There’s no doubt that cryptocurrencies are all the rage right now. Every day, it seems like a new coin is hitting the market, and investors are scrambling to get in on the action. Dogecoin, as we all know, has been taking over the news as the meme coin of the future. So, is it worth investing in Dogecoin? In this blog post, we’ll take a closer look at Dogecoin and see how its performance compares to other popular cryptocurrencies. Stay tuned for more information!
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What Is Dogecoin?
Dogecoin (DOGE) is a cryptocurrency that allows for peer-to-peer transactions. It is open source and was launched in December 2013 with the image of a Shiba Inu dog as its logo. Dogecoin’s blockchain has been deemed successful due to it being derived from Litecoin technology.
Some notable features of Dogecoin include its low price point and unlimited supply, both enabled by the coin using a script algorithm.
One of the main benefits of Dogecoin is its low price point. Compared to other popular cryptocurrencies like Bitcoin and Ethereum, Dogecoin has a much lower market capitalization, which means that it can be purchased at a more affordable price point.
Additionally, Dogecoin is characterized by its unlimited supply, meaning that, unlike some other coins out there, there will always be new units of Dogecoin available for purchase. This makes it an attractive investment option for many cryptocurrency investors.
Dogecoin was initially created as a meme but quickly blew up in popularity. By the end of 2017, it had gained enough value to participate in the cryptocurrency bubble that saw many digital coins skyrocketing in price.
Dogecoin took a hit in 2018 when it lost much of its value, but it still has a loyal following who trade and use it to tip for content on Twitter and Reddit.
Overall, it seems that Dogecoin is poised for continued growth in the coming months as more people become interested in investing in cryptocurrencies.
How Does Dogecoin Work?
Dogecoin is a cryptocurrency that you can buy, sell, or transfer. You can also use it to make purchases at some businesses (although not many accept Dogecoin or any other cryptocurrencies). Its transactions are recorded in a decentralized digital ledger called a blockchain.
Dogecoin, similar to Bitcoin and other cryptocurrencies, utilizes the proof-of-work method. To validate transactions, Dogecoin miners must solve complex mathematical equations with devices that have high computing power. Once a transaction is verified and recorded on Dogecoin’s blockchain, the miner receives payment in Dogecoin.
Dogecoin is more energy-efficient than Bitcoin, which means that Dogecoin mining doesn’t have the same negative environmental impact as Bitcoin mining.
Dogecoin has faster and cheaper transactions than Bitcoin, but it isn’t the only cryptocurrency that does. In fact, many other types of cryptocurrency have even lower transaction fees and processing times.
What Do You Need to Invest in Dogecoin?
Dogecoin can be purchased by opening an account with a cryptocurrency exchange. Here, buyers and sellers meet to trade Dogecoin for dollars. Some popular exchanges that offer simple-to-use platforms with higher fees are Coinbase, Binance.US, and Kraken. Others like advanced traders better because the platform has lower fees but is more difficult to use.
If you’re new to the crypto world, investment apps like Robinhood make it easy to get started. However, a key thing to keep in mind is that this app may not allow you to transfer your coins off of the platform. For some investors, this isn’t ideal as they prefer to move their crypto into different wallets for safekeeping – meaning they would have sold their coins and then rebuy them on an exchange just so they can be moved again. In other words, if you’re considering transferring your funds to a different wallet, it’s probably best to do so through an exchange.
Acquiring Dogecoin is safest when you buy it through an exchange. For example, Binance or Coinbase. Let’s dig in deeper on how to invest in Dogecoin using Binance:
1. Create a Free Account on the Binance Website or the App
There are three ways you can register for a Binance account so that you can start buying crypto, including Dogecoin (DOGE). You can register:
- Via the Binance App
- On the website, using your email address, or
- On the website, using your mobile number.
2. You Have the Option to Purchase Dogecoin (DOGE) Using the Method of Your Choice
Left-click on the “Buy Crypto” link located on the top left of the Binance website navigation; this will show you all the available options for buying crypto in your country.
You can purchase Dogecoin in three ways: through credit or debit cards, through peer-to-peer transactions, or through bank deposits.
