Educational 
September 11, 2024 
27 min. 
Decentralization has changed the perspective of financial affairs in the recent past. It takes the power from authorities and delegate it to people – the owner of digital assets. Thus, the buzz for cryptocurrency has reached new heights, including meme coins like Dogecoin and Shiba Inu.
What is a meme coin and Dogecoin? Dogecoin is the first meme coin, which started in 2013 as a joke for Bitcoin. The creator of Dogecoin replicated Bitcoin as it was the most popular cryptocurrency of the time. It was envisioned to show the world that anyone can do what Bitcoin was doing.
Despite starting as a mere meme coin, it has grown its audience and gained a renowned position in the crypto market. We will cover each and every detail that you need to get started with understanding and generating revenue from Dogecoin.
This guide will help you learn about:
- What is Dogecoin?
- Dogecoin blockchain and its features
- Working of Dogecoin
- DOGE token and its supply
- Dogecoin mining
- What does Dogecoin’s future look like?
These are all essential areas to leverage the potential of cryptocurrency especially DOGE and pave the way for your investment journey.
Dogecoin – Overview
As the name and logo of DOGE imply, it is no more than a meme coin. In 2013, an unconventional crypto project started in the form of a lighthearted alternative to Bitcoin. This project resembled Shiba Inu, a hunting dog from Japan.
Despite the valueless aim of this canine-themed cryptocurrency, it is now a valuable asset and one of the top 10 crypto projects in Decentralized Finance (DeFi). Dogecoin is not a dynamic cryptocurrency or blockchain like Ethereum, Shiba Inu, etc. However, it offers value to consumers and crypto enthusiasts.
At its core, it replicates Bitcoin with some tweaks and differences. For instance, Bitcoin has a limited and scarce supply, contributing to its uncontrolled and spiked price. On the contrary, DOGE crypto tokens lack a maximum supply limit. We’ll discuss more about it later in this article, let’s have a look at its history first.
History of Dogecoin
The story of Dogecoin commenced in December 2013. Two amazing computer masterminds, Bill Marcus – the IBM engineer, and Jackson Palmer – the Adobe Systems engineer, aimed to contribute something funny and valuable to the crypto market.
Litecoin and its open-source technology were the primary inspiration for the development of Dogecoin crypto coin and blockchain. Be mindful that Bitcoin itself is a fork or branch of Bitcoin technology. The proof of work consensus mechanism of Bitcoin is the playground for miners to develop new assets for both Litecoin and Dogecoin.
One more influential thing about Dogecoin is its vibrant and widespread online community. It was the time when digitalization had been at its peak, and memes were the ultimate source of laughter and mood enhancement. Dogecoin was the approach to add to the awareness of Bitcoin functionality using the then-famous Shiba Inu dog meme.
Value Proposition of Dogecoin
In the beginning, Dogecoin was nothing more than a funny crypto in its community. It was the year 2021 that changed the landscape for this crypto project, and made it a billion-dollar asset. How does Dogecoin gain value?
The answer is its abrupt and massive supply. If we compare Dogecoin with the leading Bitcoin, we can see one major distinction between the two. That is the limited mining and supply of Bitcoin.
According to CoinMarketCap, the circulating supply of DOGE is 145.87 billion coins. On the other hand, Bitcoin (BTC) has a total supply of less than 20 million BTC. Moreover, the mining rate also differs for both crypto assets, ranging from 10,000 DOGE per minute to 6.25 BTC per 10 minutes.
Thus, the higher number of available and mined Dogecoins add value to the crypto market. Be mindful that the per-token price of DOGE is less than or equal to 9 cents. Yet crypto experts are forecasting DOGE to be a futuristic investment asset for investment portfolios.
Dogecoin: An Open-Source Blockchain
The core technology behind the significance of cryptocurrency is blockchain technology. Blockchain refers to a decentralized and censorship-resistant ledger that stores records of transactions and financial data. There are multiple examples of blockchain. The prime names are Bitcoin, Ethereum 2.0, Dogecoin, and more.
Dogecoin, though a meme coin, has blockchain technology fueling its ecosystem and functionality. Akin to other crypto assets, the DOGE token also has a robust blockchain on its backend. Dogecoin blockchain is the fork of Bitcoin but not a direct one. It exists on top of the codebase of the Litecoin blockchain.
It is noteworthy that the Dogecoin blockchain is open-source and decentralized. This means that anyone can fork its code and develop their own decentralized applications with additional features. Moreover, the Dogecoin blockchain has lifted the restriction of limited supply that Bitcoin has. Thus, Dogecoin tokens are available in vast amounts for traders and investors.
