The history of Dogecoin is one of the most peculiar tales in all of finance.
Dogecoin was created in 2013 as a prank by two software developers, Billy Marcus and Jackson Palmer.
Motivated by a desire to “poke fun” at Bitcoin, its designers set out to build their own cryptocurrency. Bitcoin was not quite as dominant as a cryptocurrency back in 2013. Several individuals have pointed out that Bitcoin does not exist in the actual world, and have concluded that this means it has no value.
Several of these sceptics followed the meteoric development of Dogecoin with great enthusiasm since they were so assured of their own certainty. They didn't realise it at the time, but they were proving the premise upon which Bitcoin was built: that if enough people accept the ludicrous idea that a currency exists, then that money's value becomes real.
How to Buy Dogecoin: What is DOGE?
To begin, Dogecoin is a currency based on “proof of work”. This signifies that the value is generated via a computer program called a “blockchain”. It's a piece of software that monitors the current location of every Dogecoin in existence.
There are two strategies used in the real world to keep tabs on money: In the first place, there's the matter of fact. You may unlock the safe and prove to us that there is money inside. Nothing more nor less exists than what already is present.
Nonetheless, most financial dealings are conducted without the participants ever really seeing the money. Is there such a thing as that amount of money?
Maybe it does, but how can we be sure? Because the banks supposedly holding money have assured us of its existence. You go to the supermarket and pick up a chocolate bar. When your card has been swiped, the bank will notify the supermarket that they have received £3 as payment. You are transferring funds from your account to theirs.
When they make a purchase, the money leaves their account and is deposited into the account of the merchant. This never-ending loop will not be broken. Yet, this is dependent on banks, and banks are notoriously poor stewards of capital.
No Need for Banks
Imagine if the financial system was run by everyone who used it, rather than a select few who are now in charge. Dogecoin tries to achieve this goal.
Dogecoin's value comes from the individuals who use it, rather than the currency market or banking system since it is rooted in the blockchain. Yet, not everyone agrees that it's worthwhile. This is one reason why its value is lower than that of cryptocurrencies like Bitcoin.
Given its utility, the blockchain deserves our attention. Dogecoin uses the blockchain as proof of its existence, therefore receiving Dogecoin from another person also requires the blockchain's participation.
The deal may as well not have been made. It is possible for a con artist to promise to sell you Dogecoin but then disappear with your money without ever delivering the promised cryptocurrency. Therefore, what measures can be taken to stop this from happening? If you want to avoid being scammed while purchasing Dogecoin, what should you do?
How to Buy Dogecoin: Platforms
It's necessary to use a platform to purchase Dogecoin.
Trade platforms predate the advent of the internet. Traditional securities are often traded via these venues. You may think about stocks in this way. To put it another way, that's money from overseas. It, however, only included cryptocurrencies in the past few years. So, what exactly do these sites provide you that you can't obtain anywhere else?
Using a platform provides you with the most important benefit: safety. Trade infrastructure is a feature of platforms. It implies they can locate sellers of Dogecoin, communicate with and negotiate with those sellers, and naturally secure their transactions.
To “secure” a transaction, one must ensure that both parties benefit from the exchange. This prevents anyone from just grabbing the money and disappearing.
Which exchanges provide the most reliable venues to purchase Dogecoin? For the full list, have a read of our best crypto trading platforms. But we’ve also made a fast rundown below for DOGE:
1. Coinbase
Without mentioning Coinbase, it would be impossible to discuss Bitcoin exchanges. Coinbase is, without a doubt, the safest exchange to buy or sell cryptocurrencies. As one of the first crypto exchanges, it has had the most time to develop a substantial user base.
Apart from its active user base, it also offers excellent resources for anyone interested in learning more about Bitcoin. These may be used to mine cryptocurrencies that permit trading and to learn about trading cryptocurrencies.
2. eToro
When it comes to bitcoin trading, eToro is not the place to go. Despite this, it boasts one of the largest cryptocurrency marketplaces of any trading platform.
This implies that Dogecoin and a wide variety of other currencies are available, although this is not eToro's primary selling point.
