In the cryptocurrency community, Dogecoin is becoming increasingly popular. What began as a joke is now the future star of the industry. Dogecoin is a topic that everyone is discussing in some capacity. Those familiar with and unaware of it are interested in learning more about Dogecoin.
It’s important to understand cryptocurrency, including Dogecoin, before investing. In this article, you’ll explore Dogecoin’s origins and significant characteristics, how it’s mined, and everything you need to know about investing.
Table of Contents
What is Dogecoin?
An open-source, peer-to-peer cryptocurrency, Dogecoin, was developed as a parody of Bitcoin and the crypto market. It began as a lighthearted joke among crypto enthusiasts, but it swiftly grew to become one of the most popular cryptos in use today.
The Dogecoin brand logo is based on a popular meme from the time, which depicted a Shibu Inu dog. It was founded in December 2013 and was based on the same core technology as others, such as Bitcoin and Litecoin.
Scrypt is a simplified variant of the hashing algorithm used in Dogecoin. In addition, the “proof-of-work” protocol enables it to accept work from other Scrypt-based networks. Mining Dogecoin is also less power-intensive than mining Bitcoin.
What is the Origin of Dogecoin?
On December 6, 2013, two software programmers, IBM engineer Billy Marcus and Adobe engineer Jackson Palmer, developed Dogecoin. It began as a “joke” for prominent cryptocurrencies such as Bitcoin, inspired by the popular Doge meme featuring a Shiba Inu.
But it was an instant success after that, and Dogecoin is now worth roughly 45 billion dollars in the cryptocurrency market. There was little public attention paid to Dogecoin for many years because it began as a joke. The average Dogecoin price between May 2015 and May 2020 was less than a fifth of a cent.
The rise of Dogecoin
A large community wanted to play around with cryptocurrencies freely in 2013, making Dogecoin very popular. Later, online sites like Reddit and Dogecoin started awarding Dogecoin to its content creators, making Dogecoin spike the trading value of other cryptocurrencies, notably bitcoin, in 2014.
Elon Musk, the most notable Dogecoin supporter, began constantly tweeting about a faux “Doge” magazine cover, which caused the price of this parody cryptocurrency to increase. Shortly afterward, other celebrities like Snoop Dogg and Gene Simmons began tweeting about and supporting Dogecoin on social networks.
Dogecoin’s value soared over 600% after Elon Musk tweeted, “Doge barking at the moon” in April 2020. Due to these actions, Dogecoin is now worth $41 billion, and from a dogecoin price prediction, it will continue to soar.
When Dogecoin was first released, it was said to have a max supply of 100 billion coins. Since then, the creators have removed the cap, allowing endless coins. There are fewer than 130 billion Dogecoins as of June 14, 2021.
How Does Dogecoin Function?
Like all other cryptocurrencies, including Bitcoin and Ethereum, Dogecoin is based on Blockchain technology. Blockchain is a decentralized and secure digital ledger that records all cryptocurrency transactions without a centralized authority.
Features of Dogecoin
In comparison to other digital currencies, Dogecoin has a few distinctive features. To begin with, Dogecoins aren’t finite. The most famous cryptocurrency, Bitcoin, has a lifetime cap of 21 million coins.
Another element that distinguishes Dogecoin from other prominent cryptocurrencies, such as Bitcoin, is the method through which it is mined. Dogecoins can be mined much quicker than other digital currencies since they employ Scrypt technology. Other features include:
There is no maximum supply
Bitcoin and other cryptocurrencies have a maximum supply, but Dogecoin does not. Miners get 10,000 DOGE for each block, which is generated every minute. The process entails the creation of 14,400,400 new DOGE tokens per day. These tokens are then sold on the market or stored in miners’ wallets. Currently, there is about 132.28 billion DOGE in circulation, with a price of $0.08.
Decentralization is part of the security that governs most cryptocurrencies, which means that security is in the hands of a global community of users. A cryptocurrency’s decentralization is often defined by the number of nodes on its network and the spread of miners.
According to The Street, Dogecoin has around 1,090 nodes, compared to 10,000 nodes spread over 97 countries for Bitcoin. As a result, the Dogecoin network is vulnerable to a 51% attack, in which a single person or organization controls more than 50% of the network.
The Majority Holds a Few Dogecoins
Many Dogecoin wallets have a large number of DOGE in circulation, which is a danger since they have undue power over price volatility and market liquidity. Approximately two-thirds of the total DOGE supply is held by an average of 0.002% of Dogecoin wallets. This is different from Bitcoin, which has uniformly dispersed wallet ownership.
Despite its lower value than Bitcoin, it is still a popular and unique crypto that many experts predict will have a bright future. Dogecoin, like any other cryptocurrency, carries a certain amount of risk. A great way to experience cryptocurrency is to buy a few coins and familiarize yourself with it, but you should only sink a little of your hard-earned money into one. If you are new to all this, you can use it to explore the crypto world even if you don’t think it is a good investment option.