Dogecoin is the original meme-coin and is well known to cryptocurrency veterans. This cryptocurrency guide focuses on Dogecoin’s role in the cryptocurrency ecosystem, its origins, and Dogecoin’s key price drivers.
What Is Dogecoin?The cryptocurrency Dogecoin was created as a joke but eventually found a purpose as a more friendly, approachable alternative to Bitcoin. The Dogecoin community has catapulted DOGE to cult status. Today it is often used as an entry-point into the crypto world. The cryptocurrency hasn’t seen any major updates since 2015 (although it is able to benefit from improvements to the Litecoin code). The true value of Dogecoin lies in the strong and vibrant community that sprung up around it.
Interesting Facts About DogecoinDogecoin was originally founded as the result of a joke made by Jackson Palmer in November 2013. When he was contacted by programmer Billy Markus, they decided to turn Dogecoin into a reality.
Dogecoin has one of the largest and most active communities in the cryptocurrency world. This community has come together to fund a number of charitable efforts and other projects. They even managed to sponsor a NASCAR.
One of the most common uses for Dogecoin today is as a tipping service. Users will tip other users for posts or contributions that they believe deserve recognition. It’s similar to a “like” but with more impact.
What is Dogecoin Mining?Dogecoin mining is the process of being rewarded with new Dogecoin for checking transactions on the Dogecoin blockchain. Simple, right? Well no, it’s not quite that simple, nothing ever is!
Mining Dogecoin is like a lottery. To play the lottery you have to do some work. Well, actually your computer (or node) has to do some work! This work involves the confirming and checking of transactions which I talked about in the last section.
Lots of computers work on the same block of transactions at the same time but the only one can win the reward of new coins. The one that earns the new coins is the node that adds the new block of transactions to the old block of transactions. This is completed using complex mathematical equations.
The node that solves the mathematical problem first wins! It can then attach the newly confirmed block of transactions to the rest of the blockchain.
Most cryptocurrency mining happens this way. However, Dogecoin mining differs from other coins in several important areas. These areas are:
Algorithm: Each cryptocurrency has a set of rules for mining new currency. These rules are called a mining or hashing algorithm.
Block Time: This is the average length of time it takes for a new block of transactions to be checked and added to the blockchain.
Difficulty: This is a number that represents how hard it is to mine each new block of currency. You can use the difficulty number to work out how likely you are to win the mining lottery. Mining difficulty can go up or down depending on how many miners there are. The difficulty is also adjusted by the coin’s protocol to make sure that the block time stays the same.
Reward: This is the amount of new currency that is awarded to the miner of each new block.
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