The Hustler's Digest StaffWant to invest in Dogecoin but not sure how to go about it? Read this article for a complete overview of Dogecoin and how to invest in it.
Dogecoin (DOGE) is an open-source, peer-to-peer cryptocurrency. It is regarded as an altcoin and a sarcastic meme coin. Dogecoin was launched in December 2013 and featured the image of a Shiba Inu dog as its logo. While it appears to have been created as a joke, Dogecoin’s blockchain has merit.
Celebrity endorsements and testimonials from Elon Musk, Mark Cuban, and rapper Lil Yachty have significantly increased Dogecoin’s popularity. However, following Musk’s statement that the “popularity of Dogecoin was a hustle,” there was a brief dip in its popularity; Which demonstrates that Dogecoin is here to stay. Read this article to know how Dogecoin came and invested in Dogecoin.
What Is Dogecoin?
In 2013, Dogecoin (DOGE) was created as a fun alternative to traditional cryptocurrencies such as Bitcoin. A meme-inspired the name and Shiba Inu logo. Dogecoin is plentiful, with 10,000 new coins mined every minute and no maximum supply; conversely, Bitcoin was designed to be scarce.
For most of its existence, Dogecoin was regarded as an amusing “meme coin” beloved by its community — but with little monetary value. That changed in 2021: as of April, Dogecoin was one of the top ten cryptocurrencies by market cap, with a total value that surpassed $50 billion even though each coin is worth pennies.
How is this even possible? Because there is so much Dogecoin in the world. In contrast to Bitcoin, which was designed to be scarce and resistant to inflation, Dogecoin was created to be abundant. Approximately 130 billion DOGE in circulation, miners produced 10,000 DOGE every minute. (By contrast, there are about 19 million bitcoins, and only 12.5 BTC are mined every ten minutes or so.)
Dogecoin (“dohj coin”) was created as a lighthearted, low-stakes Bitcoin alternative. DOGE quickly drew an enthusiastic online community, which has used it for everything from tipping strangers for good Reddit comments to helping send the Jamaican bobsled team to the 2014 Winter Olympics in Sochi.
Understanding Dogecoin
Dogecoin began as a joke, but it grew in popularity after its creation. By late 2017, it had become a participant in the cryptocurrency bubble, which had caused the values of many coins to skyrocket. 1 Dogecoin’s value plummeted after the bubble burst in 2018, but it retains a core of supporters who trade it and use it to tip for content on Twitter and Reddit. Dogecoin can be purchased and sold on digital currency exchanges. They have the option of storing their Dogecoin on a business or in a Dogecoin wallet.
The history of Dogecoin
In the beginning
Jackson Palmer, a product manager at Adobe Inc.’s Sydney, Australia, office, created Dogecoin in 2013 to mock cryptocurrencies’ hype. Palmer has been described as a “skeptic-analytic” observer of emerging technology, and his first tweets about his new cryptocurrency venture were sarcastic. However, after receiving positive feedback on social media, he purchased the domain dogecoin.com.
Meanwhile, in Portland, Oregon, Billy Markus, an IBM software developer who wanted to create a digital currency but had difficulty promoting his efforts, discovered the Dogecoin buzz. Markus contacted Palmer to develop the software to power an actual Dogecoin.
Markus based Dogecoin’s code on Luckycoin, derived from Litecoin, and used a randomized reward for block mining at first, but this was changed to a static reward in March 2014. Dogecoin is a Proof-of-Work (PoW) coin that employs Litecoin’s scrypt technology.
Proof of Work (PoW) is the underlying technology in many cryptocurrencies, allowing for secure, decentralized consensus.
On December 6, 2013, Palmer and Markus launched the coin. Two weeks later, on December 19, the value of Dogecoin increased by 300 percent, po ssibly as a result of China prohibiting its banks from investing in cryptocurrency.
The rise of Dogecoin
Dogecoin advertised itself as a “fun” version of Bitcoin, complete with a Shibu Inu (Japanese dog) logo. The informal presentation of Dogecoin suited the mood of the burgeoning crypto community. Its scrypt technology and limitless supply argued for a faster, more adaptable, and user-friendly version of Bitcoin.
