The complete guide to buying Dogecoin (DOGE)
Despite being born as a joke, mocking the crypto world, Dogecoin is now a top 10 cryptocurrency.
It edges out some major competition to take a top 10 spot, including names like Litecoin, Bitcoin Cash, Tron, Tezos and Uniswap.
Dogecoin began life as a fun and cheaper alternative to Bitcoin, a legacy that it still clings onto today.
Over the years, Dogecoin has gone on to grow an incredible following, even managing to attract celebrities such as Elon Musk to join the Doge train.
The Dogecoin community is arguably better than the cryptocurrency and is known for its generosity.
Back on 25 December 2013, the platform Dogewallet was hacked, and the hacker modified the send/receive address to a static wallet.
More than 30 million Doge was stolen during the hack.
But the Dogecoin community rallied around those hit by the hacker, starting a fundraising effort to help those recover their losses.
Dubbed SaveDogemas, the fundraising secured enough Doge to repay everyone that was affected.
The Dogecoin community has raised funds for other causes as well, some of them very noble indeed.
On 19 January 2014, the Dogecoin community raised $50,000 to send the Jamaican bobsled team to the Sochi winter Olympics.
On the back of this, the Dogecoin community then raised more than $30,000 to build a well in the Tana River basin in Kenya to provide clean drinking water to locals.
There are few crypto communities out there that can boast this level of philanthropy, and it’s an integral part of the Dogecoin world.
What is Dogecoin and how does it work?
Dogecoin is a fork of Luckycoin, which is a fork of Litecoin which is a fork of Bitcoin.
As a result, Dogecoin has a lot of improvements that make it faster and cheaper to use than Bitcoin.
Under the hood, Dogecoin opts for a Scrypt mining algorithm on top of a proof-of-work consensus mechanism.
This means that it requires less energy to mine than Bitcoin with its SHA-256 algorithm.
It began life with a total supply cap of 100 million coins, but the developers decided to scrap this and make it an inflationary currency.
On the back of that, a lot of miners left the network, and it caused the hashrate to drop.
So, to bring the miners back. Dogecoin implemented auxiliary mining, which allows miners to mine Litecoin and Dogecoin at the same time.
Dogecoin’s blocks are set at 1-minute intervals, which makes Dogecoin significantly quicker than Bitcoin and other cryptocurrencies.
What can Dogecoin be used for?
Dogecoin has been on a wild ride since it launched in 2013, going from fame to lame and back to fame again in that short space of time.
As a result, more and more businesses are starting to accept Dogecoin.
This means that you can then use your Dogecoin to buy real world items.
Thanks to Elon Musk and his Dogecoin promotion Tweets, more people are aware of Dogecoin than ever before.
Dogecoin is a cryptocurrency used to facilitate payments, so that’s its only real use.
Interestingly, Ren decided to create a wrapped Doge and launch it on the Ethereum blockchain.
This new renDOGE can then be used to take part in the decentralized finance (DeFi) hype.
It’s an unexpected use case for Dogecoin, but it gives you more excitement for your doggy friends.
What is the Dogecoin blockchain?
The Dogecoin blockchain is a proof-of-work blockchain that uses a scrypt mining algorithm.
It features a 1-minute block time which allows for transactions to pass quickly.
Most exchanges and wallets will require a significant number of confirmations owing to the speedier blocks.
But it’s still quicker to use than Bitcoin and other big-name cryptocurrencies.
The first Dogecoin block was mined on 8 December 2013.
The Dogecoin blockchain is built in such a way that transaction fees remain as low as possible, but there’s also very little utility outside of payments.
This means that if you want to make quick and cheap payments, then Dogecoin is very well suited.
However, if you want to do more with the blockchain, then Dogecoin stumbles.
Dogecoin was created as a parody to Bitcoin and the general crypto hype back in 2013, so it comes as no surprise that there’s no real use or development in terms of features on the Dogecoin blockchain.
In many ways, it’s a Frankenstein of blockchain technology, cobbling together various features from other blockchains using the Bitcoin codebase.
During the early days of Dogecoin mining, the blockchain would freeze and stall when miners went offline.
