Hackernoon logoDogecoin: Everything You Wanted To Know About This Memecoin Making A Mockery of 'Serious' Crypto by@@nawazmohammed

Dogecoin: Everything You Wanted To Know About This Memecoin Making A Mockery of 'Serious' Crypto

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Nawaz Hacker Noon profile picture

@@nawazmohammedNawaz

Cryptocurrency investor and analyst. Tech enthusiast and SaaS Product Marketing Professional.

Dogecoin, a meme-based cryptocurrency marked a 50% rise in value between May 4th, 00:00 am UTC, and May 5th, 15:00 pm UTC. It is maintained this surge though the most common cryptocurrency Bitcoin slumped as much as 5.7 percent in the same time frame. 

This surge caused Robinhood trading app in the US and WazriX trading platform in India to crash. 

Dogecoin was originally started as a joke in response to a meme about dogs in 2013. It has seen its value appreciate multi-fold in the last year and its community believes it will cross the $1 mark before this year ends. It was trading $0.50 on 9th May 2021 at 4:28 am UTC, as Elon Musk appeared on his Saturday Night Live Dogefather skit. Elon has mentioned Dogecoin in the past.

Elon said in the SNL Dogefather bit that, Dogecoin is the future of currency and a financial vehicle that is going to take over the world. He added that, though Dogecoin started as an internet meme it has now taken off in a very real way. He asked the co-artists in the gig to refer to himself as the Dogefather.

This article is not a piece of official financial advice, here we will explore:

- 1. What is Dogecoin, its ecosystem and how is it different from Bitcoin and other Crypto assets?

- 2. How to get some Dogecoins and/or start mining?
- 2.1 How to start earning Dogecoins using your Computer/Laptop
- 2.2 How to start Dogecoin mining from your computer
- 2.3 Start with Dogecoin Cloud Mining

- 3. 3 Major reasons one should be paying attention to this space 
- 3.1 Sincere and Clean Origins 
- 3.2 Strong community with influencers like Elon Musk backing Dogecoin
- 3.3 Rising real-world acceptance

- 4. Can this phenomenon continue?

1. What is Dogecoin and its ecosystem and how is it different from Bitcoin and other Crypto assets?

Dogecoin was created by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer, who decided to create a payment system that was instant, fun, and free from traditional banking fees. 

It is an open-source peer-to-peer cryptocurrency and its first block was mined in December 2013. Within the first 30 days, they got over a million visitors on their official website

“Doge” or The Shiba Inu is their mascot, which was popularized by an internet meme. 

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They have a functional wallet available in three variants: Multidoge, Dogecoin Core and Dogecoin Android wallet. 

MultiDodge is a light version wallet and provides fast sync times. Dogecoin Core is a full wallet and syncs by downloading the wallet on system space. Both these Wallet versions are available for Windows, Linux and macOS but if you are planning to mine Dogecoins then you would need to set up a “Dogecoin Core '' wallet to do so. They also have a Dogecoin Android Wallet app with over 1 million downloads.  

Using these wallets one can send money from Mumbai to Melbourne within seconds, without any middlemen. 

As of May 9th, 5:00 am UTC, Dogecoin had a market capitalization of $68 billion. 

Despite all its success, Dogecoin was never meant to have much intrinsic value. It is derived from the open-source project Litecoin. So there is no limit as to how many coins can be produced in the system. Hence there is no cap on the supply side. In contrast, Bitcoin's supply is limited to 21 million in existence and the supply side of it is capped at this number.

As of May 9th, 2021, at 5:00 am UTC there were 129 billion Dogecoins in supply and this will be rising by the day as per CoinMarketCap. Each year the supply of Dogecoin can increase by as much as 5 billion, which is meant to encourage people to actively use and spend it as a currency, rather than making it act like just another conventional Crypto digital asset.

The headline statement on DOGE’s official website is ‘1 DOGE = 1 DOGE,’ reflects that the DOGE community believes the coin should be used as a transactional currency, instead of being used solely as an investment or speculative asset.

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This predictable supply of 5 billion Dogecoin each year represents an inflation rate of about four percent per year. However, as more coins are mined over time that 5 billion amount will represent a smaller and smaller difference when compared to the total number of coins in circulation. So theoretically, in a few hundred years, it could end up being a fairly stable currency with very mild inflation. Just because the number of new coins in circulation is going to be predictable year by year. 

But this completely depends on people and businesses adopting it as a mode of payment going in further. Otherwise, the value of a Dogecoin might decrease as more of them enter circulation. Currently, more than 1300+ retailers accept Dogecoin. 

