Bitcoin may be the most well-known cryptocurrency, but over the years, hundreds of other digital currencies have come onto the market. It can be hard to keep track of all of them, but some have stood out, like Dogecoin, the world’s first meme coin. One might wonder how a coin based on a meme could be a good investment, but Dogecoin has done just that and done it quite well.
If you’ve been thinking about buying Dogecoin, this guide might be helpful.
What’s Dogecoin?
Dogecoin (DOGE) began as a joke on the Internet. In 2012, a software engineer at Adobe named Jackson Palmer came up with the idea for the coin as a joke about the popularity of cryptocurrencies. Palmer named the coin after a popular meme with a Shiba Inu dog, bought the domain name, and set up a website. Billy Markus, an IBM software developer who had never met Palmer, found the website and contacted him. Over the next few months, he made the protocol for the coin based on Litecoin, another cryptocurrency.
Dogecoin went live in December 2013 and quickly became a huge success. When China told its banks they couldn’t invest in Bitcoin a few weeks after Dogecoin came out, the price of the meme coin went up by almost 300 percent. Dogecoin’s value went up and down with the rest of the cryptocurrency world over the years. Dogecoin’s value went up in 2019 when it was added to the cryptocurrency exchange Binance. It went up again in 2021 when it seemed like Elon Musk had backed the coin in a cryptic tweet.
Many people think that Musk owns a large amount of Dogecoin. The price of the altcoin often goes up after Musk tweets about it. If Musk is doing this on purpose, it seems to be working, since as of mid-June 2022, the coin was worth about $0.044. Even though this is a drop from the high of $0.64 in 2021, the coin had been trading for years at about $0.002. But it’s still too early to tell what the coin’s long-term prospects are. Here’s what you need to do to buy Dogecoin right now.
How to Use a Crypto Exchange to Buy Dogecoin
Most cryptocurrency exchanges sell Dogecoin. For a small fee, a crypto exchange brings together people who want to buy or sell cryptocurrencies on the market. It works a bit like a stock exchange, but since the cryptocurrency market is not regulated, it does not offer the same security guarantees that stock exchanges do. Keep in mind that, just like with stocks, you could lose all of the money you put into any investment.
You will need to open an account with the exchange if you want to invest. If you only want to trade Dogecoin, you need to make sure that the exchange not only lets you trade this altcoin but also lets you trade in the currency you choose. Some crypto exchanges only accept USD as a form of payment for trading. You will also have to make sure that trading is legal in your country or region.
You will need to set up an account before you can start trading, even if the platform’s fees and payment options are good. Most of the time, setting up an account is easy and involves
Getting the app for the cryptocurrency exchange you want to use
Details like name, proof of address, a valid ID, social security number (in the US), and phone number
The exchange checks the information
After setting up, verifying, and activating the account, you will need to add money to it before you can start trading. Use a bank account, a debit card, or a wire transfer to do this. Cryptocurrency exchanges may also accept credit cards for these kinds of transactions. However, banks can charge high fees for using credit cards at exchanges, so users should be careful before using all of their credit to buy Dogecoin.
If you have enough money in your account, you can buy Dogecoin at the current market price or set up a Buy Order to make the purchase when the price of Dogecoin reaches a certain value. When a transaction is done, crypto exchanges also charge a small fee. This fee can be a fixed amount or a percentage of the transaction amount. How long does buying Dogecoin take?
Since the transaction must be confirmed on the blockchain, you may have to wait a little while for your Dogecoin to show up in your wallet. If you’ve ever bought Bitcoin, you’ll be glad to hear that transaction confirmation for Dogecoin usually only takes a minute, while it can take at least ten minutes, if not more, for Bitcoin.
Dogecoin is different from Bitcoin in this way because it uses a different encryption protocol. All of the transactions on the network of the coin are recorded in blocks in a public ledger. This is where the name “blockchain” comes from. Proof-of-work technology is used to confirm a transaction on the blockchain, just like Bitcoin. To do this, you have to solve complicated math problems to get a solution called a hash. This lets you add a transaction to the blockchain.
Even though it was made as a joke, the people who made Dogecoin tried to fix some of the problems with Bitcoin. For example, users complained that Bitcoin’s transaction speed was too slow.
How to keep Dogecoin safe
Most crypto exchanges let you store the Dogecoin you buy in a digital wallet. But some separate the wallet from the rest of their services, which means you have to pay extra to use their digital wallet or use a different wallet service to store your Dogecoin.
Since cryptocurrency holdings are public, and anyone can see how much Dogecoin a wallet has at any given time, it is important to have a safe wallet. Hackers are more likely to get into your wallet if it is not secure, and since Dogecoin is a decentralized currency, there is no way to get your money back if you lose it.
One can use an online wallet or a wallet that they carry around with them. An online wallet, which is also called a “hot wallet,” is always connected to the internet and can be used to receive Dogecoin or pay for things like buying things on the Tesla website. But hackers can get into hot wallets.
An offline wallet also called a cold wallet or hardware wallet, keeps your Dogecoin away from the internet so that hackers can’t get to it at all. Most of the time, this is done by moving your Dogecoin assets to a special device about the size of a thumb drive. Not every USB stick can be used as a cold wallet. You have to if you want to use one.