NOTE: For more compatible coins, it is advised that you purchase a stablecoin like USDT or BUSD first and then use that coin to buy Dogecoin (DOGE).
3. Confirm Your Purchase
You have 60 seconds to confirm your order at the current price. After that, your order will be recalculated based on the market price at that time. If you want to see the new order amount before confirming, click Refresh.
4. Store or Use Your Dogecoin (DOGE) in Binance or Transfer to a Decentralized Wallet
After you’ve bought your crypto, you have the option to store it in a personal wallet or leave it in your Binance account. You can also trade for other types of cryptocurrency or stake it on Binance Earn to receive passive income. If you’re interested in trading your Dogecoin (DOGE) for tokens on a decentralized exchange, Trust Wallet is worth checking out – it supports millions of assets and blockchains.
How to Invest in Dogecoin?
Sign up for Dogecoin Exchange
Download a Dogecoin wallet application on your phone. The Dogecoin team is responsible for developing and maintaining the Dogecoin core wallet and MultiDoge wallet. These applications safely store all your Dogecoins to make transactions more secure.
Create Dogecoin Wallet
Your Dogecoin address is a long string of characters that always starts with a capital ‘D,’ followed by any other capital letters or numbers. It serves as your identifier when making Dogecoin transactions from your wallet.
Connect Your Wallet to a Bank Account
To get cryptocurrency from a crypto wallet to a bank account, one should send their cryptocurrency of choice from their decentralized crypto wallet to their wallet linked to a centralized exchange. For example, send Dogecoin from a MultiDoge wallet to their wallet at Binance and then from Binance to their bank account.
Place Your Dogecoin Order
After you have a plan, go to “REQUEST COIN” and enter the number of coins needed from another Dogecoin wallet user. The value of the requested Dogecoin will be displayed in your national currency.
In order to request an amount from another user, have them scan the barcode below their application interface. This is the same process as sending a Dogecoin order but clicking the “SEND COIN” icon.
Manage Your Dogecoin Investments
Once you have your Dogecoin in a web wallet or smartphone application, you can use it to purchase other cryptocurrencies on an exchange. If you’d like to get passive income from staking, hold onto your Dogecoins and stake them using the Binance Earn platform. You can also trade them for other currencies on decentralized exchanges, such as Trust.
Is Dogecoin a Good Investment?
Dogecoin is an advantageous cryptocurrency to invest in during a market crash;13,600% growth was seen by those who invested early on in 2021 and cashed out five months later. Much has occurred since then for Dogecoin up until the present day.
For example, in April 2022, Elon Musk’s bid to buy Twitter caused the meme coin’s price to increase. This was completed in October and resulted in investors looking for the best Altcoins and also deciding to buy Shiba Inu, which witnessed a 30% increase. Moreover, Musk’s filing to allow a payments platform enabled Twitter as well.
Elon Musk cryptically hinted that DOGE might soon be accepted as payment. This set the crypto world on fire and sent the price of DOGE soaring yet again. In related news, Elon has also submitted an application for Twitter to be classified as a money service firm. If successful, this would enable users to transfer and receive funds through the social media platform.
While it is difficult to predict exactly how much Dogecoin will continue to rise in value, there are many indicators that suggest that it could be a promising investment option for those looking to diversify their cryptocurrency portfolios. So if you’re thinking about investing in Dogecoin, now might be the time to do so.
Dogecoin vs. Other Investments
The main benefit that Dogecoin has in comparison to Bitcoin is its speed. The rate of transactions on this network is faster than Bitcoin, making Dogecoin more advantageous. Since Dogecoin costs less, people can have numerous amounts; however, part of the “meme effect” permits heavy ups and downs reflected in the market value. Consequently, there have been both large gains and losses experienced with Dogecoin over time.
The price you pay for speed is a lack of security. Dogecoin’s network isn’t as stable as Bitcoin’s, and because there’s no maximum amount of Dogecoin that can be mined, the currency is inflationary by design. Additionally, the coin started as a joke, and its value still largely depends on social media buzz.