This would be because the difficulty rate was set too high for the available hash rate.
So, Dogecoin implemented DigiShield which automatically adjusts the block difficulty after every block.
This keeps the blockchain ticking over and running efficiently without any stalling.
What is a Dogecoin wallet?
There are hundreds to choose from, but some are slightly better than others.
However, the wallet you use to store your Dogecoin depends on your needs and use case.
If you like to transact frequently and are open to a bit of risk, then a mobile wallet is a good option.
On the other hand, if you are planning on holding Dogecoin for a significant period of time, then you should opt for a cold wallet.
Dogecoin also provides its own set of wallets that are free and easy to use.
The most secure Dogecoin wallets are:
- Ledger Nano S
- Trezor Model T
If you would rather use an official Dogecoin wallet, then there are 2 you can pick from.
Dogecoin Core is a more advanced and heavier Dogecoin wallet that requires you to sync the entire blockchain before you can use it.
Given that the blockchain is currently more than 50GB, it might not be the best idea for everyone.
The other option is MultiDoge which is more lightweight.
How does a Dogecoin transaction work?
Before you buy Dogecoin, you might have some questions.
One such question is “how does a transaction work?”
Understanding how transactions work allows you to better prepare yourself for when you start making Dogecoin transactions.
Fortunately, it’s actually rather simple.
When you go to make a Dogecoin transaction, you’ll open up your wallet containing your Dogecoin.
Then, you’ll want to hit send.
You’ll then be presented with a neat little set of fields to fill in, such as the recipients address, how much Dogecoin you want to send, and if you want to add a message.
You can type in or paste the wallet address that you wish to send the Dogecoin to.
If you’re using a mobile wallet, you can also scan a QR code.
If you type in the address or paste it, make sure that you triple check the address is correct.
Hackers can inject code into your device that alters the paste feature, while when typing you can make a human error.
It takes 30 seconds to verify the address is correct and will save you heartache down the line.
Once that’s done, enter the amount you wish to send, add any messages you want and hit send.
Depending on your wallet and settings, you may need to enter a code.
Once you verify this, the transaction will make its way to the blockchain.
Being a proof-of-work blockchain, your transaction will head to the Dogecoin mempool.
The Dogecoin mempool is usually relatively quiet thanks to the 1-minute blocks.
Once the next block is created, your transaction will move up the queue until it’s added into a block by a miner.
Once you’re in a block, your transaction is completed.
The Dogecoin you sent might take a while to show up in the other wallet as most wallets require confirmations.
A confirmation is another block added to the chain that your transaction was included in.
This prevents double spending attacks and other complications.
Congratulations – you just made a Dogecoin transaction!
How does a Dogecoin address work?
A Dogecoin address is the reference for your wallet.
Think of it like your home address.
If someone wants to send you mail, they put your address on the package.
The postal system then works its magic and gets the parcel to your address.
Dogecoin addresses work in the exact same way, only that it’s cryptocurrency on a blockchain rather than a package in the mail.
The string of letters and numbers is known as your public key.
You can opt to use the same address every time, or you can generate a new address for every transaction.
The address is then linked to your wallet, so you can have multiple addresses all feeding Dogecoin into the same wallet.
This is a great feature to take advantage of if you’re looking to be a bit more private and secure.
For example, let’s pretend you’ve got 2 Dogecoin addresses and only 1 wallet.
If Jane sends 50 Doge to address A and Dave sends 70 Doge to address B, your wallet balance will be 120 Doge.
But, if Jane looks up address A, the only address she’s aware that you have, she’ll see that you have 50 Doge.
The same goes for Dave.
He’ll only know that you’ve got 70 Doge.
This is how you can remain more private when using Dogecoin.
Are there any risks with Dogecoin?
Dogecoin is an incredibly volatile cryptocurrency and it’s easily manipulated.
A single Tweet from Elon Musk can send Doge to the moon or send it crashing.
So, the first risk you need to be careful of is this extreme volatility.
All cryptos are volatile, but Dogecoin is up there as one of the most volatile.
Millions can be turned into pennies in an instant, but pennies can also be turned into millions.
Dogecoin’s volatility is a double-edged sword that should be handled with care.