Buy the special device from a company like Ledger or Trezor, install the latest version of their software to keep the device safe, and then transfer your Dogecoin holdings to the device.
How to get rid of Dogecoins
Dogecoin’s value has a history of going up when Elon Musk tweets about it, only to go back down a few days later. If you bought Dogecoin when it was cheaper and want to make money when the price goes up, you will need to sell it quickly.
You can sell Dogecoin on any platform where you can buy it. If you have Dogecoin in a cold wallet, you will need to move it to a hot wallet before you can sell it.
Users can buy and sell Dogecoin and other cryptocurrencies on crypto exchanges. This can be a great way to hold different types of digital coins without putting more money into them.
If an investor wants to make money when the value of the coin goes up, all they have to do is sell Dogecoin for fiat currency like USD or Euros and keep the difference. Either a cryptocurrency exchange or a peer-to-peer exchange platform can be used to buy Dogecoin.
You can set up a Sale Order that the exchange will carry out when Dogecoin reaches a certain value, just like a Buy Order, or you can sell your Dogecoin at the current market prices.
What does a Dogecoin cost?
Since its launch, the value of Dogecoin compared to the US dollar has changed a lot. Last May, the cryptocurrency hit its all-time high of $0.64, but by the end of the month, it had dropped sharply to $0.30.
Dogecoin, like all other cryptocurrencies, is a very risky investment. At the time of writing, the price of Dogecoin was $0.056, which is still a big jump from 2018, when it was worth around $0.004, where it was in 2019.
What is the difference between Dogecoin and Bitcoin?
Bitcoin started as a way to replace traditional money, but Dogecoin was made as a joke or “just for fun” currency that grew into its own thing. Some stores now accept Dogecoin as payment, but because it is worth so little, it is not as popular as Bitcoin.
Dogecoin is not like Bitcoin, which has a limit on how many coins can be made. Instead, it is an “inflationary coin.” This means that it can be made in any amount. Since there will never be too few Dogecoins, it is unlikely that its value will ever rise to the level of Bitcoin. Dogecoin is also popular among Litecoin miners, in part because it can be “merged mined” with Litecoin. This means that both cryptocurrencies can be mined at the same time with the same work.
Dogecoin makes it easier for new investors to get started because it has a low price and low transaction fees. Many people who own Dogecoin use it to give tips to content creators on social media sites. Because Bitcoin is also very popular, its network tends to get crowded. On the Dogecoin blockchain, transactions are recorded faster than on other blockchains.
What is an exchange between peers? It can be used to buy Dogecoin, right?
A peer-to-peer (P2P) exchange lets traders do business directly with each other, without the need for a central third party. With this method, one can also buy DOGE.
P2P trading is different from most crypto exchanges in that users choose their offers and trade directly with other people instead of using an automated engine to make their deals. This gives you more freedom to choose the best rate and method of payment for your needs.
If you want to pay very low transaction fees, you might want to use a peer-to-peer exchange. A P2P exchange connects you to people all over the world who own cryptocurrencies, so you can buy or sell Dogecoin with very low or no transaction fees. The problem with these exchanges is that they don’t have as many rules and checks, which makes them popular with scammers. As a beginner, it can be hard to spot a scam, so the safest way to buy Dogecoin is on a well-known crypto exchange.
How do you keep Dogecoin safe? When choosing a provider for an online digital wallet, you should make sure it has the best security measures to keep your money safe. A wallet service with unreal or “never-seen-before” prices is probably cutting corners somewhere and hackers could target it.
If you want to buy a lot of doges, cold wallets are a great way to keep them out of the hands of hackers. Secured online (“hot”) wallets should be fine for new users with small amounts of meme coins that they want to use to buy things on the internet or trade from time to time.
As with other cryptocurrencies, anyone can see how many dogecoins you have. This means that scammers could try to steal your DOGE. Scammers will usually try to get you to believe that you can make a lot of money in a short amount of time, so you should always be wary of such promises.
If you have a lot of Dogecoin and plan to keep it for a long time, you can use trusted paper wallet services that let you print out your public and private keys. Then you can store them completely away from the internet, like in a safe deposit box that isn’t connected to the internet.
Is it a good idea to buy Dogecoin?
You don’t have to have a lot of money to invest in Dogecoin, but like other cryptocurrencies, Dogecoin investments come with a lot of risks. Elon Musk may sing “Baby Doge” from time to time, and prices may go up in response to events. But tomorrow, everything could go very quiet, which could cause the coin to crash.
As the year 2022 showed, even the value of high-flying coins like Bitcoin can drop sharply in just a few days. If you want to invest in this area, you should know that you could lose all of your money. Most of the time, these investments don’t come with any insurance.
Dogecoin, on the other hand, has been linked to some exciting projects, like paying to send a CubeSat on a SpaceX Moon Mission, so its value might go up soon. But this could also depend on whether the mission is finished on time and if there isn’t any other big news that could send crypto markets lower.
Dogecoin is a risky investment, maybe even riskier than Bitcoin. However, due to its low price, it could be a good way to get into the cryptocurrency markets without putting a lot of money into just one coin. If you’re looking for other ways to make money on the cryptocurrency market, check out our guides on how to buy Ethereum, NFTs, or good old Bitcoin.