2. How to get some Dogecoins and/or start Dogecoin mining?

2.1 How to start earning Dogecoins using your Computer/Laptop:

Step 1:  Install the “Dogecoin Core” wallet for your Windows, Mac, or Linux-based machine from DOGE’s homepage. Dogecoin Core wallet syncs with the Dogecoin blockchain by downloading it, so it takes some time to sync up and reflect your updated wallet balance. But you can start receiving payments once it's installed on your system and you have a payment address of your Dogecoin Core wallet.

Step 2: Once you have your Dogecoin wallet payment address you can start earning some Dogecoins by joining their Reddit community where other users can use inline commands to tip other users using Dogecoins. Eg; +/u/dogetipbot 150 Doge

The other method to get earn some Dogecoins is by joining [email protected] (FaH), a distributed computing project by Stanford University, with their community team Dogecoinfah. It runs a bot that gives weekly rewards based on computational work units completed. By joining FaH you bring your computing power to help scientists find cures for diseases and receive some Dogecoins for your efforts. This is the method that we will explore here in the next steps.

FaH has a graphical user interface, so it is easy to use. It runs in your machine’s background and helps scientists studying Covid 19, Alzheimer's, Huntington's, Parkinson's, and many other diseases, by providing them with computing power to simulate folding proteins and study them, helping them find cures for these diseases.

In April 2020, The Guardian covered that  [email protected] (FaH), run by volunteers, created the world's fastest supercomputer to combat Coronavirus. 

Step 3: To join the program and get rewarded with Dogecoins, start by installing [email protected] software for your Windows, Linux, or Mac OS based machines and configuring your Dogecoin Core wallet’s payment address as your folding user name and your folding team as 226715 (Dogefolders) under folding identity.

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Step 4: You get bonus points if you have a “Passkey” configured with your FaH account identity. To set up a Passkey, go to the [email protected]'s Passkey Creation Page. Here you enter your Dogecoin wallet address as the folding name, enter your email address, and click the "Get Passkey" button. The Passkey will be emailed to you. Enter the passkey into your Identity Configuration to earn bonus points. You can learn more from the [email protected]'s Passkey Guide

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Once you have all the above fields updated under your online FaH client interface under identity, you are good to go and can start receiving Dogecoins as rewards for the work units your machine completes. 

Step 5: The automated reward distribution system, DogecoinFah, pays the folding team Dogecoin donations on a weekly basis (usually late Saturday CST). Volunteers must confirm that they have a valid Dogecoin wallet address as their folding username and are folding for the Dogefolders team #226715. 

The automated system will combine multiple rewards into one weekly payout. For each computational work unit completed using your machine, the FaH system will give you some points that will add up in the total points of the Dogefolders team. 

Some rewards give more Dogecoins to team members who completed more work units and contributed more points to the team’s total by folding more, while other rewards give some Dogecoins to each team member who folded and earned any points before the weekly payout. 

I have noticed that some work units can take up to a week to complete but they also give you more rewards.

2.2 How to start Dogecoin mining using your computer

Dogecoin mining, like any other cryptocurrency mining, is the process of being rewarded with new Dogecoin for confirming and recording new transactions or blocks on the Dogecoin blockchain. 

Dogecoin mining acts as a lottery system. Many computers (nodes) work on the same block at the same time, but the node that adds the new block to the old chain is the one that wins all the new-minted coins.  

To increase your chances of getting a newly minted Dogecoin quicker as a beginner, it is recommended that you mine in a pool.

If you are a Solo miner acting as a Node and you complete a new block transaction on the chain, you would get the entire reward, but pools mine blocks much more often as they have more computing power behind them. Hence it can take months before a Solo miner completes their first block and see some rewards.  

However, when you mine in a pool, the coins earned will be distributed within the pool members, so you only receive a small portion of the total reward and there is a small fee that would have to be paid from the rewards you get. But this method can provide you with a steady supply of new Dogecoins periodically.  

Mining Dogecoin is comparatively easy. DOGE is based on an algorithm known as Scrypt. In comparison, Bitcoin uses the SHA-256 algorithm, which needs more computer power to mine.

To start mining Dogecoin you would need certain hardware:

- You need to have a computer with a Windows, Apple Mac, or Linux-based operating system with a good internet connection. 