Working of Dogecoin
The first thing to understand about the workings of Dogecoin is the proof-of-work consensus mechanism. PoW is the leading method for the creation and authentication of blocks on the blockchain or creating new coins in a network. As we mentioned, Dogecoin has forked the codebase of Litecoin, ultimately the codebase of Bitcoin.
According to Science Direct journal, there are several crypto projects that use the PoW consensus mechanism. That includes:
- Bitcoin,
- Ethereum – though it has transitioned to Proof-of-Stake (PoS) in Ethereum 2.0
- Litecoin
- Zcash,
- Dogecoin,
Apart from PoW technology, Dogecoin is a decentralized, distributed and safe digital safe for the working of crypto transactions on the Dogecoin network. The security of the network is due to sCrypt cryptography. sCrypt refers to a distinguished mining algorithm based on a key derivation function (KDF).
Dogecoin allows miners to decode and solve complicated puzzles or mathematical calculations to sustain the security of the Dogecoin blockchain. sCrypt serves as the core technology behind this process. In doing so, Dogecoin miners gain rewards in DOGE that they can trade or hold for profits.
Features of Dogecoin
With the primary goal of creating a community-driven and user-friendly crypto project, Dogecoin shifted its gear of popularity and value after its creation. Today, it is one of the leading cryptos in the market. Despite the limitless supply and low per-token price, the growth of Dogecoin tokens is a testament to its superb community and supporters.
Multiple factors have played pivotal roles in its popularity, especially social media presence and influential acceptance. For instance, it is one of the few cryptocurrencies that the American business icon, Elon Musk, has talked about a lot.
On top of that, Dogecoin diverged its focus to make DOGE the primary choice for payments in crowdfunding, charities, and other events. Businesses and retailers also have stepped up to embrace DOGE as a payment method. These are due to the numerous features that this crypto offers.
1. Accessible Mining
Mining is the process of creating or verifying records of transactions on a blockchain network. There is a network of computer intellects and their job is to solve complex and puzzling mathematical expressions. This way, verification of new data or transaction records is easier and trustworthy.
Unlike other blockchain networks, developers of Dogecoin have made mining effortless using the sCrypt algorithm. It doesn’t mean that anyone can solve those puzzles and become a miners. You will need to achieve technical knowledge and excellence before you can start mining cryptocurrency.
However, the sCrypt algorithm is highly accessible and secure at the same time. Therefore, it is the best feature of Dogecoin, making the blockchain network safe against cyber threats as well as accessible to regular users. You don’t need to own high-spec equipment like Application-Specific Integrated Circuit (ASIC), etc.
2. Efficient Transaction Processing
Every blockchain goes through a steady and complicated procedure to verify and approve transactions. Once it verifies the data, it adds it to the blockchain and continues the chain of record.
Dogecoin has an upper edge over Bitcoin in terms of transaction processing. As per Coinbase, the block creation time of Bitcoin is 10 minutes. It means that it takes time for Bitcoin to process and add new blocks to the blockchain. On the other side, Dogecoin takes only a minute to do a similar task.
Therefore, you can make faster transactions on Dogecoin than on Bitcoin. It is also true that this feature is an improvement in the Dogecoin network given it replicates Bitcoin architecture. Be mindful that other blockchain networks are much faster and more efficient than Bitcoin and Dogecoin, such as Ethereum.
3. Limitless DOGE Supply
There is a theory of supply and demand in Economics. Demand is the most important factor for the increased value of a financial asset, be it physical or digital. However, increasing supply adversely affects the demand and value of the same asset.
However, Dogecoin is a unique crypto project in terms of its coin supply. The limitless supply and mining capabilities of Dogecoin are a direct variation of Bitcoin. The supply of Bitcoin is limited to about 21 million BTC. Bitcoin also goes through crypto halving every four years, leading to a massive surge in its price.
On the other hand, the unlimited supply and mining of Dogecoin is one of the reasons for the low per-token price. It doesn’t imply that DOGE is in less demand, thanks to its vibrant and supportive community of Dogecoin enthusiasts.
Explore Nexo crypto application in 2024 with our guide.
4. Vibrant Community
Regardless of the top-notch features and matchless opportunities that something offers, it will be unimportant without significant support from the public. The number of real-world users defines the strength of a crypto project or token.
Given this point, Dogecoin (DOGE) has a loyal and amazing community of Dogecoin users and investors. They stand strong in tough situations like the Crypto Bubble Burst in 2018, which led crypto to lose over 400 billion USD. Therefore, Dogecoin stays on the list of top cryptocurrencies with the least per-token price.
