What Is DOGE?
Dogecoin (DOGE) is a peer-to-peer digital currency that was launched in December 2013. Dogecoin was founded in the early days of cryptocurrency, just after prominent players like Bitcoin and Litecoin. Dogecoin is a popular “meme” crypto that was created as a joke. For years, it was primarily used as a tipping mechanism until it had a resurgence in popularity from a mainstream audience in 2021.
The resurgence can be attributed to celebrity influencers such as Elon Musk, Mark Cuban and Snoop Dogg. Powered by Elon Musk’s “Dogefather” tweets along with adoption from the GameStop and TikTok communities, the coin’s price capped out at an astonishing $0.70 price tag, falling short of the $1 goal many were hoping to reach.
In 2021, it’s been difficult to overlook the meme coin’s emblem, a Shiba Inu dog. The Shiba Inu is frequently referenced in memes and tweets to entice cryptocurrency investors to buy Dogecoin and join the rising “Doge Army.”
Dogecoin uses the same technology as other cryptocurrencies, but Doge made a few enhancements to Bitcoin’s technology to provide consumers with faster and more inexpensive transactions.
As the fan-favorite cryptocurrency, Dogecoin’s original goal was to build a unique cryptocurrency project that would assist the public in comprehending the science underlying blockchains. Those who buy Dogecoin are thus really banking on the huge Doge community.
Jackson Palmer founded Dogecoin as a joke in December 2013. It was created in less than three hours by software programmer Billy Markus. After duplicating Bitcoin’s core code, Markus spent most of that time modifying the client to convert the text to Comic Sans font.
Markus will readily confess that Dogecoin was initially designed as a joke to bring some fun, friendliness and generosity to the cryptocurrency community. In 2015, he even sold his entire position to purchase a used Honda Civic.
Dogecoin was also created to increase public awareness of blockchain technology’s capabilities. The mascot, a Shiba Inu dog, is a parody of the popular internet “doge” meme from which it derives its name.
Though Dogecoin was created as a joke, it immediately gained traction due to its active and enthusiastic online community. Dogecoin has also been involved in several high-profile news events, most notably its successful $50,000 campaign to send the Jamaican Bobsled Team to the 2014 Winter Olympics after they qualified for the event but were unable to pay for the trip.
Doge is currently one of the most valuable cryptocurrencies in terms of market capitalization, having a market cap of more than $25 billion. This metric is often used to justify buying Dogecoin as market cap can be used, among many other data points, to determine the viability of a cryptocurrency.
As with Bitcoin and precious metals, Dogecoin’s value is determined by what someone else is prepared to pay for it. Dogecoin has managed to bring people from across the globe together in common aspirations of money, humor and connectedness throughout the Robinhood-GME-Twitter-pandemic era. Dogecoin’s value is set by its cultural worth, not its underlying technology.
The market capitalization, token supply multiplied by token price, is a considerably more reliable indicator of whether crypto is “cheap.” Remember that this, not per-token pricing, is the true indicator of a cryptocurrency’s value.
What Gives Dogecoin Value?
Dogecoin fans frequently use social media to call attention to some of the coin’s governing values, including charity, fundraising, mutual assistance, crypto advocacy and meme creation. A famous Dogecoin Reddit rallying cry, which also happens to be an acronym for DOGE, best captures the project’s main purpose: Do Only Good Everyday.
Therefore, Dogecoin has no true purpose other than to be a force for good in the world. It also wasn’t founded with the idea of benefitting any individual or business. Without an accurate method of valuing the currency in the conventional sense, the market determines its value in terms of U.S. dollars. In other words, Dogecoin’s value will fluctuate according to what someone else is prepared to pay for it at any given time.
While this is a component of almost any alternative investment traded on the secondary market, Dogecoin’s absence of intrinsic worth implies that market forces entirely determine its cost. This has been the case for many alternative investments as many believe the technology is still in its infancy.
What Drives Dogecoin’s Price Action?
Dogecoin once had a maximum of 100 billion DOGE that could be mined. That limit has since been removed, meaning that unlimited Doge can now be mined. Dogecoin holders often purchase Dogecoin to use it for online commerce and tipping internet creators like TikTok influencers. They may purchase, trade, sell and exchange Dogecoins for fiat currency or even physical objects.
Dogecoin boasts one of the largest communities of fans, dubbed “Shibes,” who primarily use the cryptocurrency to tip their favorite creative or to comment on a Reddit post. What drives the price swings of Dogecoin is primarily social buzz.
What Can I Do With DOGE?
