Looking to invest and buy dogecoin? Dogecoin, commonly known as DOGE, is one of many digital coins that has risen in popularity in the world of crypto. It was founded by Jackson Marker and Billy Markus in December 2013 as an open-source cryptocurrency.
Originally, it was planned to limit DOGE to 100 billion coins but a later decision was made to offer a limitless supply. It was created to provide a simple and efficient currency to trade in and like other cryptocurrencies, can be held as an investment or traded for profitable returns.
One of the main objectives of Dogecoin, when it was first introduced, was to create a cryptocurrency that was easy-to-use and more accessible than the dominant Bitcoin. It was intended to have a very large supply so that each unit of the currency would always have a low price.
Another objective was for Dogecoin to be used as an online currency for tipping. This proved popular on platforms such as Reddit and YouTube where tips were left for comments or videos respectively.
Whether you use cryptocurrencies for transacting, investments, or entertainment like crypto gambling, DOGE may be your answer. Read more as we explore the details on how to sell and buy Dogecoin.
Dogecoin and Litecoin
DOGE’s framework is based on Litecoin, and any amendments and updates to Litecoin are also mirrored by Dogecoin. Litecoin miners have the ability to mine Dogecoin by using Auxiliary Proof of Work (POW). This enables Litecoin miners to process Dogecoin transactions through their computing power that allows them to solve complicated equations.
The Dogecoin blockchain uses Scrypt Technology as opposed to SHA 256 that is used by Bitcoin. With this technology, once the equation has been solved, a new block can be added to the Dogecoin network and that miner is then rewarded with Dogecoin.
The reward system is two-fold as it encourages miners to channel their computing power in an effort to complete transactions on the blockchain. Additionally, it serves to regulate the creation of the new Dogecoin that is subsequently distributed by these miners.
What’s Unique About The Currency?
Dogecoin is unique from most other cryptocurrencies in the sense that it is an inflationary cryptocurrency as opposed to a deflationary one. In terms of Bitcoin and other cryptocurrencies, they are created with a firm supply cap of coins that could pose potential problems down the line.
This is because once the coin cap reaches its peak, it may no longer be profitable for miners to sustain the ecosystem. This could lead to disproportionately high fees in an attempt to encourage miners to work.
Moreover, it could lead to extremely long transaction times as no incentives to process network transactions would exist.
With Dogecoin’s limitless supply, miners are always rewarded with new DOGE and there is always an incentive to mine more coins. By using an inflation-based approach, it seeks to replace lost coins all the time and keep the currency at a stable of 100 billion coins in circulation.
Its blockchain employs a difficulty algorithm that makes it unprofitable for miners to join as mining pools to mine for Dogecoin. This element of security acts as a safeguard against any attacks on the network, like other cryptocurrency blockchains have experienced.
Transaction fees are typically lower on Dogecoin when compared to other cryptocurrencies. This is due to the low value of individual tokens, and usually costs less than a cent to transact. Furthermore, transaction times and confirmations are exceptionally quick.
Investing In DOGE
If you are considering an investment in the currency, note that it’s not easy to predict the level of value that your investment will bring. As DOGE is a replica of Litecoin, its price is dependent on the market behavior that experts find difficult to forecast. While Litecoin has a block time of two and a half minutes, DOGE produces blocks once a minute.
This incredibly short block time makes DOGE more accessible than cryptos like Bitcoin. This is an incentive for those hoping to invest as more people have the ability to own the currency. It is estimated that over 5.2 billion coins are added every year, inflating the market. This, in turn, leads to a reduction in the value of the cryptocurrency.
How To Buy Dogecoin
To buy Dogecoin, you must own a cryptocurrency wallet. You can choose either a mobile, hardware, or desktop wallet.
Once you have a wallet, you can start looking for peers who are selling their DOGE. You can also use exchanges such as Binance, Poloniex, Bittrex, and Kraken to find sellers.
When buying from an exchange, there are typically two types of orders that traders can select. These are Limit Orders and Market Orders.
When attempting to buy limit orders, it is important to specify the quantity of Dogecoin that you want to buy and the price per token that you would like to pay. If the price that you offer is closer to the lowest asking price, the more chances you have for your buy order to be fulfilled.
In cases where you would like your order to be filled in an instant, you will execute a market order. This merely entails specifying the amount of coin that you would like to buy. Once the buy market order has been executed, you will pay the lowest asking price that appears in the order book to fulfill it.
You must ensure that you have sufficient cryptocurrency in your balance to cover your purchases. Always be wary when using the market order option as the bid-ask spread might be wider than you anticipated. This may result in the actual purchase price being remarkably higher than the last traded price. This is true, especially in circumstances where liquidity is low and market volatility is high.
