What is Dogecoin (DOGE) and Whether it Worth Buying?

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Dogecoin that literally started as a joke, now has become a phenomenon with one of the fastest-growing rates. It's one of the most popular cryptocurrencies in the whole world that currently flaunts the market capitalization of more than 40 billion US dollars.

If you're interested in investing in cryptocurrencies, then Dogecoin can be an option. But before you consider doing that, it's important to know what Dogecoin really is and how it works. That's where this article comes into place that will help you understand everything you need to know about this cryptocurrency.

What is Dogecoin (DOGE)?

If you're still wondering "what is Dogecoin," then in simple words, it's a first-generation cryptocurrency that was created back in 2013. As mentioned, it started as a joke by a couple of software engineers.

Crypto meme

In December 2013, Jackson Palmer combined two of the most trending internet spectacles of that time (Shiba Inu Dog meme and cryptocurrency) in a single image and shared it on Twitter. People interested in crypto missed out on the joke, and Billy Markus, another software engineer, contacted Jackson Palmer and launched bitcoin by making some changes in the source code of Bitcoin. That's how it started, and now the value of the cryptocurrency is worth billions of US dollars.

Dogecoin History

Within a couple of months, Dogecoin reached the market capitalization of a staggering 89 million US dollars.

Dogecoin History

Dogecoin History

In 2015 both the founders of Dogecoin decided to say goodbye to the project, but the cryptocurrency continued to grow. After 4 years, in December 2017, Dogecoin finally hit the market capitalization mark of 1 billion US dollars. But in 2018, cryptocurrency experienced a dramatic decline in its market capitalization, and in December 2018, the market capitalization of the cryptocurrency was around 276 million US dollars.

The biggest surge in Dogecoin value took place in early 2023 when Reddit’s GME (GameStop) community and a business tycoon Elon Musk started showing their interest in the cryptocurrency.

Dogecoin Profile
Ticket DOGE

Max supply

N/A

Total supply

130,063,646,536

1-year price low

$0.0030733

1-year price high

$0.68144

Current Price

$0.21

Market cap

$27,412,333,645

Markets

Binance, Huobi Global, Coinbase

How Does Dogecoin Work?

Dogecoin works pretty similar to cryptocurrencies such as Bitcoin and Litecoin that use the POW (Proof of Work) algorithm. The POW algorithm allows organizations and individuals to mine Dogecoin.

On the Dogecoin network, a new block is generated and added to the blockchain after every minute. Bitcoin as a comparison adds a new block to the blockchain after every 10 minutes. Moreover, unlike Bitcoin that uses the SHA-256 algorithm, Dogecoin uses the Scrypt algorithm (also used by Bitcoin). The Scrypt algorithm is far less complicated as compared to SHA-256 which is why mining on Dogecoin is far less energy-intensive and also faster as compared to Bitcoin. Moreover, in order to keep the blockchain ledger secure, Dogecoin, just like other cryptocurrencies, uses cryptography.

Unlike Bitcoin, DOGE is an inflationary coin because there is no ceiling or limit to the total number that can be created. It’s one of the main reasons why the value of Dogecoin is very low as compared to deflationary coins. It’s important to bear in mind that this cryptocurrency was never innovative because of how it was created. Plus, it was never meant to address any specific crypto market gap, and it also doesn't receive updates as frequently as other coins do.

How was Doge Created?

As mentioned above, Dogecoin was created as a joke by a couple of software developers by modifying the Bitcoin source code. The two major changes that the creators of Dogecoin made were the total supply and the generation time of the new block. Initially, at the time of launch, there were 100 Billion dogecoins. But now there are more than 130 billion coins that are in circulation. It’s important to note that the founders of Dogecoin were the first to mine Dogecoin right after its launch.

Unlike other popular cryptocurrencies such as Bitcoin and Litecoin that have predetermined maximum supply, there’s no upper limit to Dogecoin tokens that can ever be created. So as the miners continue to mine, the circulating supply of this cryptocurrency will also continue to increase.

Where is DOGE Trading Going?

Dogecoin trading increased exponentially, and its value also skyrocketed in 2023 by its active and enthusiastic community. Currently, the following are the main exchanges that can be used if you’re interested in trading Dogecoin:

ZG.com

CoinTiger

Dogecoin Performance

Dogecoin has shown great performance recently, which has made it one of the most popular cryptocurrencies. Within a matter of a single month, the market capitalization of Dogecoin reached more than 88 from 7 billion US dollars.