Dogecoin isn’t for the faint hearted, as quick pumps and dumps will wreak havoc on your sanity.
Next up is security.
Your Dogecoin is only as safe as your weakest security link.
You can boost your security by following a few simple steps.
Make sure that you use a unique password for every account that you have, and every wallet that you use.
Next up, turn on 2-factor authentication (2FA) for sending transactions.
In the event that someone does manage to take over your wallet, if they don’t have access to the 2FA device then they can’t move your funds.
Ideally you use an authenticator app like Google Authenticator or Authy rather than email or SMS.
Finally, store your seed phrase somewhere secure.
Write it down by hand and lock it away in a secret location.
This is the restoration key that can be used to recover your wallet.
That means that anyone with your seed phrase can load up your wallet on their device.
Don’t take any risks when it comes to keeping your Dogecoin safe.
Spend the time and put in the hard work to keep it secure.
After all, it’s your money on the line!
Is Dogecoin legal?
Dogecoin was originally labelled as a pyramid scheme when it first launched.
Users were incentivized to get more users onboard as the increase in demand meant that their stacks were worth more.
But, as time went on and Dogecoin got a couple of uses on the internet, those claims faded away.
Dogecoin is a utility token in the sense that it’s used to make transactions.
Nothing more, nothing less.
As a result, it’s more than likely legal, even if governments don’t count it as legal tender.
If someone wants to accept Dogecoin in exchange for goods or services, then that’s a legal transaction.
Dogecoin isn’t regulated or approved by any governments.
So, treat Dogecoin as legal until an entity bans it or proves that it’s doing something nefarious.
Is it safe to buy Dogecoin?
If you are looking to buy Dogecoin, you’ll likely want to know if it’s safe.
Well, we’ve got some great news for you – it is safe to buy Dogecoin!
Now, there are a few caveats to that, but for the most part, you’re totally fine.
As long as you’re using a reputable exchange and you don’t leave your Dogecoin on the exchange for too long, then you’ll be fine.
If you buy from a shady exchange or meet a crazy guy in a dark alley, you could run into some safety issues.
The shady exchange could take your money or steal your identity if you complete a verification process.
On the other hand, a crazy guy in a dark alley could take your money, or your life.
So, be sensible and you’ll be safe when you buy Dogecoin.
Can someone hack me or steal my Dogecoin?
Technology is hackable.
There’s a way to hack anything on this planet, if someone has the skills and time.
So, if someone wants to hack you and steal your Dogecoin, they could if they wanted to.
There’s no way to stop it.
If it’s going to happen, it will happen.
Even if you have security up the wazoo, you can still get hacked.
But for your average Joe that has a couple thousand dollars in Dogecoin, following cyber security best practices should be enough.
What we mean by that is you make it hard enough that low level hackers are disincentivized to hack you.
Simply put, this means you make it just hard enough that it will take a hacker too long to hack you for the potential reward.
But, again, if someone really wanted to hack you for your $2,000 of Doge, they could.
So, follow the cyber security best practices and you’ll be relatively safe.
By doing the following tasks, you’ll make yourself a lot harder to hack and reduce your chances of getting hacked:
- Use unique passwords for all websites, wallets and apps
- Use a 2-factor authentication app for all accounts
- Never brag online about how much crypto you have
- Don’t click suspicious links in emails and messages
- Triple check URLs before logging in
- If it sounds too good to be true, it usually is
How can I buy Dogecoin?
So, you’re sold on Dogecoin, and you want to buy Dogecoin – great!
The steps to buy Dogecoin are incredibly easy, so don’t panic at all.
You’ve got 2 options when it comes to buying Doge, but one is far safer than the other.
Using an exchange is the fastest, best, and safest way to buy Doge, but you can also buy Doge in person.
Let’s teach you how to buy Doge!
Buy Dogecoin with an exchange
The best way to buy Doge is with an exchange.
But, not all exchanges currently support Dogecoin, which can be a bit of a pain.
The following exchanges all accept Dogecoin:
Once you’ve signed up at one of these exchanges, you can then make a deposit.
Make your deposit as per the instructions in our review of that exchange, then convert your funds into Bitcoin.
