Learn Cryptocurrency
18 Nov 2021

What is Dogecoin? – Know About the Meme Cryptocurrency

Mrudula M

Is it a meme? Is it a coin? Wait, it’s Dogecoin! Dogecoin is a cryptocurrency that was first conceptualized by founders Billy Markus and Jackson Palmer in December 2013. The coin was first introduced to the market as a “joke”. Going forward, the coin became a legit financial instrument and began attracting big investors. Dogecoin features the Shiba Inu dog from the “Doge” meme as its face and logo.

The coin has a huge community that believes in its ability to become an important crypto asset in the future. As of November 4th, 2021, Dogecoin’s market capitalization stands at a value of $34 billion. According to that valuation, it stands at the 9th position in the list of the top cryptocurrencies, by market cap. The official website of Dogecoin promotes the currency as the “fun and friendly Internet currency”, which also has a lot of fundamental appeal.

Dogecoin can be bought on crypto exchanges in return for money or any other crypto coin. Dogecoin uses the scrypt algorithm and has unlimited supply. It gains much of its value from the loyal communities it has garnered on Twitter and Reddit. They almost revere the coin for its unlimited potential. Most Dogecoins on this platform are used to tip the community members.

Key Takeaways

  • Dogecoin is a cryptocurrency that was first started by Dogecoin founders Billy Markus and Jackson Palmer in December 2013. The coin started off as a joke but turned legit pretty soon
  • Elon Musk has had a strong influence on the coin’s prices in the past. 
  • Dogecoins are unlimited in supply, meaning they are not scarce like other currencies
  • DOGE is listed on almost all reputable crypto exchanges in 2021. It stands at #9 amongst the top crypto coins by market capitalization
  • By 2025, the coin could be worth around $1.96, trading at almost 8x its current price. As of 06/11/2021, DOGE is worth $0.26.

Understanding Dogecoin

Dogecoin is an altcoin that has a huge user base around the world. It is traded, bought and sold against fiat currencies and other crypto coins on almost all reputable exchanges like CoinSwitch Kuber. On Reddit and Twitter communities, DOGE has been exchanged for physical, tangible items.

Convert DOGE to INR directly on CoinSwitch!

Most users use the coin to tip each other on online forums and platforms for their content or noteworthy views. Dogetipbot was a previously used transaction service that was implemented to use DOGE for community transactions.

On 8th May 2021, DOGE peaked at $0.72 each. From there, the coin has been largely consolidating. Recent regulations on cryptocurrencies by nations like China have wreaked havoc on the valuations of several coins. This includes DOGE. Wall Street Journal recently reported that a major reason for the fall in DOGE prices is the Chinese crackdown.

History of Dogecoin

Dogecoin was first created by Jackson Palmer in an attempt to mock the ongoing hype around cryptocurrencies. This was December 2013. Palmer had never been serious about his invention. He’s reported to have said that he believed it would amount to nothing more than a joke. However, slowly, DOGE started getting lots of positive reactions on social media, which led him to buy the domain dogecoin.com

Billy Markus, a software developer based out of Oregon, reached out to Palmer and offered to build the software behind an actual Dogecoin. Markus had the idea of basing the DOGE code on Luckycoin, which was itself derived from Litecoin (LTC).

Palmer and Markus launched the coin publicly on December 6, 2013. Two weeks later, the value of DOGE jumped 300%. Ever since, the coin had been showing consistent and unprecedentedly-high returns to investors until it peaked May 2021.

Today, DOGE uses Litecoin’s scrypt technology and is based on a Proof-of-Work consensus.

The Elon Musk Tweet

Elon Musk has shown a huge interest in Dogecoins in the past through his Twitter account. Musk often tweets about different crypto coins, affecting their prices in the short term. 

When Tesla announced that they were going to accept Bitcoin as a payment method in February 2021, its prices soared.

However, more recently, Musk has raised concerns about the environmental costs of mining and maintaining Bitcoin. This had caused the prices to come crashing down for a short time.

He brought huge changes in the prices of the coin just by sharing memes on social media.

Although swing traders often stand to make money from such market fluctuations in the short term, Musk’s influence over the Dogecoin market is temporary at best. Experts advise investors to choose their coins and investments carefully and after conducting due diligence. Most people stand to lose money by following social media hypes.

The Technology Behind the Coin

Decentralised Finance or DeFi is the form of finance that does not rely on middlemen to offer financial services. This is accomplished using ‘smart contracts’, one of the biggest potential uses of certain crypto coins like Ethereum and Dogecoin. These smart contracts are automated agreements that do not need intermediary validation or approval to get executed. They are based on the blockchain instead.

DOGE cannot be used to create smart contracts directly like ETH. However, it can be ‘wrapped’ to be used to perform the same functions. A piece of Dogecoin technology like the Ren Project has enabled DOGE to be used on the Ethereum blockchain and in turn, be accessible to the DeFi network.

