What is Dogecoin?
Dogecoin is a cryptocurrency that is a token based on an internet dog meme, and it started as a joke in 2013. It is quite remarkable that the comedic nature of this currency hasn’t harmed its survival at all. There is a dedicated community of users with Dogecoin who can raise funds over the years for many initiatives.
The floodgates of digital currencies were opened with the arrival of Bitcoin in 2009. Since its launch, many alternative cryptocurrencies have emerged to accommodate a vast range of use cases. Dogecoin is among the earlier coins and has one of the unique offerings. Since 2014, Dogecoin has been able to captivate the cryptocurrency enthusiasts.
Founding and launch
Stemming from the fork of the Litecoin codebase, Dogecoin is known to be an open-source cryptocurrency. It is based on the Doge meme that took the internet by storm in the year 2013. The idea of a sort of joke cryptocurrency was initiated by Billy Marcus, a programmer from Oregon.
Billy reasoned that a more lighthearted coin could attract mainstream attention more than Bitcoin. After its launch, Dogecoin spread rapidly across social media, and within months, it was able to hit a multi-million dollar market capitalization.
How does Dogecoin work?
Dogecoin is based on the fork of Litecoin known as Luckycoin, but some notable changes are made to the protocol.
Dogecoin is quite similar to Bitcoin, as it uses a Blockchain, and the blocks appear through proof-of-work. The network participants install open-source software into the machines to act as full nodes. For people who not familiar with blockchain technology, this means that each of the participants has a full copy of the database. The administrator controls the system, so it is decentralized, and the users can rely on cryptographic techniques by sending information directly to each other.
- Mining and supply
A mining process is used to create the new coins, and the participants are required to prove to the network that they have done work on revealing an answer to a complicated puzzle. Hashing information solves the puzzle until the user can offer an output that the network accepts. There is a 1 minute block time targeted by Dogecoin mining, and this yields a block reward of 10,000 Doge.
How to acquire Dogecoin?
There are several ways of acquiring Dogecoin, just like the other cryptocurrencies. You have the option to mine it yourself or accept it as a payment for any goods and services. However, purchasing through cryptocurrency exchange is the most straightforward process. Usually, it would help if you bought Bitcoin or some other popular coin and then trade it for Doge.
After getting the Dogecoin, you can use it as a cryptocurrency, hold it on a hardware wallet, exchange it for goods, trade it against other coins, or even tip others with it. You also get the option to purchase gift cards and vouchers for a range of retailers.
Despite being revolved around the internet meme, Dogecoin has successfully developed a dedicated community of users. After six years, it can maintain a market cap of hundreds of millions of dollars. It is still not very clear whether Dogecoin is valued as a novelty currency, a viable financial asset, or something in between in the market. Still, a very few cryptocurrencies have impacted this currency, if not for the status of being a meme coin.