Dogecoin: Complete Coin Guide

/Dogecoin: Complete Coin Guide

Dogecoin: Complete Coin Guide 2018-02-21T17:50:48+00:00

Dogecoin; Where Jokers Made Fortunes

Have you ever thought of an idea as a joke only to turn into a fortune-building reality? Well, Dogecoin is one of the greatest jokes that has ever happened to the cryptocurrency world. The whole idea behind Dogecoin was not to create a cryptocurrency in the first place.

Dogecoin was feebly aimed at making digital currency fun and less serious, with the vision of reaching out to the population not willing to take up the idea of Bitcoins which had been mentioned as a medium of exchange that facilitated illegal transactions.

Cryptocurrencies such as Bitcoins and altcoins (those launched after Bitcoins) are digital forms of monies not issued by any central authorities. The decentralized nature of digital currencies makes them immune to government interference.

What is Dogecoin?

The origins of Dogecoin

  • Are you familiar with the doge meme? ‘Doge’ is a slang name for ‘dog’. The Doge slang is primarily associated with pictures of Shiba Inu, nicknamed Shibe.
  • Well, Dogecoin is an altcoin (alternative cryptocurrency) that uses the doge meme as its campaign tool.
  • On 27th November 2013, Jackson Palmer (a marketing professional in Sidney), jokingly posted a tweet indicating that he would be investing in Dogecoin. “Investing in Dogecoin, pretty sure it’s the next big thing. “ Quoted the tweet.
  • Palmer got some replies on his tweet encouraging him to implement the idea. This fueled him to go ahead and buy a domain- dogecoin.com
  • Meanwhile, Billy Markus, in Poland, was trying to come up with his own digital currency that he perceived would catch the attention of a large population than what was then driving Bitcoin’s popularity.
  • Just when he felt that his idea and development efforts were not bearing any fruits, he stumbled upon dogecoin.com, barely a week after the site had gone live. The first idea that ran through his mind was, “This is funny, I should just make it a coin.”
  • Markus reached out to Palmer, and nearly a week after the latter’s joker tweet, a partnership was formed and Dogecoin was launched.
  • Immediately after the launch, Dogecoin took wind of the Reddit community and exploded into an altcoin that no one had ever predicted.

What is the technology behind Dogecoin? How does Dogecoin work?

  • If you are familiar with Bitcoins, you will definitely need very little efforts in grasping how Dogecoin works.
  • This doesn’t necessarily mean that you require a background knowledge of Bitcoin so as to fast grasp what Dogecoin is all about. I believe you are genius.
  • Just like any other digital currency, Dogecoin exists online.
  • The ‘joker’s’ currency operates on a platform known as a blockchain (similar to Bitcoins but distinct in various ways).
  • Blockchains decentralize traditional records and ledgers, which makes them completely independent from any central repository such as the government.
  • These ledgers are visible to everyone across the network, bringing about the unparalleled level of trust and security in transactions.
  • Every user has the liberty to check whether the information in the ledger is correct, and that’s what creates trust and a sense of security among users.
  • The world is full of corruption which revolves lack in trust, hence, a greater need for blockchain technology.
  • When Dogecoins are exchanged between parties (traded) for Bitcoins and many other altcoins, as well as fiat currencies such as Dollars, all these transactions are kept in a public ledger, meaning that anyone can view them.
  • Despite everyone having the ability to view all the transactions taking place on Dogecoin’s Blockchain, the names of the personalities around the transactions are kept secret from the public.
  • If you are, therefore, viewing and verifying transactions on Dogecoin’s public ledger, you can verify the amount exchanged but not know the parties responsible for the transactions on both ends.

Pros and cons of the Dogecoin Blockchain

Pros

  • Dogecoins are fast, easy, fun, and friendly to use.
  • Dogecoins offer faster transactional speeds compared to other digital currencies.
  • The platform offers low transactional fees.
  • So many charitable works have been realized from Dogecoin’s network

Cons

  • Mining Dogecoins isn’t profitable.
  • Dogecoin is quickly losing It has been years since the blockchain was last updated.