Before using it, you first have to buy Dogecoin. Dogecoin is available on various crypto exchanges. Like any crypto, ensure that the site supports access to a digital wallet, enabling a user to transfer and receive Dogecoin. We have a more detailed guide on how to buy Dogecoin later in this article.
As far as what you can do with Doge, there are quite a few limitations. Since Dogecoin is seen more as a joke rather than a legitimate cryptocurrency, adoption of the coin has been fairly slow. That being said, there are a few ways that you can use Doge such as tipping online content creators, making online purchases with certain retailers and pay your friends. You can even trade Dogecoin on a few of the major cryptocurrency exchanges.
How Much to Invest?
Risk tolerance and current financial status should determine the investment amount. Invest less in Dogecoin if you’re behind on retirement savings and lack emergency money. Increase your Dogecoin holdings if you’re financially secure, on track to accomplish your retirement goals and have a sizable financial cushion in your bank account.
Although launched as a joke cryptocurrency, investors are now taking Dogecoin much more seriously, but it’s still considered a risky investment. Consider total financial condition, a diversified portfolio and risks involved to determine the amount to invest. Generally, experts advise against investing more than 3% to 10% of any wealth in crypto.
How to Buy Dogecoin
Here are the steps you need to take to buy Dogecoin:
Step 1: Set up an account with a cryptocurrency exchange that accepts Dogecoin (DOGE)
To register, provide basic information like your email address, password and complete name; some exchanges may ask for a phone number or location. When purchasing Doge, compare exchanges to select one with the lowest fees and the most up-to-date exchange rates.
Some exchanges require clients to undergo a Know Your Customer (KYC) procedure before purchasing cryptocurrencies. This procedure is frequently used by licensed and controlled exchanges under the financial industry regulatory authority.
Step 2: Fund your account
Numerous exchanges allow users to buy cryptocurrency using fiat currencies such as EUR, USD and AUD. Additionally, they’ll present various methods to deposit funds for a fiat account or deposit fiat currency including credit and debit cards, e-wallets and direct bank transfers.
Certain methods, such as credit card payments, will incur higher fees than others. Before financing a fiat account on your preferred exchange, conduct due diligence to ascertain the costs associated with each payment method and avoid incurring excessive charges.
Step 3: Invest in Dogecoin (DOGE)
Almost all crypto exchanges follow a similar procedure. Locate the navigation bar or search bar and enter “Doge” in the search field. Locate the part that allows you to purchase Dogecoin and input the cryptocurrency or fiat currency you intend to use. The exchange will then determine the Doge equivalent based on the current market rate.
Before finalizing a transaction, always double-check transaction information, such as the number of Doge purchased and the total cost. This is important whether you’re buying Dogecoin or any other crypto.
How to Sell Dogecoin
Once the Doge is received in an exchange wallet, determine how to generate a return on the investment. Two primary strategies are available:
Investors who feel Dogecoin’s price will continue to rise may hold it for months or even years at a time. Transfer the Doge immediately to a wallet to ensure its safety.
Short-term investors profit from modest price changes by purchasing and selling Doge at favorable times, a technique occasionally employed in margin trading. If investing short-term, it’s critical to have access to a reliable and fast-executing trading platform.
How Does Dogecoin Work?
For Dogecoin’s price to rise or remain stable, investors must regularly purchase additional coins. Otherwise, the supply of Doge increases rapidly, eroding the value of all existing coins as the currency inflates.
In sharp contrast to most other cryptocurrencies, one of Dogecoin’s developers explicitly removed the cap on the maximum amount of Dogecoin to dissuade long-term holders. The maximum number of coins typically promotes scarcity and helps preserve a coin’s value.
Is Dogecoin a Scam?
No, Dogecoin isn’t a scam. As a currency, Dogecoin’s value is determined by user acceptance and utility. Many investors believe Dogecoin is a bubble and avoid investing in a meme coin. While Dogecoin still has an opportunity to expand, there’s also plenty of room for the price to plummet.
Best Crypto Wallets for Dogecoin
Dogecoin is automatically stored in the crypto wallet of the brokerage once purchased. A cryptocurrency wallet provides users with a set of digital keys to keep the Doge safe, helping protect the investment portfolio in the event of theft.
Since they’re typically connected to the internet, some investors prefer to store their crypto in a third-party wallet instead of with the exchange or brokerage. For the highest level of crypto storage security, pick a wallet that allows users to handle private keys.
Two major types of cryptocurrency wallets, software and hardware, should be considered when deciding how to store cryptocurrency.