Doge performance - On 7th January 2023

Doge performance - On 7th January 2023

Doge performance - On 7th January 2023

Doge performance - On 7th January 2023

But it also declined at a very fast rate because of its high volatility that mostly causes random market movement. The following chart shows the progress of Dogecoin over the course of last year.

Dogecoin Chart

Dogecoin Chart

One of the biggest roles that led to the increased market capitalization of Dogecoin is the philanthropic work by its community. People donate huge amounts of money by using Dogecoin to charities and non-profit organizations. Not only does it increase the number of Dogecoin community members, but it also helps to stabilize the value of the coin. But according to crypto experts, it's still a meme cryptocurrency that will always remain highly volatile. People who invested in Dogecoin in early 2023 earned huge amounts of profits because of its sudden increase in value. But from now on, it's not safe to say that this coin will show the same behavior.

DOGE

1m return

-26.54%

1y return

193.80%

Interested in Crypto Trading? - Buy DOGE on Binance

Dogecoin Mining

Mining dogecoin was considerably easier in the beginning since there were so few users on the network. It also means that the currency could be mined by anybody. If you want to mine Dogecoin then there are three different options available for you.

Solo Mining

Mining alone is not easy and now It’s rarely lucrative unless you are prepared to spend a lot of money on high-end equipment that will also consume more energy.

Pool Mining

Joining a mining pool is advisable if you want to earn Dogecoin because it increases the chances of validating a new block significantly. However, before joining a mining pool, it’s important to keep in mind that you’ll need to pay 1 to 3 percent fees. We recommend you always examine how each pool calculates payments for its participants. The following are the most popular mining pools that you can join.

Cloud Mining

Cloud mining entails renting computer capacity from an organization and paying a cyclic fee depending on the underlying contract. It’s another way to mine Dogecoin and it also involves mining pools and the reward is distributed to all the participants based on the amount of computing power you purchase. The biggest disadvantage of cloud mining is that most providers offer contracts that are time-locked. It means that you’ll need to stick to your contract even if the price of Dogecoin drops and mining fails to generate profit. Two of the popular cloud mining pools that you can join are:

Reward on Dogecoin Mining

The reward of validating one single block of Dogecoin is 10,000 coins and if you earn this reward via mining pool then 10,000 coins will be divided among all the participants.

Recommended Wallet

The best way to store the DOGE tokens that you earned by mining is to use a secure crypto wallet. Dogecoin Wallet is the most recommended option for that. Other than that, you can also use Trezor Model T and Ledger Nano S.

Dogecoin Use Cases

Because of its popularity, many online companies and platforms accept Dogecoin. Here we have mentioned some of the high-profile companies that have already embraced Dogecoin.

Dallas Mavericks

The “Dallas Mavericks” is the very first NBA club that started using Dogecoin in its payment system. Fans of this club can now buy merchandise as well as game tickets using cryptocurrency including Dogecoin.

Kessler Collection

The Kessler group that offers luxury hotels recently partnered with BitPay and now accepts DOGE as a valid payment option. As a result, the firm became the first luxury hotel chain in the United States to accept cryptocurrency payments.

SpaceX

SpaceX aims to launch its DOGE-1 Moon Mission next year and the company has already begun taking funds for the mission in Dogecoin. It’s said that it will be the very first mission that will be completely funded with cryptocurrency.

One of the biggest potential use cases of Dogecoin is that Tesla can be the very first car company to accept Dogecoin because of the interest of its CEO (Elon Musk) in the cryptocurrency.

Can DOGE Reach $100 in 10 years?

Elon Musk and Dogecoin

Elon Musk, the founder and current CEO of Tesla Motors, is by far the biggest reason why the value of Dogecoin increased so dramatically. He's the loudest supporter of cryptocurrency, and his tweets caused the biggest surge that exploded Dogecoin. So much, so the Dogecoin community started calling him "DogeFather" only because of his goofy tweets. At one point, the price of the Dogecoin was increased by 100 percent because of one of his tweets. He says that he likes Dogecoin because this cryptocurrency always generates entertaining outcomes.

Elon Musk’s interest in the overall crypto world isn't new. In January 2023, he revealed that Tesla had invested 1.5 billion US dollars in Bitcoin and there are also plans to accept it as a valid payment method. That’s why many crypto experts suggest that Musk’s interest in Dogecoin is only because of entertainment purposes. That’s because his company chose Bitcoin instead of Dogecoin when it comes to actual business.

