What is Dogecoin?

Dogecoin is a cryptocurrency that features the likeness of a popular online meme, “Doge”, a Shiba inu, as its logo. It got its start as a joke currency as a response to the popularity of the rapidly growing Bitcoin and the many other cryptocurrencies that followed soon after. Dogecoins shorthand symbol is Ð or just a plain D. It was started on December 8th of 2013 and quickly became popular and becoming a legitimate cryptocurrency shortly after. By January 2015, it had already reached a market worth of $60 million USD.

Dogecoin was created by a Portland-based programmer named Billy Markus. Markus’s goal was to make a fun alternative currency that would have more appeal and come off as less complicated than Bitcoin. Another goal of his was to give it a cleaner reputation; bitcoins were and still are the currency of choice for black market online drug markets. At Dogecoin’s founding, the most famous of these markets was The Silk Road. The Silk Road is no more, but several underground markets have taken its place since then and continued to use Bitcoins as currency. Dogecoin has managed to stay away from these seedy practices.

How Does Dogecoin Work?

As with Bitcoin and many other cryptocurrencies, Dogecoin operates by using public-key cryptography, meaning a user creates a pair of cryptographic keys: one that functions as public and one that is private. Public keys work by allowing the user to receive money without having to worry about others using the key as well to spend as well. Private keys, however, are to be kept secure by the user because anyone with this key would be able to pay or steal the owners Dogecoins. These keys differ from Bitcoin; they all begin with the letter D and follow with 34 numbers and letters.

Like Bitcoin and Litecoin, Dogecoin has a block schedule. There is one critical difference in Dogecoins block schedule from Bitcoin and other currencies, and that is that there is no finite number of Dogecoins available. In its early days there was a limit of coins to be had during each number of the block-chain, but when the chain finally got to 600,000, the amount became infinite.

Due to the fact the currency is uncapped, its value continues to go down slowly over time. It is only logical that if there were a billion of something and the next year another billion were made as well that the value would go down. Dogecoin and its users are fine with that. Even though it is a legitimate currency, it still has a novelty feel to its users. It’s meant to have a lighter feel than Bitcoin.

How To Use Dogecoin

Using Dogecoin is a very simple process. By going to their website, users can download a Dogecoin wallet to the platform of their choice. As of now, there are portfolio options for desktops, mobile devices, online browsers, or on paper. They are available for PC, Mac, and Linux users. A paper wallet is a physical documentation of coins owned. It is the most secure of all options as it is impervious to hackers. However, it is the slowest of choices. Also, if something was to happen to a users paper wallet, there is no way to replicated the information. To oversimplify things a Dogecoin is a number that is part of a chain, and a wallet is what holds them. They are not real coins.

Once a user has made their wallet(s), they can proceed to buy Dogecoins. There are many different ways one can buy Dogecoins and just as many different vendors. The easiest way to get Dogecoins is to use an exchange. There are a seemingly endless amount of traders out there, and it is important to be wary of scams. By going to Dogecoin.com, a potential investor can find several trusted vendors to choose from without having to worry about being scammed.

There are alternative methods to collecting Dogecoins as well. As with other cryptocurrencies, Dogecoin is minable. Mining is a complicated process and requires serious technological hardware and knowledge. Mining can also be an expensive route even if one has a powerful computer because it takes an exorbitant amount of power to run a mining operation which can seriously increase one’s energy bill. A person with the understanding and resources to mine would not be reading this article; they would already know how to do it and everything about Dogecoin.

Luckily, there is another way of earning Dogecoin that does not require any investment at all, this being in the form of “Dogecoin Faucets.” These faucets exist for many different online crypto-coins and are a good start for those looking to get started but do not wish to spend any money. Unlike bitcoin faucets that only issue minuscule fractions of Bitcoins called Satoshi, Dogecoin faucets give users numerous coins at a time. They can do this because Dogecoin has a much lower value than Bitcoin. As of September 1st, 2016, the average value of a Dogecoin is $0.00000039. Faucets only take a few seconds to use at a time, and that is why they pay so low.

When it comes to spending Dogecoins, the way to do so varies. One option is to use exchanges that sell them and collect that way. Due to its low value, most users spend Dogecoins on social media forums like Reddit. Prices are worked out in a peer to peer fashion, with one party sending their Dogecoins to the other in exchange for a good or service.

That’s part of the appeal to Dogecoin. It isn’t meant to replace traditional currency and does not take itself so seriously like other currencies. Dogecoin has a long established community of users that is known for its friendliness and openness, making it an ideal cryptocurrency for those just starting out.

Written by: Andrew Johnson

Andrew Johnson has been reporting for Blog.ca for more than 8 years. He studied journalism at UGC and has published two books on how journalism influences the world.

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