Dogecoin: The Meme Stock of the Cryptocurrency Universe

In 2013, two friends created Dogecoin: a parody cryptocurrency that was meant to be worthless. It gets its name from the popular “doge” meme featuring a Shiba-Inu dog breed and is known for its poor spelling and grammar. Despite (or perhaps because of) this, it has become one of the most successful cryptocurrencies, with a market value of over US$50 billion as of 2021.

Dogecoin has jumped up 18,000% in the last year—definitely not staying worthless. Even when Bitcoin took a nose dive recently, Dogecoin was still going strong near its all-time high. As the meme dog says: “Wow. Much inexplicable.”

In the following article, we’re sharing why you need to buy Dogecoin and the top differences between this meme coin and the leading coin of the crypto world—Bitcoin.

Dogecoin Overview

Dogecoin, just like many other crypto coins, uses its own blockchain. This enables all transactions to be regularly updated and secure through cryptography.

Dogecoin’s blockchain utilizes a proof-of-work algorithm, which enables miners to utilize computers to solve complex tasks. By processing Dogecoin transactions and recording them on the ledger, miners earn coins as a reward.

Since an infinite number of Dogecoins can be mined, the cryptocurrency is very inflationary. This makes it a poor choice for payments or purchases since its value could drop at any time. The blockchain offers miners rewards for their work by creating new Dogecoins every day. However, this also means that speculative price gains in Dogecoin are unlikely to last over time.

Bitcoin Vs Dogecoin

Dogecoin is quicker and more efficient for processing payments than Bitcoin because it’s easier for miners to complete the mathematical equations that record transactions.

As we noted before, there is no limit on the number of Dogecoins that can be created in total. In contrast, Bitcoin has a lifetime cap of 21 million coins. This means that miners need to put in extra effort as time goes on to earn new Bitcoin. To some extent, it also helps ensure that Bitcoin will maintain and increase its value over time.

Should You Invest?

There is no lifetime limit on the number of Dogecoins that can exist, and millions of new Dogecoins find their way onto the market daily. This lack of scarcity means there is very little incentive to hold the cryptocurrency for the long term. Bitcoin’s value appreciation potential, on the other hand, comes from its system’s lifetime cap on the number of coins that can be created.

Per-coin, Dogecoin has had a very low value since its conception in 2020, typically sitting at $0.003. Due to its nature, people are more likely to give them away as opposed to other cryptocurrencies. According to experts, users on social platforms such as Reddit, Twitter, and Facebook can use Dogecoin as means of rewarding each other when they post interesting content.

Anytime you purchase a cryptocurrency, there is always some risk attached. This goes for Dogecoin as well. While it may not be a bad idea to buy a few coins and learn about the system, you should think twice before investing too much money into something that started out as a joke. One of the biggest benefits you’d get is diversifying your portfolio and gaining more experience.

How to Buy Dogecoin?

You can buy Dogecoin through a cryptocurrency exchange by investing U.S. dollars or another cryptocurrency into an account. From there, you are able to trade cryptocurrencies, including Dogecoin.

Another option is looking into online brokers. You won’t find Dogecoin with all of them, but many of the more conventional assets such as stocks, mutual funds, and bonds are available. They don’t offer quite as large a variety as exchanges do; however, you will still be able to find Dogecoin with most brokerages.

Many people choose to store their cryptocurrency in an online exchange, but this is not the safest option. If you want to protect your Dogecoin, it’s best to move them into a digital wallet. Wallets come in many forms—from exchanges and apps on your phone to physical hard drives. You can secure the wallet with a private password, providing an extra layer of protection against hackers that storing coins on an exchange doesn’t have.

Bottom Line

Now you know all the pros and cons that come with purchasing Dogecoin. If you plan on investing in crypto, Dogecoin is a great coin to diversify your portfolio, gain more experience in trading, and learn more about the overall system. After all, it may have started off as a joke, but it made its way up to other famous currencies on the market.