(Photo by Yuriko Nakao/Getty Images)
Dogecoin is a type of cryptocurrency, just like Bitcoin. However, there are some notable differences. Dogecoin was created as a lighthearted joke by cryptocurrency enthusiasts and was named after a popular meme. We can agree that Dogecoin has a very unusual origin, but this cryptocurrency has since increased in popularity, especially in the media. Dogecoin’s currently the fifth largest cryptocurrency by market cap.
What is Dogecoin and is it Legit?
According to reports dogecoin was originally created by Billy Marcus and Jackson Palmer, two software engineers, who branded the cryptocurrency’s logo using a popular meme. The currency first appeared in 2013 and has since risen in popularity. “Doge” was deliberately misspelled to describe a Shiba Inu dog. The name was originally meant as a joke aimed at cryptocurrency enthusiasts. Now, in early 2021, dogecoin has gained ‘cult’ status on Reddit’s WallStreetBets message board. It’s value is increasing and according to reports the cryptocurrency has now gained over 5,000% in 2021. This boost can largely be attributed to Tesla CEO Elon Musk, who has publicly named dogecoin as the ‘people’s currency’. Some reports even indicate that dogecoin might be Musk’s favorite cryptocurrency.
How Does it Work?
As mentioned before, dogecoin is a cryptocurrency and runs on blockchain technology. Bitcoin and Ethereum run on blockchain technology too. Blockchain distribution happens through a secure digital ledge that is able to store all transactions made using decentralized digital currencies. All cryptocurrency holders are able to carry an identical copy of the blockchain ledger, in this case a dogecoin blockchain ledge. This ledger is frequently updated and holds all new and old transactions. Dogecoin’s blockchain network makes use of cryptography to keep all transactions secure. In this way, it is very similar to Bitcoin and Ethereum.
Just like Bitcoin, miners use computers to solve complicated mathematical formulas. This must be done in order to process transactions and record them on the dogecoin blockchain. Miners who process transactions and in this way support the blockchain ledger, earn additional dogecoin. They can decide to sell or hold their dogecoin on the open market. Dogecoin can be used for payments and purchases, of course not all retail outlets are cryptocurrency-friendly yet, but where it is permitted, purchasing is allowed.
Is Dogecoin the Same as Bitcoin?
Dogecoin shares a few similarities with Bitcoin, but they do differ significantly too. Dogecoin is quicker and easier for miners to acquire. This makes dogecoin a more efficient cryptocurrency when it comes to processing transactions. According to reports it takes about 10 minutes for the process to ratify new blocks on the Bitcoin blockchain, however, it only takes one minute for the dogecoin blockchain. This is, of course, just speculation at the moment.
There is no lifetime cap on the number of dogecoins that can be created. But Bitcoin has a maximum limit to the number of coins that can be created. This means that bitcoin miners must work harder over a longer period of time to earn new Bitcoin. This is not entirely a bad thing, in fact this has helped bitcoin increase its value and hold it over time.