- Having a powerful graphics card in the machine increases your chances of mining Dogecoins. A few good GPUs to get started would be:

- SAPPHIRE Pulse Radeon RX 580
- Nvidia GeForce GTX 
- ASUS RX Vega 64 

- You also need to have a Scrypt ASIC Miner. It is a piece of hardware programmed to mine Scrypt based currencies like Litecoin and Dogecoin. ASIC Miners can be expensive ($800-$9000). Also, they get a bit loud and can get very hot. Here are a few you can check out:

- Innosilicon A2 Terminator 
- Bitmain Antminer L3
- BW L21 Scrypt Miner

Now coming to the software that you would need to mine Dogecoin using your computer: 

- If you are mining using your computer I would recommend using CPU miner by Pooler, which you can download for free.

- If you are mining using a GPU then you get an array of software options but a few noteworthy ones here are CudaMiner, CGMiner, and EasyMiner (Recommended for beginners).

- Software CGiner and EasyMiner can be used with Scrypt ASIC Miner but you can also use MultiMiner.

Once you are set up with the hardware and the software, you can start mining solo, or join a pool. The best pools to start mining Doge are Multipool and AikaPool

2.3 Start with Dogecoin Cloud mining (No hardware required)

Simply put, Dogecoin cloud mining is mining the coins by renting the hardware from someone else. The Dogecoin is mined at a big data center for you and your part of the rewarded coins are given to you for a monthly fee. 

To start cloud mining all you need to do is to set up a Dogecoin core wallet and select a cloud mining pool to join. Eobot, Nice Hash, Genesis Mining are a few trusted script-based cloud mining pools one can explore. 

A few pros of Dogecoin Cloud mining:

- It’s cheaper than setting up your own operations. 
- There is no loud noisy hardware.
- No technical stuff to think about.
- Get a steady supply of new coins every month.

A few cons of Dogecoin Cloud mining:

- It can be hard to find which cloud mining contract is a good value for money.
- The monthly rent of the computing power you agree to use will be fixed but the value of a Dogecoin can fluctuate, affecting your returns.  
- Dogecoin pools have fixed contracts. So a contract profitable today can become unprofitable say one and a half years down the line. 
- You miss out on the fun of mining on your own.

3. 3 reasons one should be paying attention to this space 

3.1 Sincere coin with clean origins:

We all have been reading that financial institutions and large investors have started giving exposure to Crypto-assets in their portfolios but as this trend emerges, serious investor concerns are also rising.

For instance, a couple of days ago Kevin O’Leary, Shark tank investor and Chairman of O’Shares Investments, told Yahoo Finance that when they exposed around 3% of their portfolio into Digital assets, he got a lot of calls from institutional investors asking him if he knew about the origins of those coins. 

He adds that it is a challenge as we can tell a crypto asset's time of creation but we can not tell the location it was created and it is believed that around 60% of cryptocurrencies are currently mined from China. Where they don’t really care about sustainable mining and have serious issues around human rights. There are many institutional clients that do not want to own these so-called “Blood coins” from China. Issues like these matter to investors. 

Also, there are cases where Cryptocurrencies take themselves too seriously and push too hard. Like paying people to tweet and get too aggressive on promotions just to pump coin value, resulting in a price bubble. Like in a video a very well-known YouTube influencer Marques Brownlee shows how he was told over an email that he would be paid to spread positive word of mouth about Tron (another Altcoin), showing him examples of the same being done by Lindsay Lohan, Amanda Cerny, NeYo, Lil Yachty and more. 

Dogecoin is on the other end of the spectrum. Recently, Graham Stefan, financial advisor and real estate investor, in a video, stated that because Dogecoin started as a harmless joke and also it is obvious that the founders are not doing this for money, that actually makes it, in this world of crypto that takes themselves too seriously, more accessible and less intimidating cryptocurrency.

Graham also brings up an interesting analogy. He talks about someone named Will Rogers, who ran for President of the United States in 1928 and won the race on a joke campaign and then eventually resigned. Will Rogers could have remained the President if he wanted to but he resigned as his campaign's whole objective was just to mock the process. So in a way that was like the Dogecoin of politicians. 

The creators have been quoted to have sold all their Dogecoins in 2015. Bill Markus said to the press that he sold all his Dogecoin in 2015 making just enough to buy a used Honda Civic. Even they are perplexed by its popularity.    

The market capitalization of Dogecoin stands more than Honda today. Dogecoin’s value appreciation is majorly led by people meaming online and its community is getting stronger by the day. 