Dogecoin started off with a supply limit of 100 billion coins. This is far more than what the top digital currencies were allowing at that time. With no hard cap on the number of Dogecoins that can be in circulation, the rate of supply of coins will only double once every 20 years. This will ensure that the rate of inflation in the coin’s value goes down with time. For instance, the inflation rate that started off at 5% in 2015 came down to < 4% in 2019. Going further, it is expected to be around 3% by 2027 and 2% by 2035.

Dogecoin Mining

Dogecoin’s blockchain network employs a Proof-of-Work consensus algorithm. This means that individuals have to “mine” the coin by adding new blocks of transactions to the existing blockchain.

Miners use their machines to try and create a fixed length of numbers that is suitable to crack the code of the block. The miner that manages to guess the correct ‘hash’ first gets the reward of Dogecoins.

Unlike the vast majority of cryptocurrencies in the market, DOGE does not have a maximum supply. On the other hand, the supply of DOGE will continue to increase over time as more and more coins are created through Dogecoin mining. The time taken to mine one block of DOGE is roughly 10 minutes.

DOGE and LTC also use a different algorithm called Scrypt. This is less complex than the traditional mining techniques used by Bitcoin. This means that compared to Bitcoin, DOGE is much faster and more efficient in verifying transactions and rewarding its miners.


Types of Dogecoin Mining

If you are someone who is looking to enter the DOGE mining industry, you must know about these different approaches prevalent in the industry:

  • Individual mining – Individual mining is mostly for people who want to mine DOGE for fun or simply learn the process of mining in depth. Solo miners usually use a single or couple of GPUs on their computers. However, mining alone with a regular computer is a difficult process. Users don’t usually see any returns unless they decide to invest in expensive mining ASICs and electricity.
  • Pool mining – Pool mining is a term that is used for a collaboration of miners where all of them combine their hashing power to validate transactions on the blockchain. Because of this superior hashing rate, a larger pool is always more likely to guess the correct hash. As more blocks are mined by a pool, participants get a small percentage of the spoils, proportionate to their hash contribution.

  • Cloud mining – Cloud mining is a relatively newer way of mining DOGE without having the computing power yourself. In this method, you rent hashing power from a data centre and pay a monthly or annual fee based on the amount of data you’re renting. If you’re experienced in mining and manage to mine some blocks, you get to keep all the profits after you’ve paid the data centre. Popular cloud mining pools that support DOGE include Genesis Mining and Nicehash.

Worth of Dogecoin

As of 6th November 2021, the market capitalization of Dogecoin is estimated to be $34 billion. As a currency, it ranks #9 on the list of the top cryptocurrencies by market cap. With that valuation, DOGE controls around 1.26% of the entire crypto market.

In 2021, the coin hit its highest ever price, $0.73 (approximately) and has consolidated since then. According to future predictions, DOGE is expected to grow in the long term because of a higher involvement of DOGE communities on various social media channels.

As per the one-year forecast by major experts in the field, DOGE is expected to cross the $1 mark by the end of 2021. The predicted high for 2021 might be around $1.07 and on the downside, the lows might be somewhere around $0.91. 

As 2022 approaches, the predicted highs haven’t moved around a  lot and are currently sitting  around the levels of $1.22 and on the downside, they are projected to fall upto $0.98. By 2025, experts predict that the same coin could be worth around $1.96, trading at almost 8 times its price today. As of 06th November, DOGE is worth $0.26.

Dogecoin Wallet

Dogecoins are cryptocurrencies that can also be stored in private wallets with extra security and safety. Contrary to popular belief, using a crypto wallet does not mean that the wallet actually holds your coins. Instead, the Dogecoin wallet is responsible for keeping your private keys safe, the ones which give you access to your coins on the blockchain. All cryptocurrencies are stored on the blockchain itself. They can only be accessed by different owners differently using their private key.

Types of Dogecoin Wallets

  • Paper wallets – If you were to use a paper wallet to store your Dogecoins, your crypto keys would be written on a physical medium like paper and stored in a secure place where they would be kept privately. This, of course, makes using the currencies harder and less efficient than other wallets, which store your keys digitally. For most people, it makes more sense to store their keys on online platforms if they plan to transact frequently.
  • Hardware wallets – Here, your Dogecoin private keys are stored in a USB drive and kept in a safe place. They’re better than paper wallets because simply connecting your USB to a computer will do the job.
  • Online wallets – These keys are stored in an app or a specially-designed software, usually one that is protected by 2FA. The advantage of using an online wallet is that it makes receiving, sending and using your crypto very easy.
    CoinSwitch Kuber is one of the most secure cryptocurrency wallets that you can use to store your Dogecoins.

All your cryptocurrencies on the blockchain can only be accessed if you have your private key. If you don’t have your private key, you don’t have your crypto coins. Hence, it is very important to keep that key safe and secure. Although most users prefer to use online Dogecoin wallets because of their security mechanisms and ease of use, you must weigh your options against each other and decide what’s best for you.