Dogecoin is one of the first cryptocurrencies that was based on a meme. Like most memes, there are moments of high popularity (and value) followed by long stretches of irrelevance. So to trade Dogecoin successfully, you must be aware of what’s happening on social media platforms like Reddit and Twitter. You should also know that the price of Doge is still matched with the trend of Bitcoin, so it wouldn’t shoot up drastically when BTC is on a massive downtrend.
The Pros of Dogecoin Investing
1. Dogecoin Is Decentralized
Cryptocurrencies have been in the news a lot recently, and their recent collapse has shown that decentralization is important. Decentralized cryptocurrencies don’t have a single point of failure, which makes them more valuable. Ethereum is one example of a cryptocurrency that’s valuable despite its slow speeds and high fees.
Dogecoin is another decentralized cryptocurrency that’s widely available and easy to mine. This means there are people all over the world supporting the Dogecoin network, making it more stable than other coins.
As more investors start to see the benefits of investing in decentralized cryptocurrencies, Dogecoin could potentially benefit immensely. With its high level of decentralization, Dogecoin is one of the safer cryptos to buy now and hold for the long term.
2. Dogecoin’s Convenience for Daily Transactions
The long-term growth of cryptocurrency depends on adoption rates. When the initial hype dies down, this is what will continue to drive prices up.
Cryptocurrencies that are good for everyday transactions have low transaction fees. For example, Dogecoin’s fees are almost non-existent when compared to other well-known cryptocurrencies like Bitcoin or Ethereum. Not only that, but Dogecoin transactions are also very fast and usually confirmed within a few minutes.
In addition, because Dogecoin is decentralized, users are guaranteed that their transactions cannot be censored. This is unlike when using centralized systems, such as banks.
All of these features make Dogecoin a smart cryptocurrency investment for an investor who believes in cryptocurrencies’ future potential. That’s because the more Dogecoin is adopted as a payment method, inflation will become less and less of an issue due to high demand.
Dogecoin has already gained traction in the business world, with over 20 major corporations accepting it as payment, including the Dallas Mavericks. This is a promising sign for Dogecoin’s future prospects.
3. Listed on Multiple Exchanges
Dogecoin is one of the most well-known meme coins and can be found on almost all the top cryptocurrency exchanges. Dogecoin’s success has even led to it being listed on Robinhood, a beloved beginner-friendly broker by Americans.
There are numerous benefits to having multiple listings for Dogecoin. For one, it makes the cryptocurrency highly liquid, which reduces manipulation. Additionally, during peak bull markets, new investors have an easy way to access Dogecoin. This is evident from Dogecoin’s recent price surge after Robinhood began allowing trading of the cryptocurrency in May 2021.
Given that Dogecoin is now being listed on more exchanges because of its popularity, it’s likely that new money flow will see it hit new highs during the next bull run. This makes 2022 a solid year to consider adding Dogecoin to one’s cryptocurrency portfolio.
The Cons of Dogecoin Investing
Despite the multiple advantages of investing in Dogecoin, there is a fair share of disadvantages that come with this meme coin. According to Analytics insight, Dogecoin doesn’t have a solid foundation like other currencies.
Investing in Bitcoin would be wiser than investing in an unstable currency, such as Dogecoin, because stores rarely accept cryptocurrencies rather than standard bills or credit/debit cards.
While some people have begun to accept Dogecoin, most still prefer Bitcoin. This makes it difficult for Dogecoin to grow without more widespread acceptance. Additionally, other cryptocurrencies like Litecoin, Nano, and Stellar have cheaper transaction costs than Dogecoin. Consequently, this implies that Dogecoin is not as competitive as others in the industry and will not be able to sustain itself long-term.
Bitcoin, the largest and most famous cryptocurrency, is at an advantage due to its size and reputation. However, Ethereum’s use of blockchain technology for non-fungible tokens (NFTs) and decentralized finance put it ahead of some other cryptocurrencies, which are by far ahead by a long margin compared to Dogecoin.