Dogecoin is an “inflationary coin,” whereas cryptocurrencies such as Bitcoin are deflationary due to a cap on the number of coins that can be created. Every four years, the amount of Bitcoin is halved and released into circulation through mining rewards, as is the inflation rate, until all coins are released.
The Dogecoin community donated 27 million Dogecoins (approximately $30,000) in January 2014 to fund the Jamaican bobsled team’s trip to the Sochi Winter Olympics. In March of that year, the Dogecoin community donated $11,000 to help build a well in Kenya and $55,000 to help sponsor NASCAR driver Josh Wise. Dogecoin had a market capitalization of $20 million and a devoted fan base when it turned one.
Controversy takes some fun from Dogecoin.
Dogecoin’s freewheeling fun began to fade in 2015, as the crypto community, in general, became more serious. The departure of Jackson Palmer, who claimed that a “toxic community” had grown up around the coin and the money it was producing, was the first sign that all was not well with the Dogecoin community.
Alex Green, a.k.a. Ryan Kennedy, a British citizen who founded the Dogecoin exchange Moolah, was a member of that toxic community. Alex Green (his alias) was known in the community as a lavish tipper who allegedly gave the NASCAR fundraiser $15,000 instead of $1,500.
Green’s exchange persuaded community members to donate large sums to help fund the creation of his exchange. He used the donations to purchase more than $1.5 million in Bitcoin, which he used to support his lavish lifestyle.
Dogecoin during and after the crypto bubble of 2017-2019
The cryptoverse value rose during the end of 207, along with Dogecoin’s value, albeit that it fell in 2018. During the 2017/18 crypto bull run, Dogecoin’s market capitalization surpassed $1 billion for the first time.
Dogecoin’s value increased again in the summer of 2019, along with the rest of the crypto market. Dogecoin supporters rejoiced when the cryptocurrency exchange Binance listed the coin, and many believed Tesla, Inc. (TSLA) CEO Elon Musk endorsed the currency in a cryptic tweet.
Dogecoin in the 2020s
The infrastructure of Dogecoin has not been a priority for the coin’s developers, who are all volunteers. The active community of miners is one of the reasons Dogecoin continues to operate and trade. As CryptoIQ’s Zachary Mashiach puts it:
Many Scrypt miners prefer dogecoin (DOGE) over other Scrypt PoW cryptocurrencies. The hash rate of Dogecoin (DOGE) is approximately 150 TH/s. This is slightly lower than the Litecoin (LTC) hash rate of 170 TH/s, most likely because Dogecoin (DOGE) can be merged with Litecoin (LTC), allowing miners to mine both cryptos at the same time. Essentially, almost everyone who mines Litecoin (LTC) also mines Dogecoin (DOGE) because mining Dogecoin (DOGE) together increases profits.
Musk publicly stated his support for Dogecoin in 2021, tweeting in May that he was working with the coin’s developers to improve transaction efficiency. Earlier this year, the SpaceX founder even conducted a social media poll to determine whether Tesla should accept Dogecoin as payment. In October, AMC Entertainment Holdings, Inc. (AMC) announced that it would accept Dogecoin for digital gift card purchases by the end of the year, giving the meme-based cryptocurrency even more utility.
Dogecoin’s market cap ranking was number 10 as of Oct. 8, 2021, with a market capitalization of $31.9 billion, significantly higher than its year-ago position of 48 and $339 million market value.
What makes Dogecoin valuable?
Like any other asset, the market values DOGE based on supply and demand. Given the vast and ever-increasing supply, demand has had to skyrocket to drive prices as high as they have recently.
That happened in the first months of 2021, when prices soared around 7,000 percent, thanks to retail investors on Reddit (including the wall street bets Reddit that sparked the “meme stock” craze) working together to push prices up, the broader crypto boom, and months of seemingly tongue-in-cheek tweets from Tesla founder Elon Musk, punctuated by his appearance on Saturday Night Live in May 2021.
Fast-rising DOGE prices in 2021 drew significant media attention (as well as social media posts), creating a cycle that attracted more investors and increased costs for a time when an asset experience such dramatic gains, FOMO (or “fear of missing out”) drew a flood of new traders.
