5 Things to Consider If You Want to Buy Dogecoin
Knowing what coin you wish to buy and where to look for it is great for a start, but there are still other things to be arranged and considered before you actually get into buying or trading. These are little things that traders tend to overlook, which can later have a negative impact on their performance. But, it is nothing overly complicated or difficult, and certainly not something that you can’t prepare for relatively quickly.
Here is what we had in mind.
Carefully choose your preferred secure payment method
The crypto industry is becoming more and more accepted, and so there is a variety of payment methods available for you to deposit your money. There are credit cards, debit cards, bank transfers, crypto deposits, and more. Not all locations in the world have the same payment methods available, of course, although this is slowly changing.
But, in order to select the most convenient payment method, you must also keep in mind things like speed of transfer, the cost of each payment, and similar details. For example, wire transfers take longer for the payment to arrive, but they are generally cheaper than credit cards, which deposit money a lot faster.
Will you need to set up your own wallet?
Next, your own private wallet. You might be wondering if you need one in the first place? After all, centralized exchanges have their own integrated wallets, where you can store cryptos when you buy them. However, we do not recommend doing this.
Exchange wallets are generally a lot less safe than having your own wallet. They can be hacked as there are multiple entry points for skilled hackers, while your wallet can be much safer if you set up a strong password. Not only that but if you use a hardware wallet which you disconnect from your computer and the internet, it is completely inaccessible to online criminals once you plug it out.
Besides, you don’t only have hackers to fear when storing your funds on an exchange. If the platform were to crash for some reason, your money would be out of reach. The same would happen if the exchange decides to freeze your account for some reason. For this reason, it is best to withdraw your funds as soon as you are done trading.
Note that the only scenario in which you don’t need a wallet is if you are trading crypto derivatives contracts, such as CFDs (Contracts For Difference). The reason for this is the fact that you don’t buy actual coins — you just bet on the direction in which their prices will move.
You need to also keep in mind that all crypto transactions come with transaction fees, and DOGE is no different. This is why you should also be aware of the average transaction fee, and consider whether or not it pays to use it. Of course, crypto payments and transactions are usually a lot cheaper than transaction fees you might find in traditional finance.
Even so, there are examples of coins that may see a major increase in their fees, often caused by scalability issues. This is often seen with Bitcoin and Ethereum, so check out how much an average DOGE transaction fee is, and confirm that you are fine with it before proceeding.
Safety and Security
There is always the matter of security. Now, fortunately for Dogecoin, this cryptocurrency is considered to be very safe. After all, DOGE’s blockchain has never been hacked. Blockchain technology is usually safer than other payment systems, as it is decentralised.
If someone were to attack a centralised company, all they need to do is hack a single server, and they would likely be able to move through its entire system. When it comes to blockchain, you would have to hack 51% of computers that make up its network of nodes. Given that these nodes are operated by different individuals all across the world, this is next to impossible.
It can only happen for projects that only have a handful of node operators, and the process is known as the 51% attack.
But, while the blockchain is secure, you must also consider the security of the exchange or broker that you employ. There are multiple cryptographic security protocols, such as 2FA (Two-Factor Authentication), MetaMask 4 and 5 (MT4/MT5), and others, so keep an eye on that before selecting your broker.
Can you understand and navigate the platform?
Lastly, you should note that different exchanges and brokerages have their own unique technologies, designs, and alike. This means, not every platform is the same, with some more difficult to navigate than others. These are typically professional platforms that do not care about educating newcomers and focus instead on the more seasoned trader.
They expect their users to be professionals who know their way around an exchange, and so, platforms like that are not the best way to start your crypto journey if you are new to the scene. A beginner would likely get confused and intimidated by complex analysis tools and the sheer variety of services available on such platforms.
If this happened to you, know that there are simpler alternatives out there that you can use to start, and work your way up to more complex exchanges.
Ultimate Beginner’s Guide to Trading Dogecoin
What is a Dogecoin Broker?
Brokers are services that can be used by traders for accessing various trading assets. They can also be instructed to trade on users’ behalf, with traders having to provide the money and instructions on what the broker should do. Brokers exist in traditional finance, as well as in cryptocurrency trading.
Crypto brokers enable people to buy or sell cryptocurrencies at the prices set by the brokers themselves. Naturally, their services do not come for free, and they charge trading fees for each trade.
What is a Dogecoin CFD?
CFDs, or Contracts For Difference, are financial instruments that can be used by traders who do not wish to actually own Dogecoin, but want to make a profit based on price speculation. CFDs use another asset — in this case, Dogecoin — as an underlying asset, and allow users to bet on its future price.
