There are so many cryptocurrencies emerging in the crypto market. It can be challenging to know which crypto coins to buy or stake. Dogecoin is still a relatively low price, but is it worth buying Dogecoin?
Can you stake Dogecoin, and if not, why not.
Let's find out more about Dogecoin.
Dogecoin has been around for eight years, and it started as a joke on the Internet. So why are we interested in Dogecoin, and should you buy Dogecoin now?
Well, Dogecoin is making significant progress. It has a loyal following and has had some media attention recently. So let's explore why Dogecoin is becoming the coin to watch.
Dogecoin came from nowhere, but the current market cap is now #6 with $48,080,200,000.
There are currently 129,925,000,000 Dogecoin in circulation.
Dogecoin is growing fast, and now is the time to see what is happening with Dogecoin.
- What is Dogecoin?
- How is Dogecoin Mined?
- Proof of Work vs Proof of Stake
- What is the Purpose of Dogecoin?
- Can I Stake Dogecoin?
- The Dogecoin Wallet
- Where Can I Buy Dogecoin?
- Why Should I Buy Dogecoin?
- Key Takeaways from How to Stake Dogecoin
What is Dogecoin?
Dogecoin is an open-source digital currency. You can send peer-to-peer low-cost transactions with Dogecoin.
It came to market in December 2013, and it began as a Doge Internet meme with a Shiba Inu, a Japanese dog, on its logo.
Jackson Palmer and Billy Markus, the founders, wanted to create a light-hearted cryptocurrency with greater appeal with the fun dog theme. Suddenly, Dogecoin was no longer a joke. Indeed, it became a practical, low-priced source for micro-tipping social media content.
Dogecoin is a derivative of Luckycoin, which was a fork of Litecoin. Dogecoin used the Luckycoin code initially and used a Scrypt-based consensus algorithm to impose how a network of computers running their software came to a consensus with transaction history. Luckycoin has now disappeared.
Recently, Elon Musk, CEO of Tesla, tweeted that Dogecoin is his favourite crypto coin. He said that he wants to be involved in improving Dogecoin. He said, "Working with Doge devs to improve system transaction efficiency. Potentially promising."
When Elon Musk makes a statement on a cryptocurrency, something always follows. The last tweet he made regarding Bitcoin created an almost immediate 10% drop in the price of Bitcoin.
And, his comment stirred the price of Dogecoin, which rose 40% after Elon's tweet. Over the last year alone, Dogecoin price increased by 15,000% (Source: CoinDesk Data).
Initially, Dogecoin was capped at 100 million DOGE. But within a few months after launch, developers scrapped this figure because they wanted to make its money supply inflationary.
Dogecoin is one to watch, and the future looks exciting for what may happen next with Dogecoin.
How is Dogecoin Mined?
Currently, Dogecoin is proof-of-work (PoW), but Alex Mashinsky, Co-founder, Chairman and CEO of the Celsius Network, recently speculated about a likely transition to proof-of-stake (PoS). He said, "I'm going to make a prediction," declared Mashinsky, "in the next two years, Dogecoin is going to migrate from proof of work to proof of stake."
Dogecoin uses Scrypt technology with no limits on the number of coins for mining. You can mine Dogecoin as an individual or join a Dogecoin mining pool, typically called a team.
Unlike Bitcoin, which requires high-level computing, it's possible to mine Dogecoin on Windows or a Mac or Linux (and with a GPU). Dogecoin is one of the lowest users of electricity, averaging 0.12 kilowatts per hour (Source: TRG Datacenters)
To get started mining Dogecoin, you need to download the Dogecoin wallet. More details on how to do that later.
Proof of Work vs Proof of Stake
Bitcoin network uses proof of work (PoW) protocol to validate BTC transactions on the digital ledger. Although each block only takes ten minutes, the process is highly complex and expensive. Bitcoin miners receive Bitcoin rewards, but only if they are the first to solve the hash problem. There are no guarantees of rewards.