DOGE remains a highly volatile cryptocurrency, and as with any investment, there is no guarantee that it will rise or fall in value in the future.
How to Buy Dogecoin
Open an online account.
The first step in purchasing Dogecoin is to sign up for an account with a cryptocurrency exchange that accepts DOGE. Traders can buy dogecoin from Coinbase, eToro, Robinhood, Gemini, SoFi, and Webull.
SoFi is an excellent choice for several reasons. Investors who sign up for SoFi will receive free bitcoin for a limited time, allowing you to gain exposure to cryptocurrency without putting your own money at risk. SoFi also allows investors to buy and sell other assets, such as initial public offerings (IPOs) and exchange-traded funds (ETFs).
Fund account & make your purchase.
After you have opened your wallet and exchange account, you can place a buy order to purchase DOGE. To begin, open your exchange’s trading platform and check the current price of DOGE. Though cryptocurrency prices fluctuate, you can expect to pay close to the market rate — you may want to monitor the price of DOGE and how it moves to ensure that you don’t overpay for your coins.
The best exchanges will provide you with various order types to choose from. If you’ve ever traded stocks, you’re probably already familiar with the fundamental types of orders. Before investing, if you haven’t already, familiarize yourself with the most common order types. Select an order type and determine how much DOGE you want to purchase based on your available funds and the current market price.
Your broker will then take care of filling your order on your behalf. When you see DOGE in your exchange wallet, it means your order was completed. If your broker cannot load your order as specified, they may cancel it at the end of the trading day.
Buy a wallet (optional)
A cryptocurrency wallet gives you a set of keys that you can use to store your DOGE away from an exchange. This helps protect your investment if your exchange targets a hack or theft.
Robinhood does not allow users to send or receive assets to another wallet. Use a wallet that will enable you to control your private key to keep your cryptocurrency. Coinbase, eToro, and Gemini allow users to send and receive funds from their exchange wallets. Use a wallet that will enable you to manage your private key for maximum security.
There are two significant cryptocurrency wallets: hot software wallets and cold hardware storage wallets. Software wallets are free, but they must be connected to the internet to access your investments—hardware wallets, which can cost up to $50, store your coins offline for maximum security. When deciding how to keep your DOGE, consider our favorite software and hardware wallets.
Best crypto wallets for Dogecoin
While most significant exchanges are highly secure, the best way to store cryptocurrency is in a cryptocurrency wallet. This is especially true if you intend to hold cryptocurrencies for an extended period. Because centralized exchanges have custody of investors’ funds, you may lose all of your investments if the trade suffers a security breach.
Some exchanges, such as Coinbase, store most of your cryptocurrency in a hardware wallet, making it highly secure. However, you must keep it in your wallet to truly own your cryptocurrency.
Best hardware wallet: Ellipal Titan
The Ellipal Titan is a multicurrency wallet that accepts DOGE, Bitcoin, Ethereum, and over 7,000 other digital currencies. The Ellipal Titan has a large touchscreen that allows you to track your holdings without connecting to Wi-Fi. Online hackers cannot steal your assets because the wallet is not connected to the internet. You can use the device’s QR to send crypto in a matter of seconds to transfer your coins to your wallet.
The Ellipal Titan is an excellent choice for cryptocurrency investors, thanks to its simple, streamlined interface and simple setup process.
Because it has several premium features that improve user experience, the Ellipal Titan usually costs more than other cryptocurrency wallets. On the other hand, the hardware wallet is currently on sale, so you can save $30 on your Ellipal right now.
Best software wallet: Dogecoin Wallet
The entertaining and friendly internet currency also has a simple, user-friendly wallet option for desktop and mobile. It takes about 5 minutes to get started with the Dogecoin Wallet. Simply go online and search for DOGE. You can also download the Dogecoin Wallet for your operating system, install it, and begin safely storing your e on the Google Play store.
Trade or sell your cryptocurrency
After you see your DOGE in your exchange wallet, you will now need to decide how you want to earn a return on your investment. There are two primary strategies you can take:
- Long-term holding: Investors who believe the price of Dogecoin will rise in the future may hold it for months or even years. Not to mention, you should transfer your Doge to your wallet lest you want to keep your investment safe.
