Everything You Need to Know About Dogecoin

Dogecoin is a type of cryptocurrency that was created by Billy Markus and Jackson Palmer mostly as a joke. The coin has an image of a dog on the front and was inspired by a popular internet meme that features a Shiba Inu.

Palmer and Markus never expected dogecoin to catch on, but it’s recently grown to become the 10th most valuable crypto. To help you decide whether or not dogecoin is a good investment, here’s everything you need to know about this unique currency. 

What is Dogecoin?

Dogecoin is a type of cryptocurrency that’s stored in a digital wallet. You can trade it, hold it as an investment, or spend it online. 

Most retailers don’t accept cryptocurrency because it’s more volatile than fiat money like USD. But you can still use it to purchase gift cards through services like Bitrefill. Many fans of dogecoin also use it to give tips to online content creators to thank them for their hard work. 

Is Dogecoin a Good Investment?

Dogecoin has recently surged in popularity. Many celebrities like Elon Musk and Snoop Dogg have started tweeting about it, which has created some buzz and caused its price to increase. 

Everybody’s talking about dogecoin, so it may seem like a good time to invest before prices go up even more like they did with bitcoin. However, there’s no guarantee that dogecoin will continue to rise. 

Many people believe that part of why bitcoin is in such high demand is because the supply is limited. There are only a certain number of bitcoins, which may be driving up the price. 

However, dogecoin is uncapped, so the supply isn’t limited. Experts believe that this may prevent it from becoming as valuable as bitcoin and other major cryptocurrencies. 

It’s also worth keeping in mind that cryptocurrencies are considered risky investments because prices rise and fall in a pretty volatile way.  So even if you think dogecoin is the next big thing, you definitely shouldn’t pour all of your money into it.

If you want to purchase dogecoin, it’s wise to keep it as a small part of your portfolio and allocate most of your savings toward traditional, proven investments. 

How to Get Dogecoin

You can either get dogecoin by mining it or purchasing it through an exchange. Here’s a closer look at both options. 

Mining Dogecoin

If you’re not familiar with mining, it involves running software on your computer that confirms the accuracy of recent cryptocurrency transactions. This helps secure the network and prevents people from lying and claiming they have more coins than they actually do. 

In exchange for performing this task, you may get a small reward. But your computer has to be the first to document the transaction and add it to the blockchain, so you’re not guaranteed any dogecoins. It’s kind of like playing the lottery, so you can’t go into it expecting to win every time. 

However, the great thing about mining dogecoin is that you have a much higher chance of winning than you would with bitcoin. It also takes less computer power and time, so it’s easier to get started with. 

Buying Dogecoin

If mining dogecoin sounds like too much work, you can purchase it on exchanges like Binance and Kraken. 

Unfortunately you can’t buy dogecoin with USD. So you’ll have to purchase another cryptocurrency that’s listed as a pairing and trade it for dogecoin. 

Wrapping Up

If you’ve never bought in cryptocurrency before, dogecoin is a great coin to start with. But don’t get carried away by the hype and invest more money than you can afford to lose.

Even though prices have been on the rise recently, they could fall at any time. Cryptocurrency is a pretty volatile investment, so you should always exercise caution when deciding how much to buy.

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Check out these helpful tools to help you save more. For investing advice, visit The Motley Fool.

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