Lessons we can learn from Dogecoin

Dogecoin speaks of what cryptocurrencies users would want to experience as they invest and exchange their various cryptocurrencies. Users want something fun, a digital currency that is easy and friendly to use.

Additionally, Dogecoin is an indication that the cryptocurrency world is so dynamic as a result of the need for change that we humans want to realize in how we manage our transactions. Digital currencies users should, therefore, learn how to study the market trends and fork their investments in a manner that guarantees a competitive edge in terms of profits and security.

The undulating Dogecoin value

  • Having started as a joke, “will Dogecoin rise?” Is a question that puzzles many of the digital currency’s observers and users.
  • Compared to Bitcoins and other altcoins, the Dogecoin price is relatively small.
  • Dogecoin experienced an initial surge in value immediately after its inauguration.
  • For a better part of its lifetime, Dogecoin price has been a fraction of a Dollar, with the current Dogecoin value standing at $0.013339 USD.
  • The Dogecoin to USD value usually revolve around the current fraction of a Dollar with minimal gains or losses creating the curiosity under the question, “can Dogecoin reach 1 Dollar?”
  • The Dogecoin to Bitcoin price is currently valued at 0.00000096 BTC and has also been behaving like the Dogecoin to USD value.
  • If you have been asking ‘how much is Dogecoin worth?’ know that the digital currency has been making a name for itself with a market capitalization of over $1 Billion for the better part of 2018.
  • In the year 2017, the market capitalization of Dogecoin consistently rose, from as low as $0.3 Billion in January 2017 to as high as $1 Billion by December 2017. This is an indication that more and more people are still building confidence in the coin.
  • Despite being a joke, Dogecoin is still rising. We can however not tell the next joke that the controversial cryptocurrency is going to pull on us since despite being abandoned to a great extent by its developers, the coin is still surging from time to time.

Dogecoin mining

Like many other cryptocurrencies, Dogecoins can also be mined.

Mining basically involves your computer solving hard mathematical puzzles. A reward in the form of coins is given for every correctly solved puzzle.

The developers of Dogecoin came up with a fixed mining reward of 10,000 Dogecoins per block mined, after 600, 000 blocks have been completed.

Dogecoin mining secures the cryptocurrency’s network.

Additionally, mining ensures that the currency supply is programmed and distributed from time to time.

The difference between cryptocurrency mining and mining of precious metal such as gold is that the former’s mining rate is not influenced by its price, unlike the latter.

What does Dogecoin mining entail?

Dogecoin uses a proof-of-work mining system which requires both hardware and software to fulfill.

The hardware entails graphics cards and other computing elements whereas the software consists a series of software programmes for mining Dogecoin such as cgminer, guiminer, and cudaminer.

In order to send Dogecoins, transactions must be included in a block.

Dogecoin miners proof the transactions via proof-of-work.

  • They check incoming transactions in comparison with previous transactions in the blockchain.
  • If there is no double-spending detected, the miners prove the transactions by providing them with new blocks which are added to the existing blockchain.
  • Every new block added sends nodes on the network, which utilizes the miners’ work to continue verifying and transmitting transactions.
  • The block reward is paid to the miners, for each block mined.

Solo Mining versus Pool Mining

  • You can either choose to mine Dogecoin on your own or join a mining pool.
  • Mining on your own can be costly since the rewards are dependent on your computing power.

For example, theoretically, if you contribute a computing power of 0.00000001% to the overall mining process, you are most likely to earn a reward of (approximately) ~0.00000001%.

  • To gain more out of the mining process, it is advisable that you team up with other miners found in different Dogecoin mining pools such as Dogo Pool Directory and Doktorrf Pool Directory.This will assure you more rewards as a result of the pooling together of resources which adds up to higher computing powers.

