- 1 What is Dogecoin (DOGE)?
- 2 How Does Dogecoin Work?
- 3 Real World Applications for Dogecoin (DOGE)
- 4 What is the Difference Between Dogecoin and Bitcoin?
- 5 How Can You Get Dogecoin (DOGE)?
- 6 Dogecoin Wallets
- 7 Dogecoin FAQ
What is Dogecoin (DOGE)?Dogecoin (DOGE) is one of the most interesting cryptocurrencies in the industry, and one which every crypto user should own (at least a tiny bit). Dogecoin is digital cash, just like Bitcoin (BTC), but the community that has developed around it has given this coin a life of its own. We’re not saying that buying at this Dogecoin price will make you rich (but it’s happened before with DOGE), but bringing it into your digital wallet will give you a kind ofjoy that no other crypto can provide.
The Dogecoin price has fallen as low as less than one penny (that’s $0.002 per coin as of January 8, 2019). At its all-time-high early in 2018, the Dogecoin price was more than $0.02 per coin! That might not sound like much, but Dogecoin value returning to former heights would represent 1,000%+ returns, something nearly unheard of in modern investing!
Recommended places to trade Dogecoin
How Does Dogecoin Work?
Dogecoin works like many other cryptocurrencies. Power users called “miners” use computer power to check that DOGE transactions are authentic, and to secure the network against hackers and the like. Normal users buy, sell, and trade Dogecoin for all kinds of purposes. You can buy a dog bed at Overstock.com with Dogecoin. You can tip excellent content creators with DOGE on Reddit and Steam. The possibilities are endless.
Dogecoin was created as a fork of Litecoin. This means that the Litecoin software was copied, then adapted to function slightly differently for Dogecoin’s unique purposes. Litecoin itself is a hard fork of Bitcoin, so in reality, Dogecoin is in the direct lineage of Bitcoin itself.
What is the Difference Between Dogecoin and Bitcoin?
The differences between Dogecoin and Bitcoin are mostly technical (ignoring the huge cultural differences of the two cryptocurrencies). Dogecoin adds billions of coins to its supply each year, with no cap to come. Bitcoin adds coins through mining, as well, but has a cap of 21 million which will kick in in the mid-2100s. Both cryptocurrencies use basic cryptographic hash techniques that made the first way of cryptocurrencies possible. This means that Dogecoin price GBP will always be lower than Bitcoin, coin per coin, but this says nothing of their relative investment potential.
Similar technologically, the way DOGE and BTC are used makes the bigger difference. There are simply fewer people using Dogecoin at any time than are using Bitcoin. Bitcoin is trying to be the most popular cryptocurrency in the world. This leads to high international traffic, which makes Bitcoin (often) more expensive and slow than DOGE.
If the tables were turned, and Dogecoin was magically the world’s #1 cryptocurrency, DOGE wouldn’t be able to handle all of that traffic. In fact, Dogecoin hasn’t had any significant technical update in several years! From a technical standpoint, DOGE is a dead project. But from a user standpoint, it’s as active as ever (though admittedly a little depressed with crypto prices suffering as they are in late 2018/early 2019).
Dogecoin and Bitcoin also differ in the value and number of coins in each system. There will only ever be 21 Million Bitcoins. Supply and demand dictates that, if Bitcoin is desirable, then each of these units will have high value. Dogecoin has a supply of over 117 billion, and billions of new DOGE will be added to the circulating supply each year. This “inflationary model” may mean that DOGE doesn’t have the same kind of investment potential as Bitcoin, but committed users could drive up its price all the same.
Dogecoin is a digital currency. Pieces of data, your Dogecoin must be stored somewhere. There are many wallets that support Dogecoin, such as the Dogecoin.info online wallet and the Ledger Nano S multicurrency hardware wallet.
Whichever wallet you choose, make sure to make a careful record of this wallet’s “private key”. This is the secret code associated with your account. If you were to lose access to your wallet, you could use this private key to get your coins back. However, if someone else got access to this key, they could steal your coins.
Choose a convenient, low-security web or mobile wallet for Dogecoin you plan to use in the day to day. Choose a highly-secure crypto wallet that’s not connected to the internet (like the Ledger Nano S) for Dogecoin you’re holding long term as an investment.
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(*Information in this article should not be taken as investment advice.)
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