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…
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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 spelled 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 charitable 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 works”. There are even Shibe meme generators you can try. Here’s one I made just for you!
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!
Dogecoin has a large following on social media too. Reddit hosts a lively Shibe group who can tip each other with Dogecoin for posting good content. They can also use the platform to raise money for good causes. Dogecoin charities that use Reddit as a platform include SocksForTheHomeless and DogePizza.
So, now you know the story of Dogecoin and how it’s used. You also know that it has a lot of fans, but how big is Dogecoin as a currency? Let’s look at the numbers…
What Is Dogecoin Worth?
The short answer is, not very much. Today (08/17/2018), one Dogecoin is worth only $0.002383!
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 it 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…
The Technology Behind Dogecoin
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
Let’s look at how a transaction works on the Dogecoin blockchain. I’ll use Dogecoin’s international founders as an example;
Jackson lives in Australia. Billy lives in America. Imagine that Jackson wants to send Billy money without using a bank or paying any exchange fees. Jackson decides to use Dogecoin.
- Jackson sends 10 DOGE to Billy.
- The computers (nodes) on the Dogecoin blockchain check to make sure Jackson has 10 DOGE to send. If more than half of all the nodes on the network agree that Jackson has 10 DOGE to send, then the transaction can happen. The transaction can now be added to the blockchain.
- Billy receives 10 DOGE.
The nodes get a reward for checking transactions. The reward is a new Dogecoin. This is called mining. What is Dogecoin mining?
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 more information about Dogecoin mining, check out our Dogecoin mining guide.
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, let’s find out what is Dogecoin wallet?
A crypto wallet is not like a real wallet where you keep paper money and metal coins. Cryptocurrencies are digital, which means they only exist on computers. Crypto wallets are where you store the information you need to use your cryptocurrency. This information includes public keys and private keys.
There are four types of Dogecoin wallets to choose from
- Software wallets: Dogecoin offers two software wallets for download.
- Dogecoin Core: This contains the whole Dogecoin blockchain. It can take a long time to download. With this, your computer becomes a Dogecoin node.
- MultiDoge: This is light This means it stores enough information to use Dogecoin, but your computer won’t become a full node.
- Online wallets: Wallets like Dogechain allow you to use the Dogecoin blockchain without storing any of it on your computer.
- Paper wallets: These are printable wallets that you can hold in your hand. This is a secure way to store your Dogecoin. You can make a paper wallet at sites like the net.
- Hardware wallets: These are removable hardware devices, like USB sticks. They can be quite expensive, a Keepkey is $68 and a Ledger Nano is $96. Again, these are a secure way to store your Dogecoin.
Cryptocurrency exchanges are websites where you can buy and sell cryptocurrencies. You can buy and sell Dogecoin on most crypto exchanges. So what is Dogecoin’s best exchange? The exchanges that have the highest Dogecoin 24-hour trading volumes are Bit-Z and Bittrex.
When you use a coin exchange you will have to pay fees. If you want to get free Dogecoin you could visit a Dogecoin faucet. A Dogecoin faucet is a website where you can do tasks in exchange for free Dogecoin. Tasks include: watching ads, filling in surveys or playing a lottery game.
You might be thinking: “Hey, if I have to do tasks then the Dogecoin isn’t really free!” You’d be right to think that. Faucets don’t really give out free Dogecoin, and sometimes they don’t pay out any Dogecoin at all!
Important: You need to be very careful when using a Dogecoin wallet, exchange or faucet. In fact, you need to be careful when dealing with any cryptocurrency wallet or exchange.
So, how safe is Dogecoin anyway? Let’s find out…
Is Dogecoin secure?
Dogecoin has had several security problems since its launch;
On December 25th, 2014, a Dogecoin wallet called Dogewallet was hacked. The hackers stole 21 million Dogecoin, which was worth about 12,000 USD. I know what you’re thinking. Who would steal cute dog coins on Christmas Day? Don’t worry though. The Dogecoin community raised 13,000 USD to pay back users who lost money.
Blockchain technology is very safe. The Dogecoin blockchain has never been hacked. However, all blockchains – Dogecoin included – are at risk of 51% attacks.
A 51% attack is when more than half of a blockchain comes under the control of one person or group. If this happened, then that group could add invalid transactions to the blockchain. This would be a fraud and would be bad for any cryptocurrency that fell victim to this hack attack.
When Dogecoin first launched, it was at risk of a 51% attack. To stop this from happening, Dogecoin’s developers built a merged mining operation with Litecoin in 2014. The two currencies can now be mixed together. Which makes both networks more secure.
In September 2017, a member of the Dogecoin community was arrested in Britain for fraud. Ryan Kennedy opened a Dogecoin exchange called Moolah using the name Alex Green. Moolah went bankrupt and it is thought that Kennedy may have stolen the user’s money.
The community had trusted Kennedy and he lied to them. It’s thought to be the first crypto fraud trial. Jackson Palmer left his leadership role at Dogecoin in April 2015. He has hinted that he left because of Kennedy and the Moolah bankruptcy.
These problems show two things:
- Blockchain tech is safe but the things that come with it aren’t always.
- The Dogecoin community is strong — it’s had some problems but it’s still going.
I’ve talked a lot about Dogecoin’s past. So, what is Dogecoin going to do in the future?
What is Dogecoin Going to do Next?
The developers of Dogecoin haven’t made any major changes to the coin since 2015. This means that Dogecoin could get left behind and is why Shibes are leaving Dogecoin to join more advanced platforms like Ethereum.
So, what is Dogecoin doing? Why hasn’t there been any updates? Well, unfortunately, Dogecoin only has three developers and they’re part-time volunteers! One of Dogecoin strengths is its relaxed and fun-loving community. However, this is also a weakness because other currencies are way more professional.
Even Jackson Palmer has even said that cryptocurrency is a bubble. He has also said that any tech that hasn’t been updated in three years isn’t worth hundreds of millions of dollars.
It’s not all bad though! One of Dogecoin’s developers, Ross Nicoll, has said that he is working on an update now. The update is called Dogecoin 1.14 and it should be ready in the next few months. This update should make the platform safer and more stable. It could also mean that the value of Dogecoin could rise.
When we ask, “what is Dogecoin?”, the answer is simple. Dogecoin is one of the hundreds of cryptocurrencies to follow Bitcoin into the market.
The question we should be asking is, “what is Dogecoin doing differently?” The answer to this question is more important. Dogecoin is building a community. It is building a place where people can have fun, perform good deeds and learn about cryptocurrency.
Blockchain is the most important tech of the 21st century so far and has the power to make the world a better place. It can be easy to forget that because all anyone talks about is the price of Bitcoin!
Dogecoin is a celebration of crypto, it’s a blockchain party and everyone’s invited, including you!
So, now that you’ve read this guide, what is your favorite use-case of Dogecoin?