The Dogecoin 101: Basic Knowledge and Purchase Process
Dogecoin (DOGE) was launched in 2013 as a fun alternative to traditional cryptocurrencies such as Bitcoin. A meme inspired the Dogecoin name and Shiba Inu logo. Unlike Bitcoin, which is intended to be scarce, Dogecoin is designed to be abundant — 10,000 new coins are mined every minute, and there is no limit to the total supply.
(Photo: https://news.coincu.com/)
What is the mining process for Dogecoin?
Dogecoin, like other popular cryptocurrencies such as Bitcoin and Ethereum, is secured by mining. Thousands of computers compete around the world to mine Dogecoin in order to share the millions of new coins added to the supply each day, all while validating and processing network transactions.
At one point in Dogecoin’s history, any computer could be used to mine DOGE. However, as its popularity has grown, mining competition has increased, making it difficult for small-scale miners using standard hardware. A miner may be able to earn Doge with a powerful graphics processor unit, but a more powerful, specialized computer known as an ASIC is likely required in order to mine profitably.
How do I get my hands on Dogecoin?
Dogecoin can be bought the same way you would buy any other cryptocurrency. It’s a four-step process that’s pretty easy to understand.
1. Figure out how much to buy.
First, decide how much dogecoin you want to buy. DOGE has a unique way of giving out tokens that makes it possible to make an infinite number of tokens over time. This is a very important point that will be discussed in more detail later. For now, it’s important to know that Dogecoins are even more volatile than other cryptocurrencies because there is no limit to how many can be made.
2. Choose how you’re going to pay for it.
The next step is to decide how you’ll turn cash into cryptocurrency. This is an important part of choosing an exchange, which is the next step. Most exchanges let you send money through your bank, but some also let you use PayPal, debit cards, and credit cards. Be careful when paying for digital goods with plastic. Forbes says that credit card companies put exchange purchases in the same category as cash advances, which have a higher APR than regular purchases.
3. Select an Exchange
To buy dogecoin or any other cryptocurrency, you have to join an exchange. As millions of FTX users learned the hard way, your choice of exchange is important. The biggest companies in the field, like Coinbase, Kraken, Binance.US, and Gemini, are known for being stable, safe, and easy to use. Choose one that lets you pay with the method you prefer, is clear about its security and fees, and, of course, lists DOGE.
4. Choose a wallet.
To see, manage, and trade crypto, you need a wallet. Cold storage in a physical device called a “hardware wallet” like the Ledger Nano X or Trezor Model T is the safest option, but it is also the most expensive and hard to use.
Hardware wallets are safer than software wallets like ZenGo and MetaMask, but software wallets like ZenGo and MetaMask get your holdings off the exchange and out of the way of hackers who want to steal them.
The third choice is an exchange wallet, which is easy to use and doesn’t cost anything, but is also the least safe.
How do first-time buyers get Dogecoin?
Most people who are just starting out choose exchange wallets like the Coinbase Wallet because they work with the exchanges where they buy their first coins. They are free and simple to set up and use. It’s fine to start out with a wallet linked to a trusted exchange while you look into more secure software and hardware wallets, but most advanced crypto users quickly move on to options outside of exchanges.
Final Thoughts on Dogecoin
Even though Reddit users tip with DOGE and Elon Musk might add it to Twitter, dogecoin is not widely used in the real world yet. Like many other coins, it died during the crypto winter, and it’s still not clear if it will be a useful token in the future. But if you want to take a risk and buy this coin as an investment, the steps to do so are clear and easy.
Read more about Cryptocurrency here: Best Undervalued Cryptocurrencies To Buy for 2023
