Dogecoin Pros and Cons – Dogecoin Explained

What is Dogecoin?

Originally started as a “joke currency” based on a meme about a happy-looking Shiba Inu (known as “Doge”), Dogecoin (DOGE) has gradually been building in value and can be easily traded on a wide variety of exchanges. It gained notoriety for its sponsorship of the Jamaican bobsled team in the 2014 Sochi Winter Olympics, raising funds for them when they could not afford to go. The community is also known for its other charitable activities, such as fundraising for Charity: Water to build wells in Kenya.

However, the cryptocurrency has had trouble being taken seriously for a few reasons: it has no full-time dedicated development team, hasn’t had an update in quite a while, and has been rocked by several exchange hacks and scandals. Supporters contend that while the technology behind it isn’t cutting-edge, there are no major security flaws and it continues to work well for what it is. Regardless, the fact remains that it is one of the most widely-used cryptocurrencies with an exceptionally large and active online community.

How does Dogecoin work?

Dogecoin is most closely related to Litecoin, though its code was initially based on LuckyCoin—itself a Litecoin variant. As with Litecoin, the blockchain is based on miners solving problems generated by the Scrypt algorithm. Indeed, the two cryptocurrencies actually merged their mining pools in 2014, meaning that anyone mining DOGE can also mine LTC. This is convenient for miners, but merged mining also helps increase the security of both cryptocurrencies by ensuring that there are always enough miners to prevent anyone from taking over.

One advantage Dogecoin holds over most other cryptocurrencies is its block-generation time of only one minute (versus Bitcoin’s ten minutes and Litecoin’s 2.5). This means that miners can validate your transaction and put it on the permanent ledger much more quickly.

Another rare feature is that there is no limit to how many DOGE can be produced. This keeps the currency’s value fairly low, which is in keeping with the non-competitive philosophy its community embraces. Despite recent price boosts, it is still being used for its first major application: an online tipping currency, primarily on Reddit.

Recent major developments

While development lags behind other cryptocurrencies, it was confirmed on January 15, 2018, that several people are working part-time on making the next major update, though no release date has been set.

DOGE is also set to be one of the sixteen coins featured by Robinhood, a popular stock-trading app, on their recently announced commissionless cryptocurrency exchange.

How to buy Dogecoin

Dogecoin’s coin is mostly bought and sold on Poloniex and Bittrex. You can’t buy it with fiat currency yet (USD), so here is a quick guide on how to buy Dogecoin starting with fiat:

1. Buy Bitcoin at an exchange that uses your fiat currency on Coinbase.
2. Transfer your BTC to an exchange that supports Dogecoin. Currently, Poloniex is the best choice. (Tip: if you bought BTC on Coinbase, look into using GDAX to avoid transfer fees)
3. Buy Dogecoin by trading your BTC for their coin, and you’re done!

Fun fact

Dogecoin is probably the cryptocurrency with the most “fun facts.” The community is famous for its friendly atmosphere, especially on the currency’s subreddit, which boasts over 100,000 members. Community participants are called “Shibes,” after the Shiba Inu dog breed featured in the coin’s meme-namesake. The official website even lists the currency as “favored by Shiba Inus worldwide,” and credits one of the creators as “Shibetoshi Nakamoto”—a pun on Bitcoin’s anonymous creator, Satoshi Nakamoto.

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