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. Jackson Marker and Billy Markus founded it 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. When it was first introduced, one of the main objectives of Dogecoin 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 currency unit 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.
DOGE may be your answer whether you use cryptocurrencies for transacting, investments, or entertainment like crypto gambling. Read more as we explore how to sell and buy Dogecoin.
Dogecoin and Litecoin
DOGE’s framework is based on Litecoin, and Dogecoin mirrors any amendments and updates to Litecoin. Litecoin miners can mine Dogecoin using Auxiliary Proof of Work (POW). This enables Litecoin miners to process Dogecoin transactions through their computing power, which allows them to solve complicated equations.
The Dogecoin blockchain uses Scrypt Technology instead of SHA 256, which Bitcoin uses. With this technology, once the equation has been solved, a new block can be added to the Dogecoin network, and the miner receives Dogecoin.
The reward system is two-fold, as it encourages miners to channel their computing power to complete transactions on the blockchain. Additionally, it serves to regulate the creation of the new Dogecoin that these miners subsequently distribute.
What’s Unique About The Currency?
Dogecoin is unique from other cryptos because it is an inflationary currency. Bitcoin and other cryptocurrencies 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 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. Using an inflation-based approach, it seeks to replace lost coins all the time and keep the currency stable with 100 billion coins in circulation.
Its blockchain employs a difficult algorithm that makes it unprofitable for miners to join mining pools to mine for Dogecoin. This security element 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 it 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 depends on the market behaviour 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 can own the currency. It is estimated that over 5.2 billion coins are added yearly, 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 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 your 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 instantly, you will execute a market order. This merely entails specifying the number of coins 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 fulfil it.
You must ensure 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 anticipated. This may result in the purchase price being remarkably higher than the last traded price. This is true, especially when liquidity and market volatility are high.
Buying Dogecoin In 3 Steps
- Get A Wallet
In terms of Dogecoin wallets, plenty of exciting options are 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 available and require an initial investment. It is regarded as one of the safest because it can 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 and 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.
MultiDoge, a Doge-specific desktop wallet available for Linux, Mac, and Windows, is among the many popular options among users.
Coinomi is another good option 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 can access the official Dogecoin Mobile Wallet, which is unavailable for iOS. Both Android and iOS have Coinomi available as mobile wallets for Dogecoin.
2. Find a Doge Exchange
A limited number of vetted exchanges 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 note that using the platform can cost a lot in fees, especially if you purchase Dogecoin with your credit card.
You can buy DOGE through Kraken, which 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 also enables you to buy Dogecoin. It operates similarly to Kraken and offers Dogecoin and Bitcoin trading pairs. Essentially, you will need to either buy or deposit BTC to exchange it for DOGE.
While it is impossible 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.
However, there is a roundabout way to circumvent this restriction, as you can use LocalBitcoins, which allows users to buy bitcoin through PayPal. Once this is done, you can 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 reduce the risk associated with it being stolen or lost.
Always remember to withdraw the Dogecoin 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
To sell Dogecoin, you must select either a Limit Order or a Market Order.
To sell using a limit order, you must specify the quantity of currency you wish to sell and the price per token you are willing to accept for sale. The closer your sell price is to the price of the highest bid will provide the 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 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 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 interest from an audience 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 into the network and 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 recognise 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. It is often observed handing out small coins to newcomers to encourage them to embrace and better understand 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!