Buying Dogecoin In 3 Steps
1. Get A Wallet
In terms of Dogecoin wallets, there are plenty of exciting options available for you. There are different varieties of wallets that you can consider, and each type varies with its features, security, and usability.
Hardware wallets are one of the safest types of wallets available and require an initial investment. It is regarded as one of the safest because it has the ability to keep the private key to your currency offline on a physical device. Many users opt for hardware wallets such as Ledger Nano S and Nano X that support Dogecoin as well as many other crypto assets.
Desktop wallets store the private key to your Dogecoin on your hard drive. There is a possibility of this wallet being vulnerable to malware. You must actively take precautions and should only download official or recommended desktop wallets.
Of the many popular options amongst users is MultiDoge, which is a Doge-specific desktop wallet that is available for Linux, Mac, and Windows.
Coinomi is another good option that is also available on the above-mentioned operating systems. Seasoned traders opt for Hardcore Dogecoiners, but this is not recommended for beginners.
Finally, mobile wallets are available on iOS and Android devices and enable you to check your currency balance instantly. For Androids, you have access to the official Dogecoin Mobile Wallet as this is not available for iOS. Both Android and iOS have Coinomi available as mobile wallets for Dogecoin.
2. Find a Doge Exchange
There are a limited number of vetted exchanges that supply a Dogecoin and Bitcoin option.
Changelly is one of the platforms that will enable you to purchase Dogecoin with any fiat or cryptocurrency. Changelly is a conversion service that operates very quickly and only requires an email to sign up. You must take note that using the platform can cost a lot in fees, especially if you choose to purchase Dogecoin with your credit card.
You can buy DOGE through Kraken that includes a Dogecoin and Bitcoin trading pair. With this platform, you will need to either deposit or buy bitcoin with a fiat currency before exchanging it for DOGE.
Kraken offers a fantastic variety of deposit methods. Moreover, European users can take advantage of fast and free SEPA deposits.
Bittrex is a US-based cryptocurrency exchange that enables you to buy Dogecoin as well. It operates similar to Kraken and offers a trading pair of Dogecoin and Bitcoin. Essentially, this means that you will need to either buy or deposit BTC to exchange it for DOGE.
While it is not possible to buy Dogecoin with a credit or debit card directly, you may purchase another cryptocurrency through your card and then trade it through an appropriate exchange such as Changelly.
In terms of web wallets, there are very limited options for cryptocurrency exchanges that accept Paypal, for example. In light of this, there is, unfortunately, no option to buy Dogecoin through your Paypal account.
There is a roundabout way to circumvent this restriction, however, as you can use LocalBitcoins that allows users to buy bitcoin through PayPal. Once this is done, you have the option to transfer that bitcoin to a suitable exchange and then trade it.
Dogecoin is accepted by many instant exchange services such as Shapeshift and Flyp.me. Due to its integration with Shapeshift, it can be used to pay for a range of products and services that have the Shapeshift API built-in.
3. Withdraw Your Dogecoin
It is recommended to store your crypto in a wallet as opposed to an exchange. This helps to reduce the element of risk associated with it being stolen or lost.
Always remember to withdraw your Dogecoin that you purchased on the exchange into your wallet. If you do choose to keep them on the exchange, you are putting yourself at risk. If the exchange happens to go bankrupt or gets hacked, you could lose your currency without any recourse or recovery.
How To Sell Dogecoin
In order to sell Dogecoin, you will need to select either a Limit Order or a Market Order.
To sell using a limit order, you must specify the quantity of currency that you wish to sell and the price per token that you are willing to accept for the sale. The closer that your sell price is to the price of the highest bid will provide a greater opportunity for your sell order to be fulfilled.
In terms of a market order, when you execute a sell market order, you will sell the amount of Dogecoin tokens that you initially indicated at the highest bidding price in the order books. With this type, the sell order will be filled immediately. Always exercise caution when using market orders as the actual price that you receive may be remarkably lower when compared to the last traded price. This can be attributed to high market volatility with low liquidity.
The Bottom Line
Dogecoin is an established cryptocurrency that has enjoyed steady growth since its introduction. It has proved that creating a solid digital currency means cultivating an interest from an audience that is willing to come on board. While some cryptocurrency blockchains are slow to evolve, DOGE’s team of developers are proactively working to transform the currency to the next level.
With developments such as alpha upgrades, they hope to integrate merchants in the network and hope to forge it into the global market. While critics may have been quick to brush the currency away upon its introduction, many have no option but to recognize it for its resilience and ability to operate efficiently alongside the more common currencies such as Bitcoin and Ethereum.
The Dogecoin community is very welcoming to new users and are often observed handing out small amounts of coin to newcomers in an attempt to encourage them to embrace and better understand the cryptocurrency.
Although Dogecoin does not have significant advantages over the more popular cryptos, it is clear from its trajectory that it is here for the long haul!