying bitcoin or any other popularly used cryptocurrency then proceeding to trade it for Doge.

Once you have acquired your Dogecoin, you can make use of it like any other cryptocurrency, perhaps choosing to trade against other coins, holding it for a long term, or choose to exchange it for goods or services.

Irrespective of Dogecoin being a digital asset whose existence was based on an internet meme, it has, however, successfully developed a loyal and dedicated community of followers as well as users, and years after its launch, it has still managed to maintain a market cap surpassing millions of dollars. Only a few cryptocurrencies have been able to have the kind of impact that Dogecoin had even though it started as a meme coin.

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