If you’re of a certain age (read: Gen Y or Z), you’re familiar with the slang term “Doge,” which is a misspelling and mispronunciation (“dohj”) of “dog.” The dog in question, a cute little Shiba Inu, was an internet meme sensation in 2013 that has never really gone away. Doge says all sorts of funny things that he’s thinking, using broken English and poor spelling.
Dogecoin is a cryptocurrency created in 2013 by software developers Billy Markus and Jackson Palmer as a satire of Bitcoin and the exploding popularity of crypto. It has no real use (some people use it to give small tips on social media), but it’s developed a growing fanbase that’s boosted the price of a Dogecoin from less than a penny a few months ago to about $.05 today.
Because Dogecoin is cheap relative to other cryptos, it can be an ideal way for crypto-curious investors to dip their toes in the water. Watching the price of Dogecoin fluctuate can be a good lesson for kids or noobs in how crypto markets work and prepare them for some real investing. Think of Dogecoin as the gateway cryptocurrency.
Here’s everything you need to know about Dogecoin and how it works.
What is Dogecoin?
According to its website, Dogecoin is “a decentralized, peer-to-peer digital currency that enables you to easily send money online.” That same definition could be applied to other more established cryptocurrencies including Bitcoin, Ethereum, or Litecoin. Cryptocurrencies started gaining popularity as alternatives to traditional currency in the early 2010s. They allow money to be transferred from one person to another without using a bank, and many people believe they make for a safer and more democratic financial system. Bitcoin was launched in 2009, and today there are thousands of other “altcoins” out there.
What is the latest news about Dogecoin?
Elon Musk just keeps tweeting positively about Dogecoin, and now Mark Cuban has joined him in supporting Doge on social media. Even Gene Simmons and Snoop Dogg have gotten in on it.
In fact, as of March 4, the Dallas Mavericks are accepting Dogecoin as payment; this is through a partnership with BitPay. And on March 6, Dogecoin will be back on a NASCAR car, this time the No. 99 car driven by Stefan Parsons.
On March 1, the cryptocurrency ATM provider CoinFlip added Dogecoin to its portfolio of available coins on its 1,800 ATMs across the U.S.
What is the price of Dogecoin?
For years, the price of a Dogecoin remained at a fraction of a penny. It finally crossed the penny threshold in January 2021, soared to a high of nearly $.09 on February 7, and was trading at $.05 as of March 1. What sparked the 2021 surge? Much of the credit goes to pro-Dogecoin tweets from Elon Musk, who has called Dogecoin “the people’s crytpo.” Other celebs, including Snoop Dog, Gene Simmons, and Mark Cuban, have showed their support of Dogecoin on Twitter as well.
Dogecoin was also talked up by Reddit users as part of the stock-price pumping campaign that included GameStop and other heavily shorted companies. For price comparison, on March 1, Bitcoin was trading at about $49,000; Ethereum at about $1,500; and Litecoin at about $175. So, with Dogecoin we’re not talking big money, but 9X growth is 9X growth (!), and professional investors, and the media, have taken notice.
How do I buy Dogecoin?
It’s fairly easy to buy Dogecoin. These are the steps to take:
- Get a Dogecoin wallet for your desktop computer or mobile phone (e.g., Exodus, Coinbase Wallet)
- Locate your Dogecoin address
- Find a Doge exchange (e.g., Binance.us, Kraken – Note: Binance.us is only available in 40 out of 50 states, and Kraken is available in all states except New York and Washington.)
- Buy Dogecoin
- Withdraw your Dogecoin
How can I invest in Dogecoin?
If you live in New York or Washington state and can’t by Dogecoin on a crypto exchange or you just want to invest in Dogecoin the quickest and simplest way possible, you can buy “DOGE” on Robinhood, which is one of the few platforms that offer Dogecoin trading in the U.S. (Note: the product you’re buying on Robinhood is not an actual coin that you can put in a wallet or withdraw — it’s more like an “interest” in Dogecoin that acts like a stock.)
If you have a Robinhood account, simply type “DOGE” into the search (the magnifying glass) and enter the amount of money or shares you’d like to buy. (You may first have to click on an agreement because Robinhood Crypto is separate from Robinhood Financial.)
How do you use Dogecoin?
Like other cryptocurrencies, Dogecoin is used with a wallet on your laptop, your smartphone or a website. Although technically you can use it to buy goods and services, few businesses actually accept Dogecoin. (Bitcoin, on the other hand, is now accepted by many major companies, including AT&T, Microsoft, Newegg, Overstock, and Shopify.) One of the most popular uses for Dogecoin is members of the Dogecoin community on Reddit “tipping” fellow members who share good content. For now, Dogecoin is mostly just traded—bought and sold—like a stock.
How do you mine Dogecoin?
Like every cryptocurrency, Dogecoin has its own ledger, or blockchain, on which all transactions are recorded. New coins are released as a reward to anyone who checks a block of transactions and adds them to the chain. But it’s not that easy—you need a lot of computing power with specific hardware and software in order to win coins.
Is Dogecoin safe to invest in?
You can’t lose much if you don’t invest much, so it’s less risky if you start out small. Mark Cuban recently compared buying Dogecoin to buying a lottery ticket, saying he preferred Dogecoin—not because it has a greater chance of getting you rich but because it provides a lesson in economics. Still, the lottery comparison is apt—Dogecoin may never have an actual use like a Bitcoin does, but who knows? And who knows how high (or low) it’s price could go, regardless.
How is Dogecoin different from / similar to Bitcoin?
The main difference in structure between Dogecoin and other cryptocurrencies, including Bitcoin, is that it is inflationary rather than deflationary. That means that there is no limit to the amount of Dogecoin that will be released and able to be mined. (There are already billions of Dogecoins in circulation, which is a big reason for its super-low price.) Bitcoin, by contrast, has a circulation cap of 21 million coin — once that number of Bitcoins has been released, that’s it.
As noted above, Dogecoin has a small but loyal following that sets it apart from most other cryptocurrencies — the dog mascot sets the fun and friendly tone. The Dogecoin community, mostly on Reddit, has banded together to help their own (donating Dogecoin to people who lost theirs in a hack in 2013); for good (raising money to build a well in Kenya in 2014); and for fun (raising enough money to sponsor the 2014 Jamaican Bobsled Team and Indian Olympic luger Shiva Keshavan, as well as a NASCAR car — No. 98, driven by Josh Wise).
And while the price of Dogecoin may not be much, the community has played a big role in its growth. They love to promote their favorite coin, and they use language not unlike a particular Shiba Inu. Much wow.