Dogecoin Criticism

Over the course of time, Dogecoin, along with its amazing performance, has also faced a lot of criticism. The CEO of Bitware, Pat White, says that it's the only cryptocurrency that started as a joke, and the surge in its value only happened because of the hype and some publicity stunts. He further says that people who invested in Dogecoin in early 2023 have gained their profits. But now, spending your money to buy Dogecoin, especially for long-term investment, is not a wise idea. One of the reasons is the constant flow of brand-new cryptocurrencies entering the market.

Mr. White also explains that the code-level scrutiny and protocol security of Dogecoin isn’t the same as compared to Ethereum and Bitcoin. Dogecoin also doesn’t receive as many updates as other major cryptocurrencies do, and it also lacks a robust mining community. Collectively all these reasons increase the chances of mining level attacks that can be deadly for investors.

High Level of Centralization

Other than the technical limitations of the Dogecoin that we have mentioned above, it also faces a centralization problem. In fact, it’s the most concerning issue for most crypto lovers because it’s against the very concept of cryptocurrency. On 4th January 2023, the CEO of Binance Changpeng Zhao shared a tweet where he mentioned that Dogecoin is highly concentrated, with only 1 address holding 27 percent of the entire supply. The tweet also says that only the top 20 addressed in the Dogecoin blockchain contain over 50 percent of the total supply.

Pump and Dump Cases

In an interview with Yahoo Finance, the Edelman Financial Engines’ founder, Ric Edelman, said that Dogecoin is a bad boy of the crypto world. He also said that this digital currency doesn't have any legitimate use case and appears to be a pump and dump scheme. It’s a fact that Dogecoin's price has fluctuated dramatically in the past, because of its appeal as a humorous dog-themed cryptocurrency. Here we have mentioned some of the most prominent pump and dump cases regarding Dogecoin.

Crypto Boom 2017

The very first major pump in the Dogecoin price occurred in March 2017. A major increase in retail investment began to stream into the entire crypto world that increased the value of pretty much all cryptocurrencies. Over the course of 70 days, Dogecoin increased its value by 1890 percent as its value reached 0.0042 from 0.00021 US dollars. This boom sent the market capitalization of Dogecoin to 423 million US dollars. However, right after two weeks, the value of Dogecoin decreased by 75 percent.

Elon Musk Tweets

By far the biggest surge in the entire history of Dogecoin occurred in January 2023. Thanks to Elon Musk and his tweets, the value of Dogecoin again broke all its previous records and reached the value of 0.69 US dollars. At that time the market capitalization of this cryptocurrency was a whopping 88 billion US dollars. However, within a month the price again dropped dramatically and now the value of one Dogecoin is about 0.2 US dollars and its market capitalization is about 33 billion US dollars.

Should you buy Dogecoin?

There is no simple, one-word answer to this question. As we have mentioned multiple times, this cryptocurrency started as a joke, and its price is extremely volatile. So, investing in this cryptocurrency isn't risk-free. In fact, the risk factor is higher, but many investors believe that the initiative taken by Elon Musk has the potential to change Dogecoin permanently.

Best Crypto Exchange to Buy Dogecoin

If you don't know where to buy Dogecoin, then we recommend you to opt for Binance. It’s the best online crypto exchange where you can buy Dogecoin. Additionally, it also offers tons of other cryptocurrencies that you can buy and trade. You can easily set up your account on Binance, and by adding a valid payment method, you can buy Dogecoin. The platform only charges 0.1 to 0.2 percent of the flat spot trading fee based on your locality. You can also convert your Dogecoins on Binance to any other listed cryptocurrency and vice versa. But first, you need to make sure that the platform is available in your country and trading crypto is allowed.

How to buy Dogecoin (DOGE): 3 steps algorithm

If you're interested in this cryptocurrency and wondering how to buy Dogecoin, then consider using the steps mentioned below.

Market Analysis

The first and the most important step before buying any cryptocurrency is to perform a comprehensive market analysis. So, in this case, you'll need to make sure that you completely understand not only the current state of Dogecoin but also its history. The following chart shows the entire timeline of Dogecoin, where you can see that it became popular in 2023.

Dogecoin Price

Dogecoin Price

Funding Account

Once you have made your mind to buy Dogecoin after performing the market research and critical analysis, then the next step is to go to register yourself on Binance. All you need to do is to open the official Binance website and click on the big yellow “Register Now” button. The system will take you to another page where you only need to provide your email address to complete the process. Once your account has been created, then you'll need to fund it by using your fiat currency or other cryptocurrencies. If you want to use your fiat currency, then you'll need to click on the "Wallet” button available on the top right corner of your account’s main page. From the menu, you’ll need to select the “Fiat and Spot” option.