On top of that, community members of Dogecoin participate in charity events, crowdfunding, and every other activity that Dogecoin offers. They also offer tipping and supporting content creators with DOGE tokens, boosting their market value and global acceptance.
Dogecoin Tokenomics
As we read, the Dogecoin network includes blockchain and cryptocurrency, DOGE. DOGE is the native cryptocurrency in the network that is important for the smooth functioning of the blockchain. The Dogecoin community benefits extensively from DOGE because it is their ticket to trade, exchange, payments, and international transactions.
The leading earning opportunity from Dogecoin is either investing in it or mining DOGE for incentives and rewards. According to crypto experts, the limitless supply of Dogecoin is both beneficial and hazardous.
It is beneficial this way: when you start mining Dogecoin, you will be making more money with it. However, investing in Dogecoin is less lucrative because of the daily influx of new Dogecoin, causing a decrease in its price hike.
DOGE Supply and Distribution
To understand the earning opportunity of Dogecoin even better, we must look at the coin supply and distribution of DOGE. Early in 2013, the developer duo of Dogecoin set a limit for the maximum supply of DOGE. The total supply was 100 billion, making it deflationary.
However, Dogecoin creators soon altered this monetary policy and introduced infinite DOGE supply. This led to an inflationary factor in Dogecoin, causing its value to decrease over time just like conventional fiat currency. Currently, the total and circulating supply of DOGE amounts to about 145.87 billion DOGE.
Furthermore, it is the 8th leading cryptocurrency in terms of market capitalization equaling $14.09 billion as of now. The 24-hour trading volume is also significant, at about $390.57 million. It is worth noting that this trading volume is adequate for the reliable performance of a crypto project in the market.
Dogecoin vs Bitcoin
Bitcoin is a massive cryptocurrency in the decentralized market. There is not a single altcoin near to the value of Bitcoin due to its global sensation. One more thing about Bitcoin is the control it has over altcoin’s prices. For instance, a plummet in Bitcoin value ultimately devalues the overall cryptocurrency market.
The Dogecoin is a valuable asset albeit it starts as a funny crypto coin. There are some key differences between Bitcoin and Dogecoin. One of the key reasons for these distinctions is that Dogecoin was inspired by Bitcoin and improvised Bitcoin codebase.
Here is a table that differentiates Bitcoin from Dogecoin.
|
Dogecoin |
Bitcoin | |
|---|---|---|
|
Launched in |
December 2023 |
January 2009 |
|
Market Capitalization |
$14.09 billion (Ranked 8th) |
$1.08 trillion (Ranked 1st) |
|
Transaction Processing Time |
1 minute for new block creation on the blockchain |
10 minutes for new block creation on the blockchain |
|
Lifetime Capitalization |
Unlimited supply of DOGE due to inflationary monetary policies of Dogecoin |
21 million BTC for a lifetime, making it harder for BTC miners to earn new Bitcoin |
|
Transaction Costs |
A transaction fee of Dogecoin ranges from $0.01 to $0.05 | The average transaction cost of Bitcoin is 0.6387 BTC |
DogecoinSwag – The Official Store
Dogecoin network launched an eco-friendly and sustainable fashion solution to combat environmental pollution. The Doge Swag is a T-shirt manufacturing and selling marketplace of Dogecoin for its vibrant community. However, it is open for anyone to buy and use Doge Tees.
The best thing about this initiative is to recover from the textile waste created every year. Therefore, it is not just a business model for Dogecoin but also a sustainable and eco-friendly endevaor. The unique thing about Doge Swag is the QR code on every product it manufactures.
Using this QR code, you can return the T-shirt to Doge Swag and it will remake it for free. Consequently, you will be contributing positively against textile waste, which makes it the second leading land pollution after fossil fuels.
Mining Dogecoin
As we read earlier miners can validate information and data on the Dogecoin blockchain and get rewards for it. There are several technologies and tools for miners to do so. That includes sCrypt, a mining algorithm that shapes the complexity of mathematical equations for the mining of Dogecoin.
Another important hardware in DOGE mining is Dogeminer. Dogeminer is a node in the Dogecoin blockchain. What does it mean by a node in blockchain? Well, it is a computer or set of computers hosting a copy of the entire blockchain.
The role of the Dogeminer node is to determine the inclusion of transactions on the Dogecoin blockchain. Dogeminer also adds the transaction record to the immutable shared ledger once the record is validated. This entire mechanism comes under the umbrella of the Proof-of-Work consensus mechanism.