Then, you can search for Dogecoin in the markets section on the exchange and select it.
Then you simply input how much Dogecoin you wish to buy and confirm it.
Very few exchanges have fiat Dogecoin pairs, and this is why you’ll have to swap into Bitcoin first.
Buy Dogecoin in person
If you don’t particularly want to use a crypto exchange to buy Doge, you might be able to find a person that’ll be willing to meet up with you.
In this case, you can agree with a person to buy Dogecoin from them.
Your best bet of finding these types of people is in Dogecoin forums.
But, if you opt to meet someone in real life to buy Dogecoin, make sure you are safe.
Arrange the meeting in a public place and always take a friend with you.
If possible, keep the cash just around the corner with a second friend.
Once you know you can trust the other person, ask them to come with the cash.
This is very risky, and people have been killed in these types of crypto deals.
So, use this as a last resort.
How can I pay for Dogecoin?
When you go to buy Dogecoin, you’ll need to pay for it.
Fortunately for you, there are many different payment methods that can be used when buying Dogecoin.
Depending on which exchange you use to buy Dogecoin, you’ll be faced with a different set of payment methods.
So, we’ll run you through the most common, giving you a good overview of the current market.
The number 1 choice of payment methods to buy Dogecoin is credit or debit cards.
Deposits to crypto exchanges are instant, meaning you can get stuck into the Dogecoin action ASAP.
There’s no waiting around, which is perfect for those of you that are a little bit impatient.
To make a deposit with your card and buy Dogecoin, you simply need to head to the deposit page of the exchange you’re using.
Pick card as your payment method and fill in the information.
There will usually be a fee to use your card to deposit, but certain exchanges, like Binance, will waive this fee.
Once you’ve made your instant card deposit, you can navigate to the Dogecoin market and spend all your fiat on glorious Dogecoin.
It’s quick, easy, and convenient to buy Dogecoin with your card!
However, if you live in a country with a banking ban on crypto, you won’t be able to use your card.
In fact, it will be virtually impossible to buy Dogecoin in this case, so you’ll have to get creative.
If you are able to use a bank to buy Dogecoin and you don’t mind waiting a few days, then a bank transfer might be for you.
Bank transfers are great for large amounts of money, and they’re free to make.
However, you will have to wait up to 3 working days for the deposit to clear, which is a bit frustrating if you’re in a hurry.
Once you’ve made the deposit via bank transfer, you can head on into the Dogecoin market and hit buy.
Again, if you’re in a region that has a banking ban on crypto, you will have to get creative.
Some crypto exchanges allow you to deposit using PayPal.
This is a fantastic way to get around banking bans as you can top up your PayPal account, then fund your exchange account with your PayPal balance – take that, banks!
PayPal deposits often come with a fee attached, but there are a few exchanges that waive the fee.
Once you’ve picked PayPal as your deposit information, you’ll log in to your PayPal account like you would for any purchase using it.
Then, once the deposit has cleared into your account you go about buying Dogecoin as you would any other currency at the exchange.
Next up we come to cash.
People say that cash is king, but we all know who the real king is – Dogecoin.
There are 2 ways you’ll be able to use cash to buy Dogecoin, and both are a fair bit of work.
First up, you can arrange to meet someone from a Dogecoin forum and swap Dogecoin for cash.
This is rather risky as the internet is full of crazy people, and some of those people will kill you for your money.
So, take friends with you and meet in a public area.
Next up, if you’re in Canada you can head down to your nearest Canada Post office and make a deposit into your Kraken account with cash.
You can then use that to buy Dogecoin directly from Kraken, which is neat.
However, this option is only available for Canadians.
Are Dogecoin profits taxed?
If you’ve managed to time the markets to perfection, you’re probably on top of the world.
There’s no better feeling than making a boat load of cash from the crypto world.
But, then you get a sinking feeling – what about the tax man?
Do you have to pay tax on your Dogecoin profits?
It all depends on where you live and how long you’ve held Dogecoin for.
If you live in a country where capital gains tax exists, then you pay that rate.
The upshot of this is that if you make a loss, you can claim it back under capital losses.