How to mine Dogecoins

  1. Get the required hardware (graphics cards). AMD Graphics cards preferably. Optionally, instead of installing more graphics cards on your computer, you can make use of virtual servers such as Amazon EC2.
  2. Get and install a mining software. Popular mining software includes cgminer, guiminer, and cudaminer.
  3. You can then choose to mine on your own or join a mining pool. The second option is more profitable.
  4. After joining a pool such as Dogo Pool Directory and Doktorrf Pool Directory, you will be required to make your workers.
  5. You will then set up your miner on your device as per the provided instructions and begin the mining process.
  6. After earning some Dogecoins, you will log into your pool’s web interface and send them to an address of your choice.

Dogecoin faucet

  • A faucet is a website that grants you to earn free cryptocurrencies.
  • A Dogecoin faucet is, therefore, a website that grants you to earn free Dogecoins.
  • Faucets give lightweight puzzles for users to resolve in exchange for negligible rewards.
  • The cryptocurrencies are given out in faucets of a negligible value.
  • Practically, faucets are good platforms beginners who are still learning the ropes of cryptocurrencies. Those who cannot do transactions legally as a result of their location can also take advantage of faucets.
  • For one to join a faucet, he or she requires obtaining a receiving address where the earned rewards will be sent after meeting the set requirements.

What to consider while choosing a faucet to join

  • While choosing which type of faucet to join, consider the ones with the most streamlined platforms since the key aim of faucets is to give lessons on cryptocurrencies.
  • Additionally, those with the highest payouts are generally the best as they will give you a maximum reward for your efforts.
  • Remember, privacy and security are You should, therefore, look out for user ratings to learn about cases of scam and breach in user privacy, if at all there are any.

Dogecoin Wallet

You must have definitely used a wallet to store and secure your money. A Dogecoin Wallet is not any different from your leather wallet; the key distinction that lies between the two is that the former is digital and automatically updates all your transactions. There are different types of wallets for storing digital currencies which can be categorized into software, web, and hardware wallets.

  • Software wallets are installed and run on computing devices such as desktops, laptops, and mobile phones.
  • Web wallets do not require any kind of installations as they are hosted and operated via websites.
  • Hardware wallets are physical devices that can be connected to the internet at the time of use. Paper wallets are hardware wallets that cannot be totally connected to the internet.

Before choosing what type of wallet to consider, there is a list of parameters to consider including;

  • Safety; The security of your coins is important since they will be rendered inaccessible when hackers infringe your wallet.

Hardware wallets are the safest as they transactions verification signatures separate from the cryptocurrencies.

  • Reliability: The ease with which you can access and operate your wallet is also important.

Different wallets offer different degrees of convenience depending on the nature of your day to day operations. For example, mobile wallets are portable, unlike desktop wallets which cannot be used everywhere at any given time.

  • Fees: Different wallets charge different fee rates for every successful transaction.
  • User ratings: The user rating speaks volumes of a wallet, they tell you whether a given type of wallet is user-friendly or not, strengthening your decisions on the type of wallet to choose.

Not so many wallets support Dogecoin, however, among the few that promote the coin include;

Dogecoin Web Wallet

As the name suggests, Dogechain is a web-based Dogecoin Wallet. The wallet has received an approximately 3-star rating from its users.

It is an easy-to-use wallet and requires users to register using their email accounts.  The security files in the wallet are encrypted by a user’s browser but stored in the cloud, this is a safety precaution.

Some users have raised alarm concerning the sketchiness in the wallet and the reluctant manner in how their requests for support is handled.

Dogecoin Freewallet

This is a mobile-based Dogecoin wallet and available for devices operating on both Android and iPhone Operating Systems.  Dogecoin Freewallet is the highest rated wallet, with an averagely 4.5-star rating from both Android and iPhone users.

A key advantage of the freewallet is that it offers cold storage for its users, the most secure form of storage that any given cryptocurrency can enjoy. Additionally, in case you lose your device, you do not require a backup; freewallet provides you with the option of freezing your account.

Will Dogecoin Crash?

