What Is Dogecoin? How Does It Work?

What Is Dogecoin?

Dogecoin (code: DOGE) is an open-source P2P cryptocurrency created by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer. It is shown with a Shibu Inu (Japanese dog) as its logo and this cute presentation makes it popular in the crypto community in Reddit. Dogecoin's protocol is based on existing cryptocurrencies Litecoin, which use scrypt technology in their proof-of-work algorithm. The digital currency, Dogecoin started as a joke but now the market capitalization is nearly $85 billion and still increasing.

What's the History of Dogecoin?

• December 6, 2013: Because of the popularity of digital currency, a large number of people rush to invest in cryptocurrency or start mining. The software engineer Billy Markus and Jackson Palmer tried to create a peer-to-peer digital currency to make fun of digital currency, such as Bitcoin. Then they launched Dogecoin on December 6, 2013, which is an unlimited supply and low price. With the aim that everyone can obtain, not just limited to crypto experts. At the early stage, users start to use Dogecoin as a tip to reward people online.
• December 19, 2013: Dogecoin increased nearly 300% in value in 72 hours.
• December 25, 2013: Millions of coins were stolen during a hack on the online cryptocurrency wallet platform Dogewallet.
• January 2014: The trading volume of Dogecoin surpassed that all other cryptocurrencies combined.
• 2015: Jackson Palmer left the cryptocurrency community.
• April 2020: Elon Musk tweeted, "Doge barking at the moon," which led Dogecoin's value to rise over 600%.
• January 2021: Encouraged by Elon Musk, Dogecoin went up over 800% in 24 hours, attaining a price of $0.07.
• May 9, 2021: Rideshare mission of SpaceX to the Moon completely funded by Dogecoin.

How Does Dogecoin Work?

• Dogecoin is based on blockchain technology, similar to Bitcoin, Litecoin, or any other on-chain digital currencies. Dogecoin's blockchain network uses cryptography to keep all transactions secure. The miner of Dogecoin also gets rewards by solving complex mathematical equations in order to process transactions and record them on the Dogecoin blockchain.
• People can use it to purchase products in theory but due to its unlimited supply, millions of new Dogecoins are rewarded to miners every day, the value may be decreased--it is basically an inflationary currency.

How to Mine Dogecoin?

Dogecoin uses a "Proof-of-Work" mechanism just like Bitcoin and Litecoin, this process is called "mining" where individuals or organizations compete to calculate math problems to add new blocks to the blockchain ledger using specialized computer equipment, in order to get dogecoin reward. In the early day, it is easy to mine dogecoin by using your own laptop or PC. However, with the popularity of Dogecoin, the mining process became more difficult. Generally, Dogecoin can be mined using various types of hardware, including:

• Computer processors: It is not an ideal way to mine since the efficiency is quite low.

• Graphics cards (GPUs): GPUs are more suitable than CPUs to mine Dogecoin.

• Scrypt ASIC miners: Best choice for mining DOGE, as they are specifically designed for the sole purpose of mining.

Mining software such as EasyMiner\ CGminer\CudaMiner\CPUMiner\MultiMiner is essential for mining Dogecoin no matter which type of miner you use.

After choosing the hardware and software, you need to create a wallet that can be used to collect the Dogecoin, and then you can launch your mining operations to mine. Also, you can simply join a mining pool or sign up for cloud mining services to mine Dogecoin.

What are the Pros and Cons of Dogecoin?

Pros:

• Confirmation time is shorter than Bitcoin, which only takes about 1minute.
• The transaction fee for Dogecoin is low.

• With the lower value, many social platforms accept it as to pay for the content creators.

Cons:

• It is an inflationary currency that limits Dogecoin as a means of investment.
• No Smart Contracts, limited usage.

• Security problem, since it has no technology group to support now.

How Is Dogecoin Different From Bitcoin?

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