Is it Smart to Invest in Dogecoin?
Are you looking to invest in Dogecoin but don’t know where to start? If so, you have come to the right place. Cryptocurrency assets come with a lot of risk. However, it’s also growing in popularity amongst investors.
The crypto market is crowding up quickly. But, Dogecoin has turned a fun joke into an actual investment opportunity. Take a glance at its thriving community and you will understand why.
Why Should You Invest in Dogecoin?
Dogecoin investing is community-based and that’s exactly where its potential lies. For example, disaster struck just weeks after its original release in 2013. On December 25th, a hacker stole 21 million DOGE, which was worth $12,000.
The community stepped in immediately, and started a fundraiser to replace the stolen coins. By February of 2014, the community completely replaced the funds.
This type of generosity is constantly on display. It’s another reason why so many people want to learn how to invest in Dogecoin in the first place. It’s much friendlier than most crypto communities out there.
Yet, Dogecoin began as a joke. A man by the name of Jackson Palmer took the likeness of an internet meme and turned it into a digital currency.
Most people remember the Shiba Inu dog meme that became an overnight sensation. This was right around the same time that Bitcoin was taking off. Palmer, along with the help of programmer Billy Marcus, combined the two and released the “joke currency” on December 6, 2013.
By 2015, over 100 billion DOGE coins were in circulation. Its value has jumped on many occasions since and it now has a market cap of over $340 million. Therefore, it’s now one of the most important cryptocurrencies available.
How to Invest in Dogecoin
Now for the big question: how can you invest in Dogecoin? The most common form is through its popular tipping service. Users will tip each other for posts they enjoy. It’s similar to social media “likes” in a sense.
This is one of the largest and most active communities in crypto. That is why tipping makes such a big impact.
But, there’s only a handful of cryptocurrency exchanges where you can purchase Dogecoin. In addition, there’s even fewer that have a good reputation to begin with.
For instance, Changelly doesn’t require anything more than an email to sign up, but it does come with a lot of fees. Kraken and Bittrex, however, will allow you to exchange Bitcoin for Dogecoin.
You will also need a unique wallet to invest in Dogecoin. If you invest in Bitcoin, you already have a crypto wallet and this should be quite easy.
In general, you can choose between a digital wallet or hardware wallet. Digital wallets are usually free and keep your Dogecoin online. But, it’s more vulnerable to hacks.
Hardware wallets cost as much as $120 up front. They take your Dogecoins offline, but allow you to manage the coins through a mobile application. The most popular hardware wallets come from Ledger. The most basic wallet will cost you around $60.
Dogecoin Mining Overview
When you invest in Dogecoin, it’s through a peer-to-peer digital transaction. These transactions take place in a public ledger known as the blockchain.
This blockchain is maintained by a mining system. Since this currency isn’t monitored by banks, it requires users to confirm each transaction.
That is where the blockchain comes into play. The blockchain doesn’t have any paid employees, so it rewards miners Dogecoin for confirming new transactions. Basically, each transaction becomes a new block on the chain.
This system is similar to Bitcoin. But, it uses a different mining algorithm. Dodgecoin uses a key derivation function known as Scrypt, while Bitcoin uses a set of hash functions known as SHA-256.
Investing in Cryptocurrency
Cryptocurrency comes with a lot of risk and is highly volatile. You can expect huge surges from time-to-time. Yet, you can expect major dips as well.
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The next big investment opportunity is one trade away. You may want to invest in Dogecoin and add cryptocurrency to your portfolio.