Binance Account Funding

Binance Account Funding

Buying Doge

In order to buy Dogecoin, you’ll need to click on the trading button by opening your account.

Buying Dogecoin

Buying Dogecoin

On the next page, you'll need to choose the desired cryptocurrency, which is Dogecoin in this case, and click on the "Continue" button. The system then will ask you to choose the payment method, and you'll need to select the Binance Cash option.

Buying Dogecoin

Buying Dogecoin

After clicking on the "Confirm" button, the transaction will complete.

Direct Method of Buying Dogecoin

You can also directly buy Dogecoin from Binance in a single step by using the following steps.

Click on the "Buy Crypto" button available on the top left corner of the main screen of your account, as the image below shows.

Buy Crypto button in Binance

"Buy Crypto" button in Binance

After that, the system will take you to another page with two fields. In the first field, you’ll need to enter the amount that you want to deposit in your account to buy Dogecoin. In the second field, you’ll need to choose the Dogecoin from the available list and click on the “Continue” button, as the image below shows.

Buying Dogecoin

Buying Dogecoin

Next, you only need to enter your bank account details, and after verification, the Dogecoins will be added to your account that you'll be able to use for trading.

Top 10 Best Cryptocurrencies to Invest In

As mentioned, the first and the most important step that you must take before investing in any cryptocurrency is performing a thorough market analysis. For your convenience, our experts have performed this step for you and selected the 10 best cryptocurrencies to invest in 2023. Along with the current market trends, we have also taken into account the historical data and all the possible driving factors such as popularity among investors, technology, long and short-term performance, etcetera to create the following table.

Cryptocurrency Industry Current price 1y return 1m Return Total score

Binance Coin (BNB)

Cryptocurrency exchange

487.80$

168.38%

-6.58%

9.5

Invest

Cardano (ADA)

Blockchain platform

1.31$

123.15%

7.02%

9.2

Invest

Ripple (XRP)

Payments

0.80$

91.73%

2.14%

9

Invest

Dogecoin (Doge)

Payments

0.16$

178.19%

3.44%

8

Invest

Polkadot (DOT)

Blockchain platform

27.32$

61.39%

5.11%

8

Invest

LItecoin (LTC)

Payments

141.90$

-7.20%

-1.88%

7.6

Invest

Stellar (XLM)

Payments

0.28$

-7.27%

10.99%

7.5

Invest

Uniswap (UNI)

Decentralized exchange

16.28$

80.21%

13.93%

7.4

Invest

Tron (TRX)

Blockchain platform/Media

0.07$

77.23%

-22.10%

7

Invest

IOTA (MIOTA)

Internet of Things

1.19$

94.61%

14.41%

6.9

Invest

Summary

Despite its popularity and massive market capitalization, Dogecoin still doesn't have a mainstream utility like many other coins. But it truly has the potential to change this trend. It's not only about Dogecoin but buying any digital currency involves risk. That's why it's critical to understand the historical data and current performance of any cryptocurrency you're interested in. We recommend you to buy a few coins by spending the money that you can easily lose. It'll allow you to familiarize yourself with it, and you'll be able to make more educated and informed decisions while your real money is at stake.

FAQs

Is Doge a good investment in 2024?

Because of the support of Elon Musk and the recent performance, Dogecoin can be a good investment in 2024. However, it should be understood that the risks are also great.

Will 1 Dogecoin ever hit 100 US dollars?

It's almost impossible for Dogecoin to hit 100 US dollars because of its inflationary model. Virtually unlimited Dogecoins can be created, and currently, there are more than 130 billion coins already in circulation.

Can Dogecoin make me rich?

Countless people have made fortunes because of the recent surge in Dogecoin. It has the potential to make you rich if something similar happens again.

Why does Dogecoin face so much criticism?

Dogecoin was literally started as a joke and remained the same for many crypto experts. It's one of the most volatile cryptocurrencies that was never meant to be innovative. That's why it faces a lot of criticism.

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Dr. BJ Johnson
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Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.

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Mirjan Hipolito
Cryptocurrency and stock expert

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets. Her specialties are daily market news, price predictions, and Initial Coin Offerings (ICO). Mirjan is a cryptocurrency and stock trader. This deep understanding of the finance sector allows her to create informative and engaging content that helps readers easily navigate the complexities of the crypto world.