Software or Hot Wallets
Free, convenient and accessible, a “hot wallet” is a cryptocurrency wallet that remains connected to the internet at all times. A hot wallet can be a mobile application, a browser extension, downloadable software or anything in between.
Hot wallets are typically free to use and take only a few minutes to set up. Whether it’s a software wallet or an exchange-based wallet, they often come with clear and plain instructions and are quite simple to use.
A software wallet stores the private key on a device like a smartphone, desktop computer or laptop. Malware may infect these wallets, so use caution and download legitimate or highly recommended wallets only. Below are some notable software wallets:
MultiDoge – specifically designed for Doge and compatible with Windows, macOS and Linux.
Exodus – supports many currencies.
Coinomi – supports many currencies.
Dogecoin Wallet – specifically for Doge.
Dogecoin Mobile Wallet – available only on the Google Play Store.
Hardware or Cold Wallets
Cold wallets are cryptocurrency storage methods that don’t require a constant internet connection. While a hardware wallet is one of the most secure wallet types, it requires an initial investment.
Investing in hardware wallets is considered secure since the private key is saved offline on a physical device. The only time a user would connect a cold wallet to the web is to transfer money or purchase additional crypto.
Apart from the cost, the only other reason some choose an online Dogecoin wallet instead of a cold one is the steep learning curve associated with certain hardware devices. If Doge is an investor’s first crypto, it can be challenging to navigate the nuances of particular hardware wallets. Some notable hardware wallets are:
The Ledger Nano S and Nano X – support over 1,000 other crypto assets.
TREZOR One and TREZOR Model T
Cryptocurrency Exchanges or Broker
There are two primary methods for trading cryptocurrencies: through a broker or through a cryptocurrency exchange. However, the distinction between these two options may be imprecise even for blockchain professionals.
The primary distinction is in who trades are made with. With a broker, trades are made directly on the platform, fixing the cost or allowing for real-time speculation. On an exchange, the purchase and sale of goods are between other users – referred to as peer-to-peer transactions – and the price is determined by supply and demand. Brokers are more accessible for beginners than exchanges, though they are slightly more expensive.
Some investors use Crypto Exchange as it offers a broader selection of tradable cryptocurrencies.
BlockFi is an exchange and wallet service provider that serves both consumers and corporations. Accounts earn interest, loans are portfolio-backed and trading is commission-free. Like many of the finest cryptocurrency exchanges, accounts can be funded with USD and investors can buy or sell Bitcoin or stablecoins.
Binance was founded as a utility token to provide discounted trading fees. Its usage has evolved to include payments for transaction fees, travel bookings, entertainment, online services and financial services. In terms of daily crypto trading volume, Binance is currently the world’s largest exchange.
Kraken is ranked as one of the world’s most secure and reputable cryptocurrency exchanges, and it also has the lowest fees in the business. Security is taken very seriously, utilizing tried-and-true technology and stringent protocols to safeguard assets.
Beginners must determine if it’s preferable to own the virtual currency or trade futures, which provide a larger profit but higher risk. Certain brokers will only allow users to buy and sell Dogecoin in USD.
Robinhood is an excellent option to immediately purchase cryptocurrencies and buy Dogecoin. Users benefit from Robinhood’s massively popular commission-free trading. Robinhood’s sleek software makes trading incredibly simple but may disappoint those expecting the full trading experience.
eToro is one of the best brokerages to buy Dogecoin. It’s licensed by Cyprus Security and Exchange Commission, the Financial Conduct Authority and the Australian Securities and Investments Commission. This site is extremely well-developed with an exclusive cryptocurrency exchange.
Dogecoin is a well-established cryptocurrency that dates back to 2013. It has a dedicated community that enjoys donating and tipping other Reddit and Twitter users with Dogecoin. The community is among the most active in the crypto world. While this cryptocurrency has no distinct edge over other coins, the level of adoption it’s amassed over the years suggests it’s here to stay.
However, due to the odd nature of Doge’s crypto project, it does come with some cautionary tales. Dogecoin is favored by pump-and-dumpers who like manipulating the market, artificially inflating the price of a particular cryptocurrency and then deflating it by selling all of their coins.
Although purchasing Dogecoin entitles the purchaser to become a part of a worldwide movement, investors should still take precautions and heed wise investment advice. The best course of action is to establish a clear reason for buying Doge and then use the brokerage services of the top Dogecoin wallets available. Research alternative investments and be vigilant.
Cryptocurrencies are high-risk investments, and Dogecoin is especially volatile as a result of its unlimited supply.