Basically, users predict in which way the price of DOGE will go, and then purchase a contract that gives them the right (but not obligation) to buy the asset at a specific time. The main advantages of using CFDs is that the user doesn’t have to store and secure the coins, as well as the ability to make a profit even if the price of the underlying asset drops. Provided, of course, that the user has made a correct forecast.
In contrast, if you were to buy DOGE coins directly, you will only make a profit if the DOGE price grows, so that you can sell them at a greater price than what you paid for when you bought them.
What is the Benefit of Dogecoin Regulation?
Regulation has been a hot topic in the crypto industry for years now. It is important to regulate digital currencies for investors’ protection. This is also why it is important to only use brokers and exchanges that are regulated by the leading global authorities.
If you were to use a regulated broker and something happens to it so that you cannot access your money, you can turn to the authorities for help. If you use an unregulated broker and they end up being scammers, there is not much that anyone can do to help you out.
Regulations also keep brokers from trying to manipulate the market and ensure that they will behave properly under the ever-watchful eye of the financial regulator.
What is the Best Payment Method for Buying Dogecoin?
Buying Dogecoin is a fairly simple process. There is a variety of methods available to people around the world right now, so you get to consider many different options and take your pick. For example, you can go for:
Buying Dogecoin with Credit/Debit Card
This is likely the fastest way to buy DOGE. All you need is a card with some money in your account and a centralised exchange that allows you to buy DOGE in exchange for fiat. You create an account on the exchange, connect your card, deposit the money, and purchase DOGE.
Buying Dogecoin on Decentralised Exchanges
Another possibility is buying DOGE on decentralised exchanges. These work somewhat differently and do not require you to deposit money onto their platforms. Instead, they let people enter positions and make their offers to buy and to sell. Interested counterparties then choose the offer and agree on the payment method, which can include card transfer, bank transfer, PayPal, or any other option. Once the seller receives the money, they release the coins to the buyer, and the trade is completed.
Buying Dogecoin with another Cryptocurrency
Another easy way to obtain DOGE is to buy it with another coin, such as Bitcoin (BTC) or Tether (USDT). For this, all you need to do is find an exchange that has DOGE listed, and see which coins it is paired against. If you have that coin, deposit it into your exchange wallet and make the trade. If you do not already own the alternative coin, and you cannot buy DOGE with fiat, you can purchase the coin that DOGE is paired against, and then exchange it for Dogecoin.
Buying Dogecoin on Crypto ATMs
Crypto ATMs are drastically growing in number around the world, and they offer users the ability to buy cryptos in exchange for cash on the spot. All you need to do is find one that has DOGE on the list of supported cryptocurrencies, feed it some cash, and select the amount of DOGE that you wish to buy. It is all done very quickly and easily.
The Verification Process for Trading Dogecoin
Whenever you sign up with a regulated broker or exchange, you will find that you must verify your identity. Some platforms only ask you to verify your identity if you want to go for larger purchases, but others will ask you to do it as an extension of the registration process itself. This is something that they have to request in order to comply with regulations and help prevent money laundering, financial fraud, terrorism financing, and similar criminal activities.
The process itself is very simple — the platform will request specific documents that you must upload, review them, and confirm everything is in proper order.
Long vs Short Term Investment
Another thing that you need to consider is whether you wish to go for a short-term investment or for long-term. There is a vast difference between the two approaches, and depending on what you wish to do, you may choose a completely different trading strategy.
Short-term investments include buying Dogecoin for a short while, typically when its price is low, and seeking to sell it when it grows in a relatively short term. This can be within minutes, hours, or even a few days. The point is to earn small amounts — as much as volatility allows, which is often not much — but make profits often. The main downside is that you have to be constantly present and keep an eye on the market so that you don’t miss out on rapidly moving opportunities.
In contrast, long-term investments revolve around buying coins with the intention to hold them for months, or even years. The logic behind this is that the prices will ultimately go up, and so far, they have for a lot of assets. Dogecoin itself skyrocketed to a new all-time high only days ago, surging multiple times more than its previous ATH, so those who bought it months, or even years ago likely earned quite well upon selling it. The rewards from this approach are great, but the downside is that you need a lot of patience to be a long-term trader or a HODLer.
Why Buy, Rather Than Trade?
We have discussed the cheapest way to buy Dogecoin, but we have yet to talk about why you should do it, rather than just trade with it?
The biggest reason for doing this is that the prices of cryptocurrencies move in cycles. They rise, they fall, and then they rise again, and from what was observed in the crypto market — each following growth exceeds previous records.
So, if you were to buy coins and then hold them and wait for a few cycles to pass by, you may possibly be able to sell them at a much, much higher price and earn a sizable profit. The downside is that you will have to wait for a long time — probably for years, maybe even a decade or longer, and there is no guarantee that it will rise at all. In the end, you have to make the most informed choice you can based on all the information at hand.
