How to Buy Dogecoin
How to buy Dogecoin?
Dogecoin (DOGE) currently resides among the top ten cryptocurrencies in market capitalization. Since the start of the ‘Doge’ hype in the beginning of 2020, trading the cryptocurrency has become quite liquid and is available at most of the major crypto exchanges such as Binance, Coinbase, Huobi, Bitfinex, Bithump, KuCoin, but not Bitstamp. As Dogecoin is its own network running on its native blockchain, large DeFi exchanges such as Uniswap, SushiSwap, 1Inch or PancakeSwap running on Ethereum and other blockchains don’t support Dogecoin swaps on their protocols.
Why buy Dogecoin?
Considering that Dogecoin was created in a matter of hours as a joke currency to make fun of the crypto hype and even though it shares large chunks of its code base with established cryptocurrencies such as Bitcoin and Litecoin and Dogecoin hasn’t seen any developer activities for years. It is still prominent, it continues to make the news and make a lot of money for those who invested at the right time.
A lot of the hype around Doge comes from its close relation to the Doge meme and its popularity on platforms like Reddit and TikTok. Also, Elon Musk, one of the currently most influential people when it comes to tech trends, started tweeting about Dogecoin in 2019, stating that it might be his favorite cryptocurrency. A year later, he even posted a meme insinuating that Dogecoin would become the standard which the global financial system would run on. By the end of 2020 Elon Musk then admitted in a clubhouse chat that his occasional jokes about dogecoin “are really just meant to be jokes,” but that didn’t stop him from declaring his support for Dogecoin on many other tweets later on, even accepting Dogecoin as the payment for a SpaceX’s lunar mission and asking his Twitter audience, if Tesla should start accepting Dogecoin as well.
Read the guide: What is Dogecoin
How much is it worth?
All of this goes to show that Dogecoin’s insane price rally over the last two years seems to have been mainly driven by the support of a single tech billionaire and viral trends, tweets and posts on internet platforms. For investors, this raises the question why they should invest in such a coin. If solely looked at the technical specifications of the Dogecoin protocol, Dogecoin doesn’t seem like the obvious winner in a global currency race. But, as history has shown many times, it’s not always the technically most advanced who wins, but those who are in the right place at the right time. With a market capitalization of currently $20 billion (at times even $70 billion) and as the undisputed #1 among all meme currencies, Dogecoin can certainly no longer be dismissed as just a satirical joke project.
But Dogecoin investors should still be aware that their investment is not only in a protocol but much more in an internet phenomenon, an online community and a common narrative. Should the narrative hold up and even lure in more people, Dogecoin could prove to become the fun internet money that it is claiming to be and may even reach the moon ($1 per coin) one day. Should the Doge enthusiasm die away though, Elon Musk retract his support or another meme currency take its place, then the price of Dogecoin could collapse as fast as it surged and cause gigantic losses for late investors.
Where to buy dogecoin?
Dogecoin is listed on many large crypto exchanges such as Binance, Coinbase, Huobi, Bitfinex, Bithump and KuCoin where it trades against other cryptocurrency as well as fiat money. As one of the top ten currencies it records high liquidity and trading volumes. In order to buy Dogecoin on one of these exchanges, an account is needed that requires basic identification, and if larger amounts are traded, a complete verification.
The process is straightforward and similar to that of an online brokerage. You will be asked to provide your information such as name, address, an official public document (passport) and a proof of address (utility bill). Usually, this process takes only a couple of minutes.
Once you have the documents submitted, it will take 1-2 business days for your account to be verified and fully operational. Be sure to enable 2-factor authorization and other safety features (such as delayed withdrawals) when opening the account. This ensures that unauthorized access to your account and funds is significantly more difficult.
As already mentioned, Dogecoin runs on its own blockchain. For this reason, actual Dogecoin cannot be bought on decentralized exchanges within the Ethereum, the Binance Smart Chain or other blockchain ecosystems. What some DeFi exchanges offer though, are synthetic versions of Dogecoin, e.g. renDoge. This token represents tokenized Dogecoin on the Ethereum blockchain and tracks the price of Dogecoin.
In contrast to other coins like ETH, DOT or ADA, Dogecoin cannot be staked as its blockchain is not based on a Proof-of-Stake (PoS) but on a Proof-of-Work (PoW) algorithm. Whoever wants to earn virgin Dogecoin has to mine them in a likewise manner as Bitcoin or Litecoin are mined. Due to the grown popularity and the strong price increase, the network’s hashrate has significantly increased over the last 3 years. Therefore, to contribute notable hashrate to the network and earn a considerable amount of Doge, at least a powerful graphic card unit (GPU) is required to mine Dogecoin.
Read the guide: How to mine Dogecoin
How to safely secure your dogecoin..
Dogecoin can be held on the very exchange that it was bought on. Once the Dogecoin are bought, they can conveniently be left in the exchange account, no extra transaction to an external wallet is needed. Of course, this bears a counterparty-risk. Should the exchange be hacked, go bankrupt or be fraudulent, then the Dogecoin might be lost.
Whoever does not want to be exposed to this risk can alternatively store Dogecoins in a personal wallet. Because Dogecoin is a digital bearer instrument just like other cryptocurrencies, the option of taking self-custody is available for everyone. On Dogecoin.com, two wallets are available to download for Windows, MacOS and Linux computers. These wallets will sync with the Dogecoin blockchain to provide the newest ledger updates and allow for self-custody.
The MultiDoge Wallet is a “light” wallet, which syncs with the blockchain by “skimming” through the blockchain, providing fast sync times. DogecoinCore, on the other hand, is a “full” wallet. It syncs by downloading Dogecoin’s entire transaction history and provides a solid-working Dogecoin wallet.
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