What is Dogecoin (DOGE) and How Does It Work?

Introduction

Every internet user comes across memes which has morphed into memecoin frenzy. This article is about Dogecoin, an obscure meme cryptocurrency that users can read all about in this article.

What is Dogecoin?

Dogecoin is a popular meme coin that is inspired by an internet meme depicting Shiba Inu dog. A Shiba Inu is a Japanese breed of dog. The meme stands to represent funny and grammatically incorrect thoughts of the dog in the colorful captions. The Dogecoin meme currency rose to popularity in the wake of Bitcoin introduction during 2009.

Bitcoin introduced a decentralized mode of payment that allowed people to transfer value as a substitute for fiat currencies. Bitcoin was created by a mysterious person or group called Satoshi Nakamoto while Dogecoin was created by Billy Markus and Jackson Palmer.

How does Dogecoin Work?

Bitcoin is an open-sourced project meaning that anyone can view and use its source code. Developers use the source-code of Bitcoin to create Luckycoin (LKY).

Markus and Palmer use LKY code to create Dogecoin and the project was created within hours. Both creators departed from the project eventually, Markus sold his whole Dogecoin shares in 2015.

Does Dogecoin have a Utility?

Dogecoin has been touted as a meme currency for many years on account of its online honorable mentions. The project skyrocketed to mainstream popularity in 2021 but it does not offered any specific use cases.

Dogecoin has the same function as its core infrastructure predecessor namely Bitcoin. However, since Bitcoin is already working as a medium of exchange there are limited incentives for investors to utilize this coin.

Nevertheless, there are various Bitcoin alternatives available in the cryptocurrency sector such as Bitcoin Cash and Litecoin. However, the creation of Dogecoin was never intended it to morph into something of a practical utility.

Dogecoin was always intended as a satirical representation of Bitcoin but it was promoted by cryptocurrency advocates as literary irony. Another reason that Dogecoin is not adopted into mainstream adoption is its maximum supply that is uncapped. Due to this reason, Dogecoin becomes an inflationary currency.

Thus far, Dogecoin is mostly used for tipping or making online payments. Per unit cost of the currency has remained within $0.06 range. Dogecoin developers have sought to integrate it into various projects but have refrained from completing the task thus far.

However, there is an incentive for Dogecoin users of having faster transaction speed. Block time for Dogecoin is one minute per block. The project has been operational since 2013 and at a unit cost of $0.01 per coin.  

How to Trade Dogecoin?

Dogecoin is listed among the top 10 cryptocurrencies by market cap. The main reason behind it is that it is listed on various major cryptocurrency exchanges such as Coinbase and Binance.

As per CoinCodex, DOGE is listed on 107 cryptocurrency exchanges and ranked 18th token by trading volume. Dogecoin is listed, sold, purchased, and exchanged much like any other cryptocurrency. Investors can also make P2P Doge trades using wallets that are compatible with the token.

Top-Notch Features of Dogecoin

Dogecoin has integrated some important updates that are mentioned on its Github page. The most talked about feature of Dogecoin is economic transaction fees. In May 2021, Dogecoin transaction fees rose to $2.52 that is the highest level of fees in its history.

In comparison to other blockchains, the cost for Dogecoin has remained considerably small. There is always hype around Dogecoin for one reason or another.

The project sometimes it linked with massive projects such as social media platform etc. Around 50% of the total Dogecoin supply is reserved in 20 wallets addresses. Since Dogecoin does not have a token burning mechanism it is inflationary.

It is important to note that Dogecoin is also a PoW consensus model blockchain. Miners earn 10,000 Dogecoin for each new block verified.

How to Spend DOGE?

Day traders and other short-term traders can make considerable profits with Dogecoin. This currency has the potential to move ahead or reverse in price. Investors can make big bucks by performing margin trading with DOGE to cash in the minor price swings in this meme currency.

The cryptocurrency was utilized as a mode of payment for Dallas Mavericks of NBA in 2021. Since then many companies have used the meme coin for enabling payments.

Conclusion

Dogecoin has given rise to a barrage of meme coins with various similar tokens such as Shiba Inu and Floki Inu etc.  The presence and popularity of meme coins goes to show the wide range of cryptocurrencies existing in the blockchain universe.