What is Dogecoin And How does it work
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What is Dogecoin And How does it work
Dogecoin is officially the most popular crypto in America
Cryptocurrencies have been dominating the investment market since 2009. Bitcoin is the first crypto to enter the global market. And only this year Cryptocurrencies have further Improved the Financial Ecosystem.
The launch price of this crypto was only $ 1 in 2009… But, 10 years down the line the crypto now sells at $130k per coin. This is the incredible growth of cryptos in the past decade.
Other than Bitcoin, many other cryptos also made their entry into the global market. As of today, there are more than 4k+ coins in the global market.
What is Dogecoin: Let us understand
Dogecoin got its global launch in 2013. It was first created as a light-hearted coin and an alternative to other cryptos. The developers took its name and its logo from a popular meme.
The concept of Dogecoin is also simple. Unlike Bitcoin which has a limited supply, Dogecoin works differently. The coin has abundant supply in the market and a new coin is being mined every day.
As of 2021, Dogecoin became one of the top 10 valued currencies in the global market. The total market volume of this currency now trades up to $50 billion.
Every 24 hours, the currency trades at a market volume of more than $900 million. At the time of making this article, the total supply of Dogecoin is 133 billion.
Uses and features of Dogecoin
Let us understand a few key features that make Dogecoin different from others.
The supply is infinite
Unlike traditional cryptocurrencies, Dogecoin does not have any upper limit on its supply. Daily, data validators are mining Dogecoin. As per market analysis, approximately 1440K Dogecoin is mined daily.
These coins are then opened to the global market for investments and also as rewards to its client base. The current price of Dogecoin is $0.24 per token.
Decentralized finance and its advantage
Every cryptocurrency works on the decentralized finance model. This means the security of every crypto is in the hands of its users across the globe. In Dogecoin, the decentralized model works through the various nodes in its network.
The major share of Dogecoin is under the custody of a few investors
In most cases, the Dogecoin wallets control the supply of Dogecoin. More than two-thirds of the Dogecoin in supply is through wallets less than $0.002%. But in the case of Bitcoin, the scenario is completely different. There is an even distribution of this coin globally.
How does this crypto work?
Like every other cryptocurrency, Dogecoin also uses blockchain technology. This is the same concept as other cryptos. The blockchain makes use of cryptography to ensure that all transactions are secure.
The data mining of Dogecoin makes use of the proof-of-work method. Every data miner works on complex mathematical problems to process each transaction.
Such transactions are then validated and recorded onto the user computers. These data miners in turn gain rewards tokens in Dogecoin. Such reward tokens can be undertaken for trading activities in the global market.
As compared to other cryptos, the data mining activity is easy and simple. Data miners can undertake data validation in minimal time. This also makes it easier to process payments.
Give a simple comparison check. Bitcoin takes more than ten minutes to complete a transaction. The same is undertaken in less than a minute with Dogecoin.
Another popular reason for the increasing interest in Dogecoin is the tweet by Musk. Tesla has made it official that they will be accepting Dogecoin payments.
Customers can buy Tesla merchandise using Dogecoin through their official website. It was also clarified that the payment gateway accepts crypto payments.
Is Dogecoin a good investment for 2022?
Given the current market price and increasing demand, Dogecoin is a good investment. Developers are also working on bringing technical advances. There is also increasing acceptance of cryptocurrencies globally.
Dogecoin is today listed on most crypto exchanges. You can simply log on to the crypto exchange and pick your required quantity. Binance and eToro are a few popular exchanges to choose from.
While Dogecoin is a good investment, there is also a need to consider price volatility. It is always important to study the market conditions before making your investments.
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