DOGE mining involves multiple approaches, mainly:
- Solo Mining: As the name implies, Solo Mining means that an individual miner carries out the entire validation process on the Dogeminer hardware for the Dogecoin network.
- Mining Pools: This refers to when multiple miners collectively use their computational power and intellectual resources to mine better and earn more rewards. Typically, mining pools are more lucrative than solo mining.
- Cloud Mining: There are several cloud-based data centers that mine Dogecoin. Miners purchase their subscriptions on a monthly or annual base. Then, the cloud miners validate the Dogecoin network on their behalf and offer them rewards and incentives.
Investing in Dogecoin
Dogecoin is becoming popular with each passing day. It left no stone unturned to level up its blocckhain and crypto asset to reach a successful name in the crypto market. There are many perks of Dogecoin, but one drawback is the unlimited token supply.
Therefore, investors don’t fancy holding DOGE for longer. The reason is less or no return on their investments as the value of DOGE tokens has stopped to ascend after 2021. Moreover, the direct competition from Shiba Inu (SHIB) token has added to the difficulties for Dogecoin.
However, if you want to get started with investing in Dogecoin, this is the step-by-step process.
- Pick Your Crypto Wallet: The first step to investing in Dogecoin is a cryptocurrency wallet. It refers to the storage of private keys for your crypto holdings. Every crypto asset has a private key, which you must store securely so that you never lose the asset. Therefore, a crypto wallet is pivotal for the safety of your investment.
- Set Up Your Wallet: With multiple types of crypto wallets, such as custodial, hot, and cold wallets, you must decide which one suits your needs. Once you have decided on your wallet, the next step is to configure it. Ensure that you have multiple wallets and that they are well-connected.
- Buy a Handful DOGE: This is the step where you actually start investing in DOGE.
How to Buy Dogecoin (DOGE)?
Buying Dogecoin is effortless and convenient due to its popularity. Almost every cryptocurrency exchange allows users to buy, sell, and exchange Dogecoin. Some of the top crypto exchanges where you can buy DOGE include:
- Binance
- Coinbase
- Gemini Crypto
- OKX
- Bybit
- Robinhood
The first thing to do when buying DOGE from these exchanges is to register on their platform. If you’re already using these platforms for investment or trade, you should skip this step. Otherwise, you must sign up with your account and verify your information as per Know-Your-Customer (KYC) compliance.
Then, you will buy a stablecoin Tether (USDC) and exchange it for DOGE. Afterward, you can get started with holding it till you make profits. And leverage trading is also available for DOGE, which is a suitable way to compound your profits or losses. Learn more about compounding crypto investments here.
Conclusion
Dogecoin is an exemplary addition to the cryptocurrency landscape. Its transition from a solely meme coin to a community-led crypto project needs to be applauded. Dogecoin has extended its operation from just a crypto coin to a complete blockchain that overcome the drawbacks in Bitcoin and Litecoin blockchain networks.
The Dogecoin community uses DOGE and adds to its value in numerous ways. For instance, they pay internet tips and charities and make transactions and payments using the cost-effective Dogecoin (DOGE).
Thus, it continues to improve its market capitalization and manages to become one of the leading cryptocurrencies regardless of its low price. The DOGE future seems promising because of its vibrant community growing rapidly and introducing innovative solutions in the blockchain.
FAQs
Where can I trade Dogecoin?
Trading Dogecoin is similar to other cryptocurrencies. You will set up your account in any of the popular and high-volume exchanges, such as Binance, OKX, Bybit, etc. Then, you can trade or invest in Dogecoin for profits and rewards.
What Is Dogecoin Used for?
Dogecoin is a virtual currency that you can use for payments, online tipping, charity, and more. Various companies like Elon Musk’s SpaceX, the Dallas Mavericks, etc., accept DOGE as payments. Moreover, Dogecoin Swag enables you to buy T-shirts using Dogecoins.
Is it worth investing in Dogecoin?
Though the per-token cost of Dogecoin is way less for a high return on investment, its loyal and vibrant community of crypto enthusiasts helps DOGE sustain its position in the crypto market. Therefore, you can consider investing in it.
Is Dogecoin a real cryptocurrency?
DOGE is one of the cryptocurrencies in decentralized finance. It holds 8th rank in terms of market capitalization. However, it has limited utility unlike other altcoins, such as Ethereum, Polkadot, etc.
Does Dogecoin have a future?
DOGE future revolves around its utility and use cases. It must extend its operation from just a payment option to become a futuristic crypto project. However, it seems that Dogecoin has progressed in this pursuit.