- Short-term scalping: Short-term investors profit from small price movements by buying and selling DOGE when the price is favorable.
If you plan on becoming a short-term investor, it’s essential to have access to a reliable and fast-executing trading platform.
BlockFi: leverage your crypto and earn Interest
Cryptocurrency investors are constantly looking for ways to reduce their tax bills, particularly in the United States, where capital gains taxes may soon double due to a recently proposed bill. BlockFi is the best way to use your cryptocurrency profits without realizing them and paying capital gains taxes.
BlockFi provides loans without approval by requiring cryptocurrencies such as Bitcoin as collateral. You will be able to reclaim your cryptocurrency as long as you repay the loan. This is ideal for crypto holders who are confident in the performance of their token of choice because they can use the loan funds while maintaining the desired exposure.
Some BlockFi users use the loan to buy more cryptocurrency to increase the leverage on their position, though this can be risky for volatile assets. Users with a lower risk tolerance on BlockFi may instead choose to keep their holdings in BlockFi’s high interest-bearing accounts, where they can earn 5% to 10% interest. If any of BlockFi’s services appeal to you, check them out and create an account to begin earning!
Pionex: auto-trade your crypto assets
Pionex is a one-of-a-kind auto-trading app that helps you manage your crypto assets when you don’t have time or want to generate passive income with minimal effort. Signing up for an account and getting started is completely free. You can choose from one of Phoenix’s 18 trading bots; you only pay 0.05 percent maker and taker fees, and the bots handle everything else.
The trading bot selection includes:
- Grid Trading Bot allows users to buy low and sell high in a specific price range.
- Leveraged Grid Bot provides up to 5x leverage.
- Spot-Futures Arbitrage bot helps retail investors to make passive income with low risk. The estimated return for this strategy is 15~50% APR.
- Martingale bot performs DCA buy, one-time sell to capture fluctuation profit.
- The rebalancing bot helps you to hold the coins.
- Dollar-Cost Averaging (DCA) Bot Sets repeated purchasing at regular intervals to offset the effects of volatility.
Furthermore, the Smart Trade terminal allows traders to set stop-loss, take-profit, and trailing stops in a single trade. The best part about this app is that you can connect to your exchange, invest in Dogecoin, and decide whether you want to hold, make a quick profit, or generate passive income. If you prefer, you can also trade manually.
The Market Maker program is available to investors with accounts worth more than $300,000 per year. You never pay maker fees with the Market Maker program, but your taker fees remain at 0.5 percent. The Pionex app is compelling, user-friendly, and allows you to manage your assets while on the go.
Will Dogecoin survive over the long term?
The most crucial factor to consider with any investment is whether or not it is likely to experience long-term growth. Long-term investments are more likely to recover from downturns and maintain a competitive edge in their industry. In general, cryptocurrencies are still highly speculative. In other words, no one knows for sure whether they will still exist in a few years or decades. On the other hand, Dogecoin is especially risky because it lacks the utility of its competitors.
Any cryptocurrency that wants to go mainstream must have some sort of real-world application. Bitcoin is the most widely used cryptocurrency, and merchants are most willing to accept it. This gives it a significant advantage because widespread adoption is critical to the success of any cryptocurrency.
Ethereum also has real-world utility through its blockchain technology. The Ethereum blockchain is not only host to its native token, Ether, but it’s also the network used by non-fungible tokens (NFTs), decentralized finance, and thousands of other applications. Ethereum technology has the potential to revolutionize a variety of industries, and if it succeeds, its cryptocurrency, Ether, has a good chance of thriving as well.
Dogecoin, on the other hand, has very little utility right now. The few merchants that do accept crypto are more likely to buy Bitcoin than Dogecoin, and Dogecoin doesn’t have any significant advantages over its competitors.
Conclusion
After reading this article, you should understand what Dogecoin is and how you can invest in it. If you had invested $1,000 in Dogecoin on January 1, 2021, you would now have approximately $85,000 in your possession. Because cryptocurrency has historically been so volatile, it’s anyone’s guess how far the price will rise. If you’re lucky, you might be able to make some money by investing today. It is important to remember that Dogecoin is not an excellent long-term investment. So, if you choose to invest, consider it a fun experiment.
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