But, doing so could be a good way to start your own retirement fund, and simply have the money waiting for you in the future if you were to buy Dogecoin cheap right now. Of course, you will have to do some research in order to properly set up your wallet, make sure that you secured the funds adequately. So, you will have to get quite involved. But, if the payday comes, you will likely be glad you took the time to do these things.
Again, the decision is on you, but HODLing definitely has its advantages if you can be patient.
What Fees Are Involved?
Most activities in the cryptocurrency space come with some sort of a fee, which can range quite a bit, depending on the coin. Brokers and exchanges typically charge for their services, so you can expect to encounter:
Transactions almost always come at a small fee, which ends up being used by the broker or exchange for maintenance costs, new developments, and alike.
Deposits tend to be free of charge on most platforms, but this is not a rule, and you may encounter a platform that charges you for depositing money, as well.
Some platforms offer free withdrawals, but most will charge some sort of a fee, which typically depends on the amount you are withdrawing or the transfer method. For smaller amounts, it can be fixed, while higher amounts may have a percentage-based fee.
Safely Storing Your Dogecoin
As we mentioned before, you are recommended to set up a private wallet to store your DOGE safely. There are many different types of wallets in the crypto industry, such as:
Web wallets usually come in the form of a browser extension or a website. Their main advantage is that they are always online, which makes it easy to transfer your funds in and out at any time, even on the go. The downside is that they can be easily hacked since they are always on the internet.
Mobile wallets can be more or less safe, depending on whether the phone is constantly connected to the web or not. You can use it as hot or cold storage, and they are convenient as they let you trade on the go. The downside is that you need to take extra care to secure your device, as well as your wallet.
Much like mobile wallets, these can be hot or cold, depending on whether your computer is connected to the internet. With proper security, such as antivirus and anti-malware programs, you can secure your device quite well. They are convenient and overall good middle solutions between hot and cold storages.
Hardware wallets are the safest forms of crypto wallets, as they are connected to the web only while you transfer coins in and out. These are USB stick-like devices that you can plug in or out, and while they are disconnected — your coins are unreachable. The downside is that you need to purchase the actual hardware and that they are not as convenient, as you need to plug them in into a computer in order to make use of your coins.
Some wallets can be interlinked with one another so that you can benefit from high security and greater convenience. For example, you can hold the majority of your coins on a hardware wallet where they will be safe, and only a small portion intended for trading in a hot wallet. That way, even if it gets hacked, the majority of your funds will still be out of reach.
What Other Coins Can I Trade or Use to Buy Dogecoin?
If you can’t find an exchange that allows you to buy DOGE directly with fiat, you can always purchase DOGE with Bitcoin or Tether, as these are the coins that DOGE is typically paired against.
What’s the Smallest and Largest Amount of Dogecoin I Can Buy?
Both, the smallest and largest amount depend on the platform that you are using. Exchanges can have a self-imposed DOGE limit, or they limit your purchase due to standing regulations. With the DOGE price being well below $1, it mostly doesn’t pay to purchase fractions of the coin, as your transaction fees will be higher than the amount you will actually own.
There are also platforms that let you acquire DOGE without limit, although those might not be regulated, and such platforms are best to stay away from.
Can I Buy Dogecoin Anonymously with no ID? Is it Safe and Legal?
Buying DOGE is safe and legal pretty much everywhere in the world. The legality is only questionable in some countries, such as China or Russia. Mostly everywhere else, you can purchase DOGE safely.
As for buying without IDs, you can do it on some exchanges that do not require you to verify your identity if you make small transactions. There you can buy DOGE without ID, if you stay below the daily/weekly/monthly limit, depending on the platform’s rules.
Will Buying Dogecoin Make Me Money?
Asking does buying Dogecoin make you money depends on how you use it. If you HODL until the price skyrockets — sure, it can make you a decent amount. If you buy it and sell it frequently, you can make smaller profits, but do it often, which is also a good form of earning.
DOGE, specifically, is unpredictable. It has remained popular long after many expected it to disappear, so anything is possible. In the end, answering the question of “Should I buy DOGE?” is something that only you can decide.
How to Spend Your Dogecoin
Dogecoin is typically not accepted by too many merchants. But, if you have a crypto debit card of a company that supports it, you can likely use it for making payments pretty much anywhere.
Alternatively, you can exchange it for another coin like BTC, and make payments at hundreds of merchants that accept it.
How to Sell Your Dogecoin
Selling Dogecoin is fairly simple. All you need to do is go to your exchange of choice, deposit your coins in its wallet, and enter a position. This means choosing the ‘Sell’ option, entering the amount you wish to sell, and then wait until a buyer comes along and purchases your coins.