Thinking about investing in Dogecoin (DOGE)? Find a comprehensive guide on Dogecoin (DOGE), how it ranks in the cryptocurrency world, and whether or not it's a sound investment.
- Price$ 0.165684
- Marketcap$ 21.99 B
Since Dogecoin’s inception as a joke in 2013 and eventual rise in the cryptocurrency market, many individuals are begging the question: does Dogecoin (DOGE) live up to the hype?
And more importantly, is it a wise and viable investment?
After the unexpected surge of Bitcoin in late 2020, more and more cryptocurrency users have been looking for the next big thing in blockchain, likely to rise in value.
But how can you tell whether or not a particular cryptocurrency is worth the investment?
In this article, we'll go over all things Dogecoin, from how it came to prominence, how it's being mined, what you can do with it, and the likelihood of its value going up.
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What is Dogecoin (DOGE)?
Dogecoin is a peer-to-peer, open-source cryptocurrency. “Open-source” here meaning its coding is freely available for the public to view, edit, and redistribute.
As an altcoin, with stark similarities to Bitcoin, Dogecoin is said to have been created as a joke. But this hasn't stopped it from gaining merit as a blockchain. Sporting an image of a Shiba Inu dog as its logo, its underlying technology comes from Litecoin, the “lite” version of Bitcoin.
By late 2017, Dogecoin became a major player in the cryptocurrency world and was among the few that increased in value. While its value plummeted in 2018, it still has quite a few supporters that use it for trade or tipping content on social media sites like Reddit and Twitter.
How Do You “Mine” Dogecoin?
The process of "mining" cryptocurrency involves adding new blocks that contain pending transactions to a blockchain ledger using specialized computer systems. Miners can be individuals or organizations.
Miners essentially use their computer systems to create a fixed-length code or “hash” that holds a value equal to or lower than that of the new block – this is known as the “target hash.”
Coming up with the winning code grants you exclusive rights to add new transaction data to the next block. It’s basically a lot of trial and error to get to this point.
Before Dogecoin's increase in value, mining was less challenging as very few people existed in its network, allowing everyone to mine the crypto individually.
As its popularity went on the rise and mining became more challenging, miners came together to form groups called "mining pools."
This allowed pool participants to share the rewards proportionally based on individual computer power. Aside from individual mining and mining pools, the third method of mining Dogecoin is cloud mining.
Cloud mining isn't exactly mining in the traditional sense but is just as effective. It involves renting computing power from a data center that is contributed to a mining pool. Your rewards will depend on how much computer power you pay for.
Because cloud mining involves a contractual agreement, you don't have the ability to withdraw should the DOGE prices drop, which proves to be a significant drawback.
What Can Dogecoin Be Used for?
The first step to figuring out what exactly Dogecoin is useful for is finding a place to actually buy the currency. By now, most crypto exchange apps like Binance, Kraken, and Coinbase support Dogecoin, among other currencies.
Once you have tokens in your wallet, you have the option of spending them.
After MasterCard launched their first-ever prepaid crypto card in a partnership with BitPay, paying with crypto became slightly easier.
You start by funding your BitPay wallet with any supported cryptocurrency, which allows you to spend the balance directly from MasterCard. BitPay is also supported by Apple Wallet, allowing you to use your Dogecoin tokens through ApplePay.
This is great news if you're in the United States. But unfortunately, as of now, no other country supports BitPay. If you're in Europe or Asia, you have the option of using Wirex or Binance; however, neither of these currently support Dogecoin specifically.
In fact, it's still quite difficult to find any major online payment systems that support Dogecoin, from PayPal to Venmo to CashApp.
Should I Invest in Dogecoin?
As we speculated earlier, the burning question on everyone's minds remains: Should I invest in Dogecoin? The answer isn't quite that simple and varies depending on who you ask.
Dogecoin has come a long way since its frivolous emergence. However, the numbers aren’t necessarily reflecting as such. Similarly to Bitcoin, it can be hard to tell where the value might go next. (Since Bitcoin’s surge in late 2020, it has since seen quite a dip).
The harsh truth is that investing in any cryptocurrency is a serious gamble that takes an immense amount of research and understanding of the world it exists in.
That being said, taking the time to do this research will likely greatly benefit you for the future as the world gets closer and closer to making cryptocurrency a legal tender.
It's important to look at investing in cryptocurrencies like Dogecoin as less about making money and more about being a part of something huge that will change the way we view money as a concept.
Crypto isn't backed by any of the banks, governments, or institutions we've all grown accustomed to.
So, even if you're one of the most tech-savvy investors, you'll likely want to throw out everything you think you know about investing if you plan to walk this line. Otherwise, you might be better off sticking with your ETFs.
With the volatility of cryptocurrencies like Dogecoin, not to mention the difficulty in which you can actually use it to buy things, investing in it won't be for the faint of heart.
That being said, if you're down with the cause, eager to take a risk, and have some money burning a hole in your pocket, Dogecoin may still have a fighting chance to see an unexpected surge in the not too distant future.
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I’m Donny. I’m a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.