Some countries will have specific crypto tax laws, which can make your life far simpler.
For example, Australia, Germany, and Malta will reduce the tax payable on your Dogecoin gains by up to 100% if you hold it for more than 1 year.
On the other hand, if you live in a country where tax doesn’t exist, then you don’t have to pay any taxes at all – now that’s living the dream.
You can learn more about crypto taxes here.
Is it a good or bad idea to invest in Dogecoin?
Dogecoin sounds like a great investment on paper.
It’s still below €0.50, which sounds cheap.
But, it doesn’t have any real world use case or application that drives it forward.
It was created as a joke.
It’s constantly manipulated by Elon Musk and other big personalities.
The community is fantastic, but it doesn’t serve a purpose anymore.
There are other payment-focused cryptocurrencies that do a better job and have a greater adoption level.
That being said, it’s never a bad idea to stick a small chunk of money behind the Doge.
Who knows, perhaps Elon Musk can pump Dogecoin to the moon.
That’s one rocket that you don’t want to miss out on.
If you have a high appetite for risk, then Dogecoin might be a great addition to your portfolio.
Its wild volatility could play in your favor and net you a healthy profit.
But, if you don’t want to play a risky gamble, then Dogecoin likely isn’t for you.
Can I trade Dogecoin with leverage?
Trading on leverage is not the brightest idea at the best of times.
So, pairing leverage trading with an incredibly volatile and manipulated crypto like Dogecoin is a recipe for disaster.
But, that doesn’t mean you can’t do it if you don’t want to.
If you get on the right side of the hype and the manipulation, you could make a fortune.
You can trade Dogecoin on leverage at all exchanges that support leverage trading and Dogecoin.
Your best bet here is to use Binance as it offers up to 100x leverage.
But do be warned.
Trading Dogecoin at 100x leverage is suicide if you don’t know what you’re doing!
Use extreme caution.
Can I day trade Dogecoin?
For the day traders out there, Dogecoin is a fantastic opportunity.
It has wild daily swings and the manipulation in the market can open up great pockets of potential.
An hourly change of 10% is a common occurrence.
So, if you’ve got the time to spend, and the experience, day trading Dogecoin can be a very profitable activity.
You’ll want to use an exchange with low fees in order to make the most out of your daytrading activities.
Timing the market is one part of the battle.
Finding the lowest fees is the other half.
If you pick an exchange with low fees, day trading Dogecoin profitably is feasible.
Is Dogecoin a good long-term investment?
Dogecoin is an exciting and happy cryptocurrency with an amazing community.
The community has been through the good and bad times, so it’s plausible to think that they’ll still be there through the next bear market.
Dogecoin can’t really go much higher than €0.50 this bull cycle without some major assistance from space lord Elon Musk.
So, if you do buy Dogecoin right now, you could have to wait a while to make your money back.
Dogecoin also isn’t really growing or developing, which is part of the reason the price rises so erratically.
Throw in the infinite supply and it sounds like a recipe for disaster.
But, somehow Dogecoin keeps on fighting back and rising up the ranks.
If you don’t mind a bit of a risky hodl, Dogecoin could pay you back in a big way.
It’s a very risky move, but if you don’t mind not seeing the money for a few years, then Dogecoin is a potentially good long-term investment.
Dogecoin VS. other cryptocurrencies – How does Doge measure up?
Dogecoin doesn’t have too much going for it, other than its fantastic and loyal community.
Companies aren’t rushing to adopt it, nobody is building on it and it’s not adding in new features.
As a result, it’s fallen behind in terms of tech – but that’s fine.
Dogecoin was never meant to be anything more than a poke at the crypto world.
There are other cryptocurrencies that are far superior when it comes to payments.
So, if you’re looking to back the future of the crypto payments world, look at those.
If you want to have a bit of fun and join in with the Doge love, Dogecoin is an exciting option.
What does Dogecoin’s future price look like?
Dogecoin has blown everyone’s minds with its recent price gains.
But a lot of that is on the back of market manipulation.
Also, a large portion of the circulating supply is held by a handful of wallets.
This is a scary prospect as 1 selloff could crash the price to a point of no return.