What’s in Store?

The future of Dogecoin is dependent on the future of the entire crypto market in general. This goes for every single altcoin out there, trying to make it long term. The cryptocurrency shift from fiat and other forms of payment has been gradual but stable.

More and more people are opening up to the advantages that cryptocurrencies present in the current financial scenario. Major institutions, companies, and even national governments are embracing the utility of Bitcoin and betting on its future.

While Dogecoin is the top cryptocurrency, it is certainly one of the top players. Being #9 in the top 10 list, it commands a relatively huge market share too. It is true that Dogecoin is unlikely to overtake Bitcoin anytime soon. 

However, DOGE communities have been growing larger and larger with more people getting serious about it in social media circles. The coin is already being used to tip creators on platforms like Reddit and has been growing in popularity.

The gradual increase in Dogecoin’s acceptance, positive price predictions, and acceptance of cryptocurrencies in general make the DOGE investor fairly optimistic. 

Benefits of investing in Dogecoin

Dogecoin, just like any other cryptocurrency, or even asset class, has its pros and cons of investments. While returning more than 5500% in the recent past to investors, it is also incredibly risky, both in the long and short term. However, if you are looking to buy DOGE and have a big risk appetite, here are some benefits that might encourage you:

  • If you had invested $1000 in Dogecoin on January 1, 2021, you would now have $85,000!
  • Dogecoin is going through fundamental changes in terms of lower transaction fees and higher verification rates through mining
  • There’s some money to be made in the short term by timed and calculated investments (Note: This is not investment advice. Cryptocurrencies are volatile asset classes and are subject to market fluctuations. Please conduct your own due diligence before investing.)
  • Dogecoin is listed on almost all reputable cryptocurrency exchanges and hence, converting DOGE to another coin is also easy and efficient
  • It has a strong community that believes in the utility of the coin and is betting heavily on its future prospects

The best platform to use when investing in DOGE is CoinSwitch Kuber. Read on to find out more about how you can get started right away!

How to invest in Dogecoin in India

To invest in DOGE in India, you must first choose an exchange. The biggest exchange operating in India in terms of its user base is CoinSwitch Kuber, with more than 10 million customers. CoinSwitch Kuber supports DOGE and hundreds of other coins which you can buy and trade in.

To invest in DOGE in India, you must first open an account with CoinSwitch Kuber. Follow these steps:

  • Open CoinSwitch – CoinSwitch is available as a mobile app for both Android and iOS devices. You could also visit our website and enter your phone number and we’ll SMS you a link to the app!
  • Register and open an account – by entering a verification OTP and setting up a new PIN.
  • Complete your KYC – Enter your name, PAN number, date of birth and your email address for basic verification of your identity. You will then be asked to upload your PAN card’s picture, along with a picture of a government issued ID card
  • Add bank details – To transfer funds from your bank account to the CoinSwitch app, you need to provide the app the relevant details. These include your account number and IFSC code only. The app sends Re. 1 to your account to verify your details, then the account is linked to your profile.

Conclusion

This is everything you need to know about Dogecoins and investing in them. From its inception to its future, this article has covered several aspects of the meme coin. How it emerged, trends it followed, prices now, and whether it is a viable investment class for a beginner investor. 

However, we would like to encourage you to conduct your own research before you make a decision. This article is not to be deemed as investment advice.

Download the app to buy Dogecoin

Common FAQs

When was Dogecoin created?

Dogecoin is a cryptocurrency that was first started by Dogecoin founders Billy Markus and Jackson Palmer in December 2013. The coin was first introduced to the market as a “joke”, making fun of the wild speculation in the crypto markets at that time.

What will be Dogecoin worth in 2025?

By 2025, experts predict that the same coin could be worth around $1.96, trading at almost 8 times the price of the coin today. As of 06th November, DOGE is worth $0.26.

How much is Dogecoin total supply?

Unlike the vast majority of cryptocurrencies in the market, DOGE does not have a maximum supply limit. This means, the supply of DOGE will continue to increase over time as more and more coins are created through Dogecoin mining.

Who is the founder of Dogecoin?

Billy Markus and Jackson Palmer are the founders of Dogecoin.

What is the Dogecoin wallet address?

Dogecoin wallet addresses are keys that can be used to transfer coins to or from your wallet. These addresses can be shared with others who are trying to send you coins to receive the same.

Top Dogecoin exchanges?

Dogecoin is a popular cryptocurrency that is listed on almost all reputable crypto exchanges in 2021 like CoinSwitch Kuber.

Is Dogecoin a legit cryptocurrency?

The coin was first introduced to the market as a “joke”, making fun of the wild speculation in the crypto markets at that time. However, in the upcoming years, the coin became a legit financial instrument and began attracting big investors.


P.S: KuberVerse is an educational initiative. Anything expressed here directly or indirectly is not investment advice. And we ask you to do your own research before investing.

Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.

writer

Mrudula M

Content Writer

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