The Essential Guide to the Doge Coins
Imagine that somebody gave you a bundle of obviously fake dollars, sent you to a bunch of different stores to spread the joke, and then all of a sudden that cheat money became the real deal in your state. Sounds outright impossible, right? Who would ever barter in joke cash? Well, as Karma would have it, this thing actually already happened, and even entered into relevant encyclopedias. You can see for yourself at this link.
Meme money is now a reality
Calling it “meme money” might sound weird to an aspiring trader, but that is how it got started. It was created in 2013, December, and its primary purpose was to poke fun at the cryptocurrency boom.
At that time, piles of odd crypto coins were popping up like mushrooms, and many of them have proven to be entirely worthless in the long run. Dogecoin was created as a satirical response to that frenzy. So, not only does its name and brand feature a meme character, the currency itself is actually a financial meme.
However, underneath all the fun and games, Dogecoin had another aim. Bitcoin, which was the most dominant cryptocurrency at the time, was actually not all that accessible. Dogecoin was a proposed alternative, more accessible and more fun. Moreover, the idea was to have a gigantic supply of it, so that individual coins would stay at a low price no matter what.
The widely beloved Shiba Inu face and net-name made sure that rumors about the new coin would spread like wildfire. The memes themselves also proved a great asset in marketing the currency – all it took was to take a good doge pic and pepper it with trademark phrases like “such coin”, “much cheap” etc.
How it works and why it makes economic sense
Dogecoin came about by forking off from Luckycoin, whereas the Luckycoin itself is also a fork – in this case, one of Litecoin. This is why the Dogecoin is fairly similar to Litecoin in some respects, though not quite the same.
For example, it still uses the Scrypt, an algorithm designed to prevent Bitcoin ASICs from mining it, even though Scrypt ASIC miners have become a reality since 2013. Perhaps the most notable technical difference is the shortness of the Doge block time when compared to that of Litecoin.
As we previously mentioned, this cryptocurrency was designed to be accessible, by way of there being an insane supply of it. Let’s put that into perspective: the DC market (Dogecoin, not superhero universe) was estimated to be worth approximately $750 million in 2018, but the DC tokens usually come in at less than a single cent.
Because the individual coins cost so little, transactions also feature a much lower fee than any competition. Moreover, they are executed quickly and confirmed just as fast.
So what can you do with Doge Coins?
Satirical meme ancestry or not, at the end of the day, DC is a cryptocurrency, meaning that it is a means of trade and business. But what can you use this kind of currency for?
Perhaps the most widely known use of this coin, if not the most “serious” one, is “tip your netizen”. Basically, it is used like “tipping money”, to show appreciation to your fellow Internet users when they create or share some exceptional content, witty comments, or such. This is most widespread in the world of YouTube video uploads and commentary on Reddit.
Well, there are actually some serious traders who use it in legit exchanges, by virtue of its stable value, rapid transaction time, and low fees. This mostly sees the DC tokens being used as a go-between among other currencies. Example: withdrawing assets in Bitcoin can be quite expensive, so a person may convert their BTC to DC, then withdraw, and then trade the DC for something else again.
For a real in-depth look at the mechanics and challenges of crypto exchange, check out this post: https://hackernoon.com/how-do-cryptocurrency-exchanges-work-and-what-technologies-are-driving-disruption-33d0007eb018
Other people tend to rely on it for safe speculation. Because each token is so cheap, you can buy masses of them without spending much, and you still profit from the tiniest price increase.
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