PoW is a massive drain on environmental resources because of the high-energy requirements. It's unlikely that PoW will be allowed to continue indefinitely, so a move to PoS protocol is a sensible sustainability target for all cryptocurrencies.
We believe that, where possible, more cryptocurrencies will switch to proof-of-stake (PoS). It's more cost-effective and efficient than PoW and much easier on the environment.
Although Dogecoin is currently PoW, it is more efficient than Bitcoin mining and other blockchains. It mines at 1-minute intervals, and there is no cap on coin supply, which means that Dogecoin has significant potential for the price rising.
Alex Mashinsky said that a transition to the proof-of-stake protocol could elevate Dogecoin to viable crypto, no longer viewed as a "meme." He said, "If Dogecoin moves from proof-of-work to proof of stake. It would be more viable. It will have a use case."
He added, "Instead of a meme, it would actually be something that has a utility that can be used long term."
What is the Purpose of Dogecoin?
Dogecoin is typically used to reward content creators or for sharing content creation.
If you participate in a community that used Dogecoin, you can get Dogecoin rewards. Or, if you buy from an online Dogecoin faucet, you will receive a small quantity of Dogecoin to encourage interaction with Dogecoin communities.
Read Also: Could Dogecoin be a Millionaire-Maker Coin?
Can I Stake Dogecoin?
Dogecoin is mined with proof-of-work (PoW) protocol, which means you cannot yet claim and stake Dogecoin. You can, however, earn inflationary rewards from buying Dogecoin and joining communities that support projects.
Dogecoin founders say that they plan to transition to proof-of-stake (PoS) over the next two years.
The Dogecoin website is relatively light with information on how to gain rewards from Dogecoin, and it isn't clear how many DOGE tokens you can earn. Right now, the process is to become a participant in a Dogecoin community and share the DOGE rewards.
There is yet no mention of the levels of rewards or quite how you earn them.
The Dogecoin Wallet
To secure your Dogecoin and to take part in Dogecoin mining, you need a Dogecoin wallet.
To do this, go to the Dogecoin website to download it to your computer or Smartphone.
The process is simple:
- Choose your wallet – Your wallet holds your Dogecoin on your computer or Smartphone. To use Dogecoin, you have to sync with the blockchain.
There are two wallets available.
MultiDoge – a light wallet that syncs with the blockchain to skim through it, which provides fast sync times. The wallet is available for Windows, Mac or macOS
Dogecoin Core – a full wallet that syncs by downloading and providing a complete working Dogecoin wallet. Available for Windows 32-bit or 64-bit, Mac 32-bit or 64-bit or macOS
- Configure your Dogecoin wallet – once you have downloaded your wallet, an online guide is available on the Dogecoin website
- Acquire some Dogecoin – there are several ways to get Dogecoin. You can buy them or trade for them. Or you can 'get tipped' by the Dogecoin community, or you can mine Dogecoin.
You can also join a distributed computing project called [email protected] (FAH), where you join team dogefolders, adding your computing power. This team is doing great work.
If you are a fan of a great film called Cool Runnings, you'll love this snippet of information. The Dogecoin community raised over $36,000 to help the Jamaican bobsled team to the Sochi Winter Olympics. These are the type of cool projects you can become involved with when you join the Doge team.
You can receive DOGE rewards for your involvement in helping find cures for diseases.
Where Can I Buy Dogecoin?
Always buy your cryptocurrency from an established, reputable exchange.
Here are three recommended platforms for buying DOGE -
- eToro – eToro is an established and trusted trading platform. Early in May 2021, eToro listened to their thousands of users and added DOGE to their cryptocurrencies. You can now buy or sell DOGE with eToro
- Binance – a reputable cryptocurrency exchange
- Kracken – a trusted global exchange
Remember, after you have purchased your DOGE, you will need a secure wallet to store your DOGE. Download your DOGE wallet before you go ahead and buy Dogecoin.
Why Should I Buy Dogecoin?
Dogecoin has cultivated a strong, loyal following, especially with users of social media sites such as Reddit and Twitter.
