Beginners Guide: What is Dogecoin?
If people only know one thing about cryptocurrency, then that one thing would be about Bitcoin. If Bitcoin was a popstar, it would be Elvis, the Beatles and Michael Jackson all in one. It might even be Taylor Swift as well! Yet, we’re here to find out what is Dogecoin, so let’s get started.
People tend to talk a lot about Bitcoin. It can be easy to forget that there are hundreds of other cryptocurrencies. Some of these cryptocurrencies may even be better cryptocurrencies than Bitcoin.
But cryptocurrencies aren’t just digital assets, they can be communities too.
One altcoin with a growing community is Dogecoin. In this guide, I’m going to tell you about how Dogecoin got started, how it’s used and why it’s popular. So, when someone asks you, “what is Dogecoin?” You’ll have the answer.
The story of Dogecoin begins in 2013, so let’s start there…
The Story of Dogecoin
By December 2013, one Bitcoin was worth 1,083.14 US Dollars. The world was starting to take cryptocurrency seriously. Billy Markus and Jackson Palmer thought that cryptocurrency was being taken too seriously. They thought that crypto should be about fun and not just about money. So, they decided to create their own coin. So what is this fun coin? What is Dogecoin?
Dogecoin was launched on December 6th, 2013. Its mascot is a popular meme of a Shiba Inu dog and the way it’s spelt and pronounced is borrowed from an internet puppet show. Cool, eh?
The internet got very excited by this bold, new coin and started to ask, “well, what is Dogecoin?”. One answer is – it’s a coin with a dog on it! But that’s not the whole story.
What started as a little joke has now become a huge crypto community. Dogecoin is commonly known as the “friendly” coin, and for good reason. Since its success, Dogecoin has been known for its charity donations and other good causes.
Fans of Dogecoin call themselves Shibes! They even have their own Shibe language. It’s made up of funny broken English terms and phrases like, “such amazing”, “much grateful” and “many work”. There are even Shibe meme generators you can try. Here’s one I made just for you!
This cap raises an argument that Bitcoin could have problems scaling. However, since Bitcoin is essentially infinitesimally divisible (meaning users can transfer as little as 0.00000001 bitcoins), this doesn’t really create a scaling issue. The magic number of 21 million is arbitrary.
Dogecoin fans are a special group and have used Dogecoin to do some special things. What things, you ask? Read on…
How Is Dogecoin Used?
Now you know a little about what is Dogecoin, let’s see how it’s used. The Dogecoin community uses its size to support good causes all over the world.
In 2014, the Dogecoin community raised 50,000 US Dollars to help send the Jamaican Bobsled Team to the Sochi Winter Olympics.
For World Water Day (March 22nd 2014), loyal Shibes raised 30,000 US Dollars to help build clean-water wells in the Tana Valley, Kenya.
Shibes have even tried NASCAR (North-American Stock Car Auto Racing). In March 2014, Shibes paid 55,000 US Dollars to sponsor a driver named Josh Wise. Wise raced in a Dogecoin themed car!
What Is Dogecoin Worth?
However, Dogecoin has no supply limit. This means that there is an endless amount of Dogecoin and so the price will not increase as much as other coins like Litecoin and Bitcoin which have limited supplies.
There will only ever be 21 million Bitcoins. However, there are nearly 114 billion Dogecoin in circulation right now. This makes Dogecoin great for small transactions which is why it is used for tipping and donations.
So, the price of one Dogecoin is beneath 1 cent, but that doesn’t mean Dogecoin is worthless. Dogecoin has a market cap of 330,900,232 US Dollars as of today, but was higher than 1 billion USD in January 2018!
All these numbers are great fun (right?), but how do Dogecoin transactions really work? Let’s have a look…
Curious about what is Dogecoin technology? Well, all cryptocurrencies are based on blockchain technology. Blockchains are huge digital databases (sometimes called ledgers) that store transaction information. Every transaction that’s made with Dogecoin is stored on the Dogecoin blockchain.
Blockchain information isn’t stored in one place though, it’s stored across thousands of computers called nodes. This is why blockchains are called decentralized networks. Blockchains don’t operate on a centralized server.
When a node attempts to confirm a Dogecoin transaction, it is entered into a kind of lottery. This lottery involves guessing a code that is given to the newest block of transactions that’s added to the blockchain. In which the prize (or reward) for the node that works out the correct code is 10,000 DOGE.
This Dogecoin lottery happens once every minute. This means that a new set of Dogecoin transactions are confirmed every minute.
Dogecoin’s transaction time is much faster than either Bitcoin or Litecoin. This is another reason why it has become so popular as a quick online tip or donation.
For the transaction in the example to work, Jackson and Billy would need more than just the Dogecoin blockchain. They will also both require a Dogecoin wallet. Now that you know what is Dogecoin mining.