However, if Musk remains true to his word and takes Dogecoin to the moon, Dogecoin’s price could also go to the moon.
It will never realistically be worth more than €5, but it could potentially see €1 in the next big push.
If Musk really does take Doge to the moon, we could see €1 in the medium term.
If you’re talking long-term, anywhere from €0.20 – €5 is possible.
It all depends on what market cycle we’re in at the time and how bonkers people have gone.
What is the supply and demand for Dogecoin like?
Dogecoin suffers heavily from the fact there’s no supply cap.
This means that an infinite number of Dogecoin can be mined and brought into circulation.
This does not bode well for its price, and any dip in demand will cripple its price.
Fortunately, there’s huge demand for Dogecoin right now thanks to the likes of Elon Musk.
But once that fades away and people forget about Dogecoin, the demand will fall off.
Throw in the ever-increasing supply and you’ve got a recipe for disaster.
If this ever happens, hodlers can kiss bye, bye to their savings.
Challenges ahead for Dogecoin
All cryptocurrencies have their fair share of problems and challenges ahead of them.
Fortunately for Dogecoin, a lot of those challenges don’t matter because it’s a cryptocurrency made for a bit of fun.
Nobody takes it too seriously so hopefully it shouldn’t run into too many issues.
Here are a few issues that Dogecoin could run into sooner or later.
Going green and being energy efficient is the latest trend.
There’s talk of Dogecoin changing up from a proof-of-work consensus mechanism to a proof-of-stake mechanism.
This is all in the name of making it more eco-friendly.
In reality, Dogecoin mining uses so little energy that it’s not a big deal.
With auxiliary mining in place, Dogecoin miners can also mine Litecoin at the same time.
This means the energy consumed goes towards helping 2 blockchains, rather than 1.
Laws and regulations
There was a lot of speculation about Dogecoin being a pyramid scheme at the start, and this could possibly come back to haunt it later in life.
If someone who got burnt in the early days really felt like it, they could try and sue Jackson Palmer for running a pyramid scheme, but it’s a bit far-fetched.
It likely wouldn’t get too far in the courts, but the negative PR could hurt Dogecoin.
No other cryptocurrency really compares to Dogecoin when you factor in its loyal community and army.
And this is what makes Dogecoin stand out from the crowd, driving it into the top 10 cryptocurrencies.
There are other payment-focused cryptos out there that are better than Dogecoin and with more potential, but their communities just can’t keep up.
If the Dogecoin community does fall away, then it could be replaced by one of the many new meme coins out there.
To Doge or not to Doge
It’s a tricky one really.
Dogecoin is a lot of fun, the community is great and the reason it was made is a good laugh.
It works well and isn’t too expensive to use, but that’s where the positives end.
It’s over manipulated, very few businesses accept it as a payment method and few exchanges list it as a trading option.
If Dogecoin doesn’t do something special in the coming years, it will likely fade away into the ether.
As much as we love Dogecoin, there are much better alternatives out there.
Dogecoin is all about having fun and having a good time.
Once the good times end, so too will Dogecoin.
Frequently Asked Questions (FAQ)
Dogecoin mainly rises in price because of hype.
Elon Musk loves to Tweet about Dogecoin, and when he does, it pumps in price.
Supply and demand plays a small part in this, but the supply currently outweighs demand and will continue to do so until the unlimited supply cap is removed
As it stands, only a few businesses accept Dogecoin as a payment method.
This limits what you can do with Dogecoin and what you can buy.
Dogecoin is heavily manipulated, meaning that predicting its price in the next half hour is tricky, let alone the long-term.
If the hype train continues to push Doge along, we could possibly see €5 in the future.
But just as we could see that price, if the hype train leaves Doge behind, it could sink down to less than €0.01.
Dogecoin is the brainchild of Jackson Palmer and Billy Markus, 2 software engineers.
The pair brought Dogecoin to life back in 2013 after forking the Luckycoin blockchain.
There’s a high probability that Dogecoin will crash in the future.
It’s propped up by hype, hopes and dreams rather than development, feature, and application.
If the Dogecoin developers can by some miracle add in more features and tech to the Dogecoin blockchain, it could survive for decades to come.