Last month, Dogecoin, a digital currency created originally as a joke has now exceeded the $2 billion market cap. The value of this cryptocurrency was driven by the massive interest growth of Bitcoin. Although its value experienced a slight dip ever since then, Dogecoin is still worth more than $1.5 billion. At the time of this writing, one Dogecoin is worth about $0.015438.

However, its creator, Jackson Palmer worries that people are focusing more on a digital currency’s investment potential instead of its core technology. He also thinks that the cryptocurrency market is experiencing a bubble that will inescapably burst. He pointed out that for now, it is difficult to forecast the amount of inflation it’ll suffer and how long the inevitably burst will take.

Dogecoin falls in the past

Dogecoin has had its share of dark days in the past. There had been a number of frauds that Dogecoin had to deal with. Most people will think that’s quite strange given that the crypto has a cute, innocent and friendly coin with a parody of Shina Inu dog on its outward appearance. But underneath the surface was a rather dark history punctured with scams.

  • The Moolah bankruptcy

Every enthusiast of cryptocurrency will always remember the Moolah scam and its bankruptcy Dogecoin had to face a few years back. When Ryan Kennedy, a rapist, and crypto scammer penetrated the community guided by an entrepreneur named Alex Green, he set out to make Dogecoin trading, buying and selling easier.

Throughout the whole scheme, he raised somewhere around $750,000 mostly from young people he easily manipulated. Kennedy threw Dogecoin around for tens and thousands of dollars. When the community learned that Moolah is more like a Ponzi scheme or a pyramiding scam, they were not happy about it.

  • Money Corrupts

And then there was the very interesting despicable scam where the community of Dogecoin raised funds to give to an Indian athlete for the Sochi Winter Olympics named Shiva Kashevan. The community was able to raise around $7,000 but the Indian luge athlete never receives the money. At first, the Indian Ministry of Sports denied having funds to send athletes, but at the end, they arranged the athlete’s travel expenses and the money raised was given back to the original donors.

Another worth mentioning was the manipulation of dogecoin’s price by Woolong before pandacoin was launched. All investors of the altcoin were ripped off because of the pump and dump he did on his millions of coins which eventually earned him a substantial amount of money just for himself.

Crash of Dogecoin

Dogecoin has weathered some pretty bad storm in the past with a handful of scammers and fraudsters taking advantage of its popularity that has people worry a crash of Dogecoin was inevitable. The Moolah bankruptcy hit the cryptocurrency really hard and the community has never really recovered from it.

So what are the scenarios that could possibly lead to a Dogecoin crash?

  • Pump and dump. This scenario has long been identified with the market of cryptocurrency. This scam is where groups of investors inflate a cryptocurrency value artificially by way of organizing mass purchases of a certain coin. This market manipulation is then recognized by Bittrex on its unregulated platform. Because this method helps push a coin to unacceptably inflated heights, a Dogecoin fall will be similarly enormous.
  • Big players dump big amounts. This method is called spoofy. Where big players trick other investors into thinking that there will be a price change because of them dumping big amounts when in reality they did not perform any trades. This is because they will cancel their orders once the price approaches their orders. Its effect would not have been half as bad if the doge holders, traders, and investors are not extremely manipulating it that can potentially lead to a crash for dumping huge amounts.
  • The coin using PoW. The current PoW system Dogecoin is using relies on an exclusive, insular and small group of LTC miners and with a barrier to entry is next to impossible. Litecoin miners will see some small improvements but for Dogecoin miners it’s not great news as they will see a drop on their revenue because of this as they are limited to mine only $1.33 worth of the coin each day. The situation for miners who only want to gather Dogecoin and not sell them is even way worse as they are only allowed to mine a tenth of Dogecoin that could be previously mined.

So…

Dogecoin started as a joke but ended up escalating the ladders of success in the cryptocurrency world. Though no one can clearly predict the coin’s future, it is truly certain that cryptocurrencies are really volatile forms of investments and will continue to give even more surprises to users in the future.

To learn more about Dogecoin and other cryptocurrencies, kindly check out our other educational posts, thank you.