Crypto is complicated. From hashing and consensus mechanisms to price movements and tokenomics, there is a whole world of information to sift through for new users. This can undoubtedly be very overwhelming, leaving crypto to a small and engaged audience it already has. This is where Dogecoin comes in. It is a lighthearted “memecoin” that makes it easier for new users to engage with crypto without knowing everything about it.
What is The Dogecoin?
Launched in 2013, Dogecoin is the most popular memecoin. Jackson Palmer and Billy Markus created it as a lighthearted spoof of Bitcoin, which had begun its rise.
For most of its history, its price and popularity remained low, with only a few users knowing about it. All that changed in 2017, when its value skyrocketed along with the rest of the crypto market. But its peak popularity came in 2021, with Elon Musk repeatedly tweeting to support the token.
At its peak, Dogecoin hit $0.737 and had a market capitalisation of over $50 billion. While its value has fallen sharply to $0.07616 at the time of writing, it still has a large and involved fanbase that regularly uses the token as a tipping system on Reddit.
How Does Dogecoin Work?
Dogecoin operates on its own blockchain. Its code is based on Luckycoin, which is itself a fork of Litecoin. It shares many features with Bitcoin and Dogecoin since its basis is so similar to these other projects. Like Bitcoin and Litecoin, Dogecoin is a scrypt-based crypto. It is thus protected against brute force attacks trying to duplicate the coin or attack the network.
On any blockchain, it is crucial to ensure that transactions are genuine and that no false information is added to the final ledger. To do this, Dogecoin uses proof of work. PoW is a process by which “miners” use their computing power to solve complex cryptographic puzzles. The first one to solve the puzzle can then add a new block – a group of transactions – to the blockchain.
Dogecoin is not very effective at storing its value. Each minute, miners can earn 10,000 DOGE as block rewards. There is also no cap on the maximum number of tokens. This means the coin has high inflation and will lose its value over time.
While Dogecoin may not be the best for storing your money, its abundance is a key characteristic that makes it widely available. This helps a lot more people get their hands on DOGE.
What is Dogecoin Used For?
Since Dogecoin is primarily a memecoin, it was not built with any specific use case in mind. However, the benefits of Dogecoin include a passionate community, which has created several uses of its own, prompting even major companies to accept payments in DOGE.
Dogecoin is more efficient than Bitcoin for the purpose of completing transactions. In Bitcoin, it takes over 10 minutes to finalise and add blocks to the blockchain. On the other hand, this is cut down to just 1 minute with Dogecoin.
Companies like Newegg, AMC and Gamestop accept payments in DOGE, which grants it legitimacy in a sea of crypto tokens.
DOGE is also used to simplify tipping content creators on the internet. On Twitch, you can tip streamers in a variety of cryptos, including Dogecoin. This extends to Reddit, where you can tip users whose posts and comments you like with DOGE.
Dogecoin Pros and Cons
- Community – Dogecoin has a large and engaged community, committed to the token’s success. If you use DOGE, you know there are thousands of other individuals with the same passion for the project.
- Unique Appeal – Unlike Bitcoin and Ethereum, each with its own function, Dogecoin has an appeal like no other crypto token. It can thus attract a larger following based on its meme status.
- Inflationary – DOGE is constantly losing its value per token over time, but gaining in the number of tokens. This presents a problem when looking to use it for transactions or storing money, but can be an advantage if you wish for more users to have access to it.
- Novelty – Dogecoin is a novel idea, but it is unclear if the project can sustain this popularity in the long run.
Read more: 10 Best Crypto Under $1 To Buy in 2023
Future of Dogecoin
Unfortunately, the future of Dogecoin is highly uncertain. First, 2022 has brought global economic instability and the threat of war. Added to this is high profile scandals and bankruptcies in the crypto world like 3AC and FTX. This has greatly reduced public and investor confidence in the short run. Dogecoin has also been affected by these developments.
Second, Dogecoin’s popularity stems from its meme status. It is unclear if this can sustain it into the future or if user attention will wane and move to some other project like SHIB. To cement its place in the future, Dogecoin’s ecosystem and its community must come together to create more tangible value for the token.
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FAQs on What is Dogecoin (DOGE)
What is the current value of Dogecoin?
As on December 26th,2022, Dogecoin’s price is $ 0.07616. It has a market capitalisation of $ 10 billion and a circulating supply of 132,670,764,300.
What are the use cases of Dogecoin?
Dogecoin is a “memcoin”. It does not have any inherent value but has risen to popularity due to its meme factor and backing from notable entrepreneurs.
Which consensus mechanism is used for the Dogecoin blockchain?
Similar to Bitcon, Dogecoin’s blockchain uses a Proof of Work(POW) consensus mechanism.