The Beginner’s Guide to Dogecoin
Dogecoin is popularly known by its mascot: Shiba Inu, known in most social communities across the internet. It was developed based on an already existing coin, called Luckycoin but had some slight modifications along the line to fulfill its purpose. Dogecoin also uses Scrypt Technology in its proof of work protocol, making it a derivative of Litecoin.
There were many perceptions surrounding cryptocurrencies, and one of them was that it was meant purposely for the elite who are technically inclined to use them. Dogecoin was launched on December 8, 2013. However, its developers Billy Markus and Jackson Palmer had a different perception. They wanted to create something that everybody could use on the internet for fun, not knowing this idea would turn into something else along the line.
Dogecoin in a Nutshell
- It Is a decentralized cryptocurrency developed purposely to reward content creators for creativity.
- People also use it as a tip to build its community and engage its members in community activities.
- It used Scrypt Technology in its Proof of Work protocol, making it a derivative of Litecoin and had some features similar to Luckycoin.
- Billy Markus and Palmer Jackson pioneered its development.
- It has an infinite supply.
What is Dogecoin
Dogecoin is one of the most popular cryptocurrencies used in tipping community members across various social platforms on the internet. It operates quite similar to Bitcoin, Litecoin, and other major coins in the industry, as a peer-to-peer decentralized digital currency to enhance the security, speed, and scalability of transactions. A slight modification in its coin supply and its mode of circulation was different from its parent coin.
Dogecoin has no limited supply, and also the release of new coins as a result of mining takes a minute, unlike the two minutes required for Litecoin. While many cryptocurrencies were mimicking Bitcoin in terms of development, Dogecoin became a derivative of Litecoin as it uses Scrypt Technology in its Proof of Work consensus protocol. Dogecoin began as a joke and a fun cryptocurrency where users on Reddit, Twitter, Imgur could get tipped by coming out with amazing content. Several people got to know about it and started tweeting about it with several memes along the line. This got the attention of the crypto space, and during the bull run of bitcoin, it also rallied along and has occupied a slot among the top 100 coins in this industry.
A Brief History of Dogecoin
It all started as a game on the internet when Billy Markus, a programmer, wanted to develop a cryptocurrency that could be used by the masses instead of having a limited amount of coins like Bitcoin, Litecoin which was only accessible to the very few in the world. The process involved in getting cryptocurrencies from either exchange or over the counter platforms can put any crypto starter off this idea. Palmer took advantage of social media platforms’ worldwide use and decided to create a coin that could tip users for making quality content.
Inspired by this intention, a student from Front Range Community College reached out to Jackson Palmer, a marketer with Adobe Systems in Sydney, checking if he could help turn this brilliant idea into a reality. Several people joined in the request until Palmer decided to give it a look. He was impressed with the idea and decided to purchase dogecoin.com.
Billy reached out to Palmer in an Internet Relay chat room and, after a few discussions, decided to build the most popular cryptocurrency tip on social media. Dogecoin’s release due to mining was developed quite similar to Luckycoin, an already existing cryptocurrency at that time. The block rewards for mining on the Dogecoin’s network were randomized and a total coin supply of 100 billion, but this was changed later on, as rewards were fixed and Doge has an infinite supply.
Getting towards the end of 2013, Dogecoin, together with many altcoins, rose high in price across the crypto markets. DOGE rose over 300%, leaving many holders happy with their profits, but this was a flash in the pan as the price plunged again by 80% price reduction. The fear, doubts, and uncertainties spread by governments about major cryptocurrencies also descended on DOGE, as it was making waves across social media outlets.
The Reserve Bank of India resounded the huge risks involved in using dogecoin and other cryptocurrencies, taking into account some of the crypto sphere’s historical hacks. Unfortunately, the Bank of India played the role of a seer this time around, as there was a major hack just the day after they announced an online dogecoin wallet, which led to the loss of about $12,000 US dollars. The strong and ever-growing Dogecoin Community made several contributions to refund users who lost their funds. Dogecoin, led by its team, has engaged in several donations across the world. Unfortunately, Jackson Palmer made a public declaration of taking an indefinite leave from cryptocurrency and its activities.
This, in a way, affected the solidarity among some community members, as some decided to leave. Whatever the situation, some members are still loyal to Dogecoin’s course and have the cryptocurrency still trending.
How Dogecoin Mining works
Like any other PoW blockchain network, the mining of DOGE is when miners secure the network and add new transactions across the existing blockchain. The DOGE blockchain is proof of the work network, but it uses Scrypt Technology instead of SHA 256 as in Bitcoin. Miners across the network do a non-stop job of verifying transactions that are broadcast onto the network. Once more than half of the nodes online agree with any transaction void of any double-spent, it is added unto the network. Miners get incentivized with 10000 $DOGE for every block they mine, which is approximately every minute. Below is an image showing the Dogecoin Blockchain and Block schedule:
After mining, block rewards were random until March 12, 2014, where an update to the Dogecoin wallet client was released. This update also came along with a security feature that made Dogecoin unique. DigiShield, as its name was supposedly designed to secure the Dogecoin network. It introduced a difficulty algorithm that made it non-profitable for miners to join as pools and mine dogecoins. This security feature provides extra security against the chances of a 51% attack on the network, as witnessed in Bitcoin’s early days.
How to buy Dogecoin
Cryptocurrency exchanges are the number one spot to purchase Dogecoins for any crypto enthusiasts, while crypto starters can resort to the use of over-the-counter platforms, such as Coinbase (currently not supported by them). Others can also use Atomic Swap Technology embedded in some cryptocurrency wallets and brilliantly purchase these coins.
I would never advise buying any cryptocurrency from escrow groups, even though they are very reputable ones in this industry. The very best and minimal risk is buying from cryptocurrency exchanges, and this link should take you to the various exchanges where you can purchase dogecoin.
Where to store Dogecoin
How much is Dogecoin worth
Dogecoin began with an initial price of about $0.000570. News about it spread like wildfire till it attained its all-time highest price of $0.018773 on Jan 07, 2018, but had already recorded an all-time low price of $0.000085 on May 07, 2015. There is about 124 billion DOGE in circulation, and this supply is never going to be capped. At the time of writing, one DOGE was worth $0.0.00200.
The Benefits of using Dogecoin
Using this cryptocurrency to make payments is way faster than some of the popular cryptocurrencies and more user-friendly than them. For those interested in building and establishing a community, using dogecoins as a tip to enhance community participation is one of the ways to go.
Dogecoins have made several huge donations, such as building wells in Tana Valley in Kenya from a 35 000 donation.
I am not too optimistic about this project, neither am I calling for its downfall at any point in time – but the development of this project after its launch has been staggering for half a decade. There have not been any major updates nor partnership aimed to bring other use cases, aside from being used to engage community members on social platforms.