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What is a DOGE Coin and How Does it Work?

by Sandip Das from
What is a DOGE Coin and How Does it Work?

If you are looking forward to diving into the memecoin trend, this post ‘What is a DOGE Coin and how does it work?’ is a must-read for you. Dogecoin (DOGE) took the crypto world by storm during the 2020-21 crypto bull run. This memecoin still has a lot of steam left. Also, DOGE has its vibrant DOGE community, die-hard fans, and staunch supporters - most prominent of which is the world’s richest person Elon Musk.

As the crypto market seems to be heading towards another bull phase in 2024, DOGE can provide stellar returns. Even though DOGE has limited real-world applications, its popularity, and sheer momentum can lead to significant price appreciation. In this beginner's guide to DOGE, we are going to explain what is Dogecoin, how DOGE works, and what DOGE is used for. Moreover, in this guide to Dogecoin, we are going to explore the questions - ‘Is Dogecoin a good investment?’ and ‘Where to purchase Dogecoin’.

1. DOGE explained - what is Dogecoin?

In terms of technology, Dogecoin (ticker symbol: DOGE) is an open-source peer-to-peer cryptocurrency based on blockchain technology. However, initially, Dogecoin started only as a joke based on the popular doge meme and an image of a Shiba Inu dog as its logo. Dogecoin was launched in 2013 by Jackson Palmer (a product manager at Adobe) and Billy Markus (a software developer at IBM). Their initial intention was to make a parody of all the hype around Bitcoin and the overall crypto developments.

Because of its origin as a joke, DOGE is considered the first memecoin. A memecoin is a cryptocurrency that is not intended for a serious use case. Rather, memecoins are created only for fun. However, eventually, DOGE grew to become more than a memecoin.

Dogecoin’s popularity soared during the 2020-21 crypto bull phase in which the overall crypto market reached a whopping $3 trillion market valuation. In May 2021, DOGE reached its all-time high market capitalization of $90 billion making it one of the most popular crypto assets. Currently, DOGE is the 10th most valued cryptocurrency with a current market value of more than $12 billion (as of 22 Feb 2024).

2. How does Dogecoin work?

Dogecoin is a cryptocurrency that can be used as a mode of payment as well as a store of value. Since DOGE is a crypto, you don’t need a bank or any other financial intermediary to send or receive DOGE. Starting from decentralization to privacy, security, and anonymity, Dogecoin shares the key features with other prominent cryptocurrencies like Bitcoin (BTC) or Litecoin (LTC). For more information about BTC, read our 'Bitcoin Explained' guide linked here.

DOGE’s creators adapted the open-source code of BTC and LTC (a Bitcoin-fork) to create Dogecoin’s code. Therefore, it shares some of the characteristics of these coins. However, one important DOGE feature that differentiates it from BTC is that DOGE has an unlimited supply (compared to BTC’s supply cap of 21 million BTC). DOGE’s unlimited supply makes it unreliable as a store of value. However, Dogecoin has a faster transaction speed compared to Bitcoin, and it has lower transaction fees. These make DOGE suitable for making small payments such as paying a tip.

Similar to Bitcoin and Litecoin, the Dogecoin blockchain’s consensus mechanism is proof of work (PoW). PoW involves solving complex mathematical puzzles to validate transactions and complete blocks. Since PoW involves mining, users can mine Dogecoin to earn additional income. If you want to delve deeper into consensus mechanisms in crypto, here is our detailed POW vs POS guide to help you.

3. Will Dogecoin be worth anything?

Even though Dogecoin purely started as a memecoin, it eventually became widely popular and earned its distinctive place in the crypto world. Because of its solid technological base, Dogecoin can have various real-life use cases. For instance, the Dallas Mavericks NBA team started accepting DOGE as a payment mode for tickets and merchandise way back in 2019. Similarly, you can use DOGE to buy tech products on the e-commerce website Newegg.

Dogecoin’s use cases are expanding as more and more e-retailers, physical stores, and other merchants are accepting DOGE as a mode of payment. In addition, DOGE can be used to pay for tips, make donations, recharge mobile top-ups, and make bill payments. These real-life applications can increase the demand for DOGE. Therefore, even with its lighthearted origin, Dogecoin can potentially establish itself as a valuable crypto asset.

4. Can Dogecoin explode in 2024?

It depends on several factors like the sentiment in the overall crypto market, demand for DOGE, Dogecoin’s real-life adoption & use cases, and regulatory changes. Crypto is increasingly getting recognized as an excellent technology and a viable alternative to traditional finance. Moreover, we can see developments of comprehensive crypto regulations in the US and EU to protect investors’ confidence. These can have a positive effect on the overall crypto market.

Moreover, after a brutal bear market in 2022, cryptos experienced a positive consolidation in 2023. This is a positive indication for the crypto market. Also, Bitcoin halving, one of the most anticipated crypto events of the year, is expected to take place in April 2024. It has historically proven to be a bullish event for the crypto market. You can learn more about the differences between bear and bull market in our concise guide linked here.

Considering all these, we are likely to experience another bullish phase in the crypto space in 2024-25. In the upcoming bull run, DOGE can be one of the best-performing cryptos given its strong community and popularity. The fact that DOGE is the 10th most valued crypto is an indication of investors’ confidence in it. Another reason for including DOGE in your crypto portfolio, is that it will help in building a balanced portfolio.

5. Where can I buy DOGE?

In this section of our guide to DOGE, we are going to answer questions like ‘How to purchase Dogecoin?’, ‘Where can I buy DOGE?’ and ‘How can I trade DOGE’. We can buy and sell DOGE in the same way we trade other cryptocurrencies.

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Most leading crypto exchanges offer Dogecoin for trade. So, you need to first register on one of those exchanges offering DOGE. Once you register, fulfill KYC requirements, and add a payment method, you should be able to purchase DOGE. In addition to common payment methods (like bank transfer and third-party apps), many exchanges allow you to buy DOGE with credit cards.

If we consider factors like user-friendliness, low trading costs, and super trading platform, here are the best crypto exchanges for buying DOGE in 2024:

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6. What is a DOGE Coin and How Does it Work? – FAQs

6.1 🤯 Does Dogecoin have a purpose?

Even though Dogecoin started only as a memecoin, it has a range of real-life use cases. Now, Dogecoin intends to become a key player in the crypto space.

6.2 🔐 Is DOGE safe and secure?

Dogecoin is a decentralized cryptocurrency that offers the unparalleled safety and security of blockchains.

6.3 📈 What is a DOGE coin worth?

The current value of a DOGE coin is $0.085 (as of 22 Feb 2024). With a current market value of more than $12 billion (as of 22 Feb 2024), DOGE is presently the 10th most valued cryptocurrency.

6.4 ⚒️How to mine Dogecoin?

Dogecoin can be mined using crypto-mining tools and applications or by joining a crypto-mining pool. DOGE has the potential to explode in 2024. This post ‘What is a DOGE Coin and How Does it Work?’ explains the ins and outs of Dogecoin.

comment What is a DOGE Coin and How Does it Work?
Comments (2)
Shawty-bets
Shawty-bets 3 months ago
WHo let the Doge out
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