What is Dogecoin: Understanding The Crypto-Star
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On Tuesday, 20th April 2020, Dogecoin surged its value to 1 dollar, making this day named after it as “Doge Day.” An obsession for Dogecoin is developing in the crypto world, which was started as a joke, but now has become the crypto-star of the future. Every person, in some way or the other, is talking about Dogecoin. People who know about it are eager to follow its updates and people who don’t are curious to know exactly what Dogecoin is. Public figures like Elon Musk and Snoop Dogg and companies like Snickers rooted a sudden interest in the people involved in Dogecoin mining.
In this tutorial, you will look into the nitty-gritty of Dogecoin and by the end of this tutorial, you will have the answer to ‘What is Dogecoin?’.
What Is Dogecoin?
Dogecoin is a peer-to-peer, open-source cryptocurrency much like an altcoin of Bitcoin, that provides its users a completely unknown, decentralized, and secure environment that is free from any third-party interference when it comes to transactions.
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How Was Dogecoin Started?
Two software engineers, IBM engineer Billy Marcus and Adobe engineer Jackson Palmer, created Dogecoin on 6th December 2013. It was started as a “joke” for leading cryptocurrencies like Bitcoin, inspired by the popular Doge meme with a picture of Shiba Inu. But it became an instant hit after that, and today, Dogecoin’s value is around 45 billion dollars in the crypto market.
Jackson Palmer and Billy Marcus
Rise of Dogecoin
In 2013, Dogecoin became very popular among the community of people who just wanted to play around with cryptocurrencies freely. Later, internet forums like Reddit and Dogecoin started rewarding Dogecoin to their content creators, making Dogecoin surge the trading value of other cryptocurrencies, especially bitcoin, in 2014.
After that, the founder of SpaceX, Elon Musk, the most prominent follower of Dogecoin, frequently started tweeting about a faux “Doge” magazine cover which led to the rise of the price of this meme cryptocurrency. Following that, other celebs like Snoop Dogg and Gene Simmons also started tweeting about and promoting Dogecoin over social media.
In April 2020, Elon Musk tweeted, “Doge barking at the moon,” which led Dogecoin’s value to rise over 600%.
As a result of these actions, today, the current worth of Dogecoin is $41 Billion.
How Does Dogecoin Work?
Dogecoin is a cryptocurrency that, like other cryptocurrencies such as Bitcoin and Ethereum, runs on Blockchain technology. Blockchain is a distributed and secure digital ledger that stores all transactions made by any cryptocurrency, free from a centralized authority.
Blockchain Technology
- All the users of the Dogecoin network have a digital wallet that consists of two keys – a public key and a private key.
- One can request a transaction with another person by knowing their wallet ID and public key.
- Once the request for a transaction is made, the application alerts all the Dogecoin miners worldwide to proceed further with the process.
- The Dogecoin miners validate whether the sender has enough Dogecoins to make the payment or not. And after the validation process, they approve the transaction request.
- Meanwhile, Dogecoin miners worldwide compete to collect all the pending transaction data known as the nonce.
- The miners then apply a mathematical function to produce the correct hash number for that particular nonce of the pending transaction.
- They reward the miner who successfully produces the correct hash number, with 25 Dogecoins in his account.
- After that, both the users get a confirmation message that it has approved their request for the transaction.
- And within a few minutes, the requested amount of Dogecoin is credited into the receiver’s wallet, and thus, the transaction is completed.
Pros and Cons of Dogecoin
Some of the Pros and Cons of the Dogecoin network are :
Pros –
- Faster confirmation time for completed transactions
- The transaction fee for Dogecoin is meager
- The Dogecoin network has a devoted and friendly community of creators and followers
- Dogecoin’s comparatively lower value helps many social platforms to pay their content creators and can also be used as a gaming currency
- It is widely accepted
Cons –
- The mining of Dogecoin is non-profitable because its value is relatively low, and it deals with a large number of coins
- Dogecoin is an inflationary currency that limits the potential of Dogecoin as a means of investment
- It has limited functionality like no Smart Contracts
- Dogecoin buying options are minimal. For instance, Coinbase doesn’t support Doge
- It is considered less secure compared to other top cryptocurrencies
Uses Of Dogecoin
Today, many companies and firms like restaurants, grocers, web hosting, product retailers, E- booksellers, and travel services use Dogecoin for transactions.
These are a few examples of companies in every sector that use Dogecoin.
For example, BC.GAME , Stake.com , WOLF.BET , Betfury are among few top companies that use Dogecoin.