The nicest thing about eToro is that after purchasing Dogecoin (or any other cryptocurrency), you can immediately exchange it for regular equities.
In other words, you may invest in Dogecoin, let your investment grow, and then invest in equities with the proceeds.
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
3. Binance
If you want to purchase doge, you should also check out Binance. Since it is built for Bitcoin, this exchange accepts even relatively obscure coins like Dogecoin.
Binance does this with its own coin (although sometimes called Binance Coin to differentiate the currency from the platform). This currency was designed to facilitate the exchange of otherwise incongruent monetary units.
To provide only one example: Let's pretend you've found someone to sell you Dogecoin, but they won't accept pounds.
Binance Coin is only good for making trades on the Binance exchange. That implies its cost remains relatively unchanged. So, you may exchange your pounds for Binance Coin and use it as a means of payment.
This is more likely to occur while shopping for non-Dogecoin items using Dogecoin. While Dogecoin is generally acknowledged, many crypto traders would rather have Binance Coin.
You Can Also Get Dogecoin Via Mining
Dogecoin may be purchased easily, but this is not the only method it is created. You have to understand that the blockchain is a complex mechanism since it monitors every single Dogecoin ever created. Yet because of its complexity, performance may be sluggish at times. Yet, its velocity may be increased with your assistance.
Mining Dogecoins
Here is how mining works: As part of the blockchain's transaction processing, significant mathematical problems must be solved.
Your contribution of any amount of processing power, however modest, will speed up the blockchain and increase its overall worth. Earn some Dogecoins by doing this.
The mining procedure necessitates the installation of a blockchain programme and the establishment of a network connection to a “wallet”, into which Dogecoins will be deposited when your device answers blockchain questions.
Over time, your wallet will gradually be credited with Dogecoin. When the gadget is “mining”, the file will continue to increase in size as long as it is on.
What Do You Need to Mine?
There are several cryptocurrencies that can be mined, but the necessary gear is what prevents most people from becoming involved. You can mine on practically anything — tablets, phones, laptops — but you will usually see people mine cryptocurrency on extremely high-end computers with good processors.
The highest-end mining hardware will cost you around £10,000. This is for hardware that allows you to mine multiple Dogecoins an hour. You can sell that Dogecoin and make back your money over time.
What are the Dangers of Dogecoin?
Since we're on the topic of mining, it's vital to point out a quirk in the way Dogecoin operates. You have to realise that most cryptocurrencies are artificially limited in supply. According to Bitcoin's creator, there are only 21,000,000 Bitcoins available for mining. The software finally ended after that.
The number of Dogecoins that can be mined has me curious. That's easy: There's no ceiling. This causes concern for some, to be sure.
The scarcity of Bitcoins contributes to the currency's value. In light of this, owning some, spending some, and even mining some is a good endeavour. A portion of the value of a Bitcoin will be lost once there are no more Bitcoins to be mined (though its scarcity will allow it to retain some of that value).
Dogecoin is unlimited in supply. In other words, enough Dogecoins to match the whole supply may be mined by a single person. It would cause the currency to hyperinflate. When people are handing out million-coin packages as a joke, what good are your five Dogecoins?
In any case, this is quite unlikely to occur. No one would gain from such an endeavour, and the work involved is prohibitive. Relax and enjoy the fact that Dogecoin's value has been increasing over time rather than speculating about its future. Unless, maybe, if you are attempting to make a gamble on the market.
How to Buy Dogecoin (2024) — Summary
Let's review everything we've learnt so far: To begin with, Dogecoin is a “proof of work” cryptocurrency, meaning that its existence and value are verified via the use of a blockchain.
To transact with confidence and guarantee that your deals will take place in real life and on the blockchain, you'll need a trading platform.
The value of Dogecoin, a cryptocurrency based on a joke, is real. The potential quantity is unbounded, while the actual quantity is finite. Together, this and the blockchain system ensure that it never becomes too inflated. Nonetheless, care should be taken while trading or mining it. What direction the market will go next is always a mystery.
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