While Dogecoin could be a major force in cryptocurrency, it is more susceptible to crashing and burning. If you’re looking for a fun investment and have some extra cash lying around, Dogecoin might be worth considering – you never know what could happen. However, many other investments would be better choices.
How to Invest in Dogecoin: Different Methods
Many exchanges offer Dogecoin; one safe example is Coinbase. In this section, let us proceed further with a discussion on a different method of purchasing Dogecoin through Coinbase.
1. Create a Coinbase Account
To get started, sign up or download the Coinbase app and begin the sign-up process. Note that you will need a valid ID and may be required to provide proof of address before being able to transact—so have those documents ready. Depending on your location, verifying your ID could take longer than just a few minutes.
2. Add a Payment Method
To add a payment method, tap the “payment method” box and then select your preference from the options of bank account, debit card, or wire.
3. Start a Trade
You can buy on Coinbase.com by selecting Buy & Sell. If you’re using the Coinbase mobile app, tap ( + ) to buy on the Home tab.
4. Select Dogecoin From the List of Assets
To buy Dogecoin on Coinbase.com, go to the Buy panel and search for Dogecoin. On the Coinbase mobile app, type “Dogecoin” into the search bar and select it from the results. This will open up the purchase screen where you can finalize your purchase.
5. Enter the Amount You Want to Buy
Enter the amount you want to spend in your local currency. The app will automatically convert it into Dogecoin. To switch the number to its equivalent amount of Dogecoin, tap the arrow buttons on either side of the dollar figure.
6. Finalize Your Purchase of Dogecoin
Once you’re sure you want to go ahead with your purchase, tap on “Preview buy.” You’ll then be able to see all the details of what you’re buying. If everything looks good, confirm your purchase by clicking on “Buy now,” and you’re done!
Tips for Investing in Dogecoin
1. Do your research. Dogecoin may seem like a fun, quirky investment option, but it’s important to fully understand the risks and potential rewards before buying any amount of Dogecoin. Be sure to thoroughly read up on how Dogecoin works and what factors could affect its value before investing in any amount of Dogecoin.
2. Don’t invest more than you can afford to lose. Dogecoin is still an emerging and relatively new asset class, so there is no guarantee that its price will continue to rise over time or that you won’t lose some or all of your investment when investing in Dogecoin. Consider starting with only a small amount of Dogecoin until you gain more experience.
3. Be aware of Dogecoin’s potential risks and limitations. Dogecoin is built on blockchain technology, which can be slow and expensive to use compared to other forms of payment, such as credit cards or PayPal. Dogecoin also has a lower market cap than other cryptocurrencies like Bitcoin, so it may be more vulnerable to price fluctuations in the future. Do your research to understand these risks before investing in Dogecoin.
4. Consider using a Dogecoin wallet or storage option that allows you to retain control over your private keys. Dogecoin wallets and storage options, such as hardware wallets, allow you to keep possession of your cryptocurrency without relying on third-party exchanges, which have been prone to hacks in the past.
Strategies for Investing in Dogecoin
- Diversify your Dogecoin portfolio by purchasing Dogecoin across multiple different exchanges, including popular platforms such as Coinbase and Binance. Doing so will help you minimize the risk of losing all of your Dogecoin due to a security breach or another unforeseen event on one particular exchange.
- Consider investing in Dogecoin when its price is relatively low compared to other cryptocurrencies. For example, if Dogecoin is trading at $0.10 per coin, and Bitcoin is trading at $5,000 per coin, it may be a good time to buy Dogecoin since its price relative to Bitcoin appears inexpensive. Of course, this strategy comes with some risks as well and should be done alongside proper blockchain fundamentals.
- Dogecoin can be traded against other cryptocurrencies as well as fiat currencies, so you may want to consider exploring different trading strategies ahead of investing in Dogecoin. For example, you could try using technical analysis tools or fundamental analysis techniques to help predict Dogecoin’s price movements and identify potential entry points for buying or selling Dogecoin.
- Another option is to diversify your Dogecoin holdings by allocating some of your investment to other types of cryptocurrency, such as Bitcoin, Ethereum, Litecoin, or others, which depend on your investment allocation. Make sure you do your own research!