A lot of cryptocurrencies have been created since Bitcoin was launched. And just like everything else, Bitcoin had its fair share of criticisms too. One of them was Dogecoin, which also took to the cryptocurrency space its mockery of Bitcoin for its wild price swings back then. But today, it has gained massive notoriety for its unusual pump and dump movement.
Having attracted the attention of one of the world’s biggest business magnates is one of Dogecoin’s feats. Nobody would have thought that the interest around the coin would grow this much. As of this writing, the increasingly popular crypto has a market cap of over $8.6 billion. But what is Dogecoin really?
Billy Markus and Jackson Palmer created Dogecoin (DOGE) back in December 2013. It was made for satirical purposes targeted at criticizing and mocking the unusual movement of cryptocurrencies at that time. There were also many other valueless digital assets, or ‘memecoins,’ that were launched during the same period Dogecoin was launched.
The creators chose the iconic Shiba Inu from the popular Doge meme as the poster of the coin. The coin also became popular as its community grew. It definitely enjoyed the virality of the meme that was used to symbolize it.
Another purpose that the creators of DOGE had in mind was the need to come up with a more accessible alternative to Bitcoin, which is still the most popular crypto until today. According to them, there had to be a more fun option in the crypto space. Thus, the memecoin.
There are billions of DOGE in supply and they can be bought at a low price. At first, people used it before to tip Reddit users and YouTube content creators. Other notable news where DOGE was used was when $50,000 worth of the crypto was donated to the Jamaican Bobsled Team to help them join the Olympics back in 2014.
What is Dogecoin?
Dogecoin is a cryptocurrency that can be used as a medium of exchange or as a store of value. It was forked from Luckycoin, which is also a fork of Litecoin. It has an unlimited supply and can be mined. However, because it uses the Scrypt algorithm, like Litecoin, DOGE cannot be mined with Bitcoin ASICs that follow SHA-256 encryption.
Unlike Bitcoin and Ethereum, transactions made in DOGE are cheaper and faster because they do not suffer from huge network traffic that other blockchains experience. Sometimes, cryptocurrency traders opt to use DOGE whenever withdrawing their funds for this particular reason.
Other cryptocurrency holders just purchase DOGE for speculative trading. Like any other token, it appreciates in value and traders can profit from that. Otherwise, holders can choose to use it as a store of value since it is not as unstable as other tokens anyway.
What is happening with DOGE today?
Recently, DOGE was made popular again after a long time. Some of the factors that could have contributed to it are news that it was being pumped by the popular subreddit ‘WallStreetBets’ and Tesla CEO Elon Musk’s tweets in support of it.
Other popular icons who tweeted for DOGE are the rapper Snoop Dogg and Gene Simmons of Kiss. Their tweets and promotions on social media became the perfect storm that lifted DOGE upwards. It even got DOGE to the top 10 cryptocurrencies with the biggest market cap during one of its many pumps.
In a popular interview, Musk had this to say about DOGE:
Musk even made a tweet saying that “Dogecoin is the people’s crypto.” There are many who believe that it was that particular tweet from Musk which caused a little over 50% jump in its value.
But even when it was first launched, DOGE already exhibited a pump. Back in its release, it showed a 300% increase in value, from $0.00026 to $0.00095, within just three days.
For anyone who wants to get in on the DOGE hype, it can be purchased in online exchanges that support DOGE/BTC or DOGE/LTC trading pairs like Binance. However, exercise caution in doing so and always plan your trades carefully.
DOGE can be mined to earn token rewards. The role of miners in DOGE is the same as in other blockchains—they confirm transactions before they are stored in the blockchain. The block time in Dogecoin is 1 minute. Every time a new block is added onto the chain, a number of users receive DOGE rewards.
There are two ways that users can mine DOGE. They can either mine on their own or join a mining pool.
Joining a mining pool is an easy option to get started. You can join pools for a fee and earn a portion of the rewards if in case the pool mines a block.
Earning rewards from mining DOGE on your own can be a bit difficult, however. This is because the miners with the highest chance to earn rewards are only those who have strong computing power. But if you get lucky and mine a block, you earn the allocated rewards all to yourself.
To start mining, there are some basic things you have to prepare. They are:
- Hardware – Any PC with Windows, OS X or Linux can do.
- Internet connection
- Cryptocurrency wallet
Any PC can work well enough to mine DOGE. However, it is not advisable as it can still consume a lot of energy and cause overheating. You can add a graphics card to your rig to improve your device’s mining power.
You can also get a specifically-designed mining rig to mine DOGE. You can look for a Scrypt ASIC Miner to start off. These rigs can also be used to mine Scrypt-based tokens like Litecoin (LTC). Some popular examples you could look at are Bitmain Antminer L3 and BW L21 Scrypt Miner.
After you set-up your hardware, you should also prepare your software. There are specific softwares for CPU, GPU, and Scrypt ASIC mining. Be sure to check out the compatible softwares for your hardware.
In the cryptocurrency space, a lot of events are unpredictable. No one would have expected Dogecoin to continue its existence up to this point, let alone earn a lot from it. But if there’s any take-away from the pump and dump schemes that happened with DOGE, it is the fact that the value of a token can rest solely on how the community sees it. This is exactly how fiat currencies are valued anyway.
Dogecoin is just like any other cryptocurrency with a simple use case. It can be used as a medium of exchange and a store of value. There have been no additional use cases for it ever since. And while it has already generated a lot of profit for some of its holders, it is always important to be reminded that it does not secure an assured income every single time.
Looking at fundamentals is still a more reliable gauge of a token than its price changes. There is some good news on Dogecoin, fortunately. Some reports say that the team behind it is working on resuming the developments on the token that have been stalled for a long time already. The renewed interest in the coin could perhaps spur a few more innovations that could rally people behind the coin even more in the future. And maybe then, Dogecoin can actually live up to its insane valuation.