As Kevin O’Leary said in that Yahoo Finance interview, a crypto coin that has a clean origin, is being mined sustainably for quite some time, in a jurisdiction that supports human rights, ethics committee approval, and has a strong and growing community could be worth way more than any other generic coin that can’t prove its providence. But it is still way too early to say if Dogecoin will ultimately be in the winning league of cryptocurrencies, though it has shown some initial promise. 

3.2 Strong and growing online community with influential names like Elon Musk backing Dogecoin

Dogecoin’s Twitter handle crossed the 1 million followers mark on April 30th, 2021. On CoinMarketCap, more than 638,424 people have it on their watchlist (Up more than a lakh in a day). They also have a Reddit community with 1.6 million members. 

The DOGE community is vibrant, highly engaged, and philanthropic. Plus they consider Elon Musk to be their unofficial CEO (Dogefather) at this time and for good reasons. It's been almost 4 years now that Elon has been tweeting about Dogecoin. So, it does not seem like it is just another fad in his mind. 

Plus Elon is putting in additional efforts which are expanding Dogecoin's recognition and trust. Like his appearance on Saturday Night live on May 8th, 2021.

Historically it has been seen that the value of Dogecoin rallies a couple of days after Elon tweets about it.

In a recent interview with TMZ, Elon said that, “There is a good chance that crypto is the future currency of the world. Then the question is which one is it going to be? It could be multiple," he said. He then adds how Dogecoin was invented as a joke, essentially to make fun of cryptocurrency, and that’s the irony, he explains, “that the currency that began as a joke, becomes the real currency."

Still, in that very same video, he does add that, “Don’t invest your life savings into cryptocurrency. That’s unwise."

Apart from Elon, Mark Cuban, Dallas Mavericks owner and Shark tank investor, has shown interest and confidence in the cryptocurrency. He said, “Doge is the one coin that people actually use for transactions.” 

Dogecoin is also proving to be the first crypto for many that they mine themselves and this trend is catching on just because of its simplicity. It can’t be said if Dogecoin will actually become a serious cryptocurrency or not but one thing that can be said is that it is proving to be a great means to start understanding cryptocurrency mining and trading. 

It is currently pretty clear that this community is growing fast and is seeing better traction by the day with influential names leading the way. 

3.3 Rising real-world acceptance

More than 1300+ retailers have reported having started accepting Dogecoin as a mode of payment and the number is growing as the cryptocurrency is gaining more recognition from the market and users.

Oakland A became the first baseball team to start selling tickets in Dogecoin. Even Mark Cuban’s Dallas Mavericks team has started accepting payments in Dogecoin.

With Elon Musk riding on the Dogecoin phenomenon, people are expecting that they would be able to buy a Tesla using Dogecoin soon.

The gradual but consistent adoption of this cryptocurrency and its future promise is a strong reason that is helping turn this “Meme coin” into a serious crypto asset.

4. Can this phenomenon continue?

There is no sure telling as of now if this phenomenon will continue like it has or not but we can say one thing, Dogecoin is not the same as Bitcoin or any other Digital crypto asset. It is not meant to be stocked but it is being expected that the majority of people holding this cryptocurrency will be using it for real-world transactions. 

Dogecoin being a non-capped currency and with around 5 billion Dogecoings to be added every year and adjusted for inflation, is in some way similar to how the U.S. Federal Reserve prints and circulates the US dollar. So as shared earlier in the article, it can end up being a more stable currency over a 100-year timeframe if user adoption of doing transactions using the coin keeps growing. Will it happen or not? We would have to wait and watch. 

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Because there is an infinite number of Dogecoin that will enter circulation at a rate of 5 billion annually, the only way for Dogecoin's value to consistently go up in price or stabilize, is if more people buy-in or more people use it. If that happens then it can be a stable source of currency, but as of right now, that is not sustainable without mass adoption.

To put that into a different perspective, in order for Dogecoin to reach a dollar, its market capital needs to increase by 72 billion from current levels of 69 billion Dollars, during a time when 5 billion new coins are entering into circulation, i.e; 10000 new coins added per minute.

One of the co-founders Billy Markus told reporters that the market cap of Dogecoin, if it reaches a dollar, will be equal to companies that provide services to millions like Boeing, Starbucks, American Express and IBM.

On the other end of the spectrum, we also have people who believe that Dodge is more suitable to become the currency of the future compared to Bitcoin. As it has a higher supply, lower price and faster transactions. It is tailored for daily use and its community culture can easily resonate with the general public.

So, what do you think of Dogecoin and do you believe it is here to stay for the long term? Looking forward to your feedback in the comment section. 

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