DOGE is gratuity crypto which means you can tip other people in certain communities for various services and online content.
In March this year, Cuban announced that Dallas Mavericks would accept DOGE as payment for merchandise and tickets – so far, this has resulted in over 20,000 transactions.
Today's (June 7th 2021) Dogecoin price is $0.373895 with 24-hour trading volume of $1,885,744,598 USD.
DOGE is gathering momentum, and if the proof-of-stake transition gets going, it could well jettison the price of DOGE.
Don't Miss: Will Dogecoin Make Me Rich In 10 Years?
Key Takeaways from How to Stake Dogecoin
At first, nobody took Dogecoin seriously. The coin did, after all, start as a joke.
But, over the last six months, serious cryptocurrency investors have sat up and noticed Dogecoin. Many people are now wondering if they should start buying DOGE coins to add to their crypto portfolio.
With public statements of interest from Elon Musk and Snoop Dog, it's impossible to ignore the potential of Dogecoin. Market sentiment drives price, and cryptocurrencies are no different in this regard.
If more high-profile investors start making positive statements about Dogecoin, the price will continue to rise. Equally, negative comments would push the price of Dogecoin down.
Mining DOGE is easy and low-cost, and, unlike Bitcoin, you can still do it on your home computer.
Dogecoin is currently a proof-of-work (PoW) protocol but plans to transition to proof-of-stake (PoS) protocol.
Dogecoin is #6 on the cryptocurrencies market share list. But they are a little behind some cryptos that have already transitioned to PoS, such as Cardano.
Ethereum is still rolling out PoS, and it hasn't come without problems.
The main bonus of Dogecoin is the accessibility to join a team, get involved in exciting projects and receive Doge rewards.
eToro – Best Exchange to Buy Dogecoin
eToro have proven themselves trustworthy within the Crypto industry over many years – we recommend you try them out.
Virtual currencies are highly volatile. Your capital is at risk.
When will Dogecoin Change to proof-of-stake (PoS)?
The suggestions are that Dogecoin will migrate to proof-of-stake (PoS) over the next two years. Despite using proof-of-work (PoW) protocol, it isn't massively expensive to mine DOGE.
Proof-of-stake means that you can stake actual Dogecoins without the need for mining DOGE.
Should I BUY Dogecoin in 2021?
We can't make that decision for you. All we can say is that, finally, Dogecoin is attracting attention as a viable cryptocurrency, and it still relatively low-priced to buy.
If you buy Dogecoin now and mine it, or join a Dogecoin community, in a few years, with proof-of-stake (PoS) protocol, you may be able to stake your Dogecoin
Will DOGE ever reach $1?
Cryptocurrency Industry experts predicted that Dogecoin DOGE would reach $0.34 by the end of July 2021. Well, it's June 2021, right now, and the price of Dogecoins has already smashed that figure.
With the increases – and attention - that Dogecoin has seen in the last few months, a target figure of $1 is not within the realms of impossibility within the next few years or earlier.
As with all expert market predictions, they can be wrong. You've only got to look at the meteoric rise of Bitcoin to demonstrate that no amount of predicting can foretell the future of cryptocurrencies.
What are the Risks of Dogecoin?
Just because a cryptocurrency is a low price doesn't automatically mean it's a good investment. Cryptocurrencies are still speculative investments.
Nobody can predict what will happen with cryptocurrencies in the future. If governments found a way to regulate cryptocurrencies, the bottom could fall out of the market.
All cryptocurrencies are volatile. Dogecoin price was at $0.68 when it crashed, wiping out almost half of the gains. Today (June 7th 2021), the price of Dogecoin is $0.37. Had you bought at a high price, you'd be sitting on a significant loss right now
If you decide to invest in Dogecoin, only spend what you can comfortably afford to lose.
Please note that the above information is not providing advice on tax, investment, or financial services. We provide the above information without consideration for risk tolerance and a specific investor's financial circumstances.
Trading or investing in cryptocurrencies may not be suitable for all investors. It does involve risk and the possibility of a loss of capital.