With thousands of coins available, it can be difficult for those interested in buying crypto to know what they are looking for. This is especially true when you get out of the big names like Bitcoin (BTC) and Ether (ETH).
Dogecoin (DOGE), meanwhile, has become a darling in the cryptocurrency community. Due to a rally that took place in 2021, it entered the top 10 cryptocurrencies by market cap. Many saw the price increase in 2021 and became interested in buying Dogecoin.
So where and how can you buy Dogecoin? Below is a guide to what DOGE is and tips on how to buy it.
What is Dogecoin?
Dogecoin is one of the many cryptocurrencies currently available. Like many cryptocurrencies, it is peer-to-peer and open source. The coin is also recognizable by its Shiba Inu logo.
In 2013, Jackson Palmer, an Adobe product manager from Sydney, Australia, came up with the idea for Dogecoin. It was a bit of a tongue-in-cheek joke about all the hype new cryptocurrencies were seeing. Palmer began tweeting about Dogecoin and, to his surprise, received positive feedback. IBM developer Billy Markus thought Dogecoin was a fun idea. Markus contacted Palmer to see if he could build the software to support the coin. With that, the two came together to find Dogecoin.
Dogecoin was launched in December 2013. With the hype created before the coin existed, it gained a community quite quickly. Much of its appeal was the loose, laid-back concept of a coin based on a popular internet meme. In particular, it garnered a large and passionate following on Reddit.
The Dogecoin community is known to be quite unique in the world of cryptocurrencies. As is common in the world of Internet culture, things that start out for fun or as a joke often develop devoted communities. Additionally, the Dogecoin crowd is known for coming together for organized action, for example supporting individual athletes and sports teams.
Apart from that, Dogecoin is a cryptocurrency like many others. It is a coin mined through a proof-of-work (PoW) consensus algorithm, and miners receive it as a reward for solving blocks. It uses blockchain technology, however, unlike Bitcoin, there is no limit to the amount of Dogecoin that can be mined. That makes it an inflationary currency rather than a deflationary currency like Bitcoin.
In general, Dogecoin can be seen as a viable investment; however, those looking to purchase DOGE as an investment should be aware of its incredibly volatile nature and the fact that the coin has very few use cases. Do your own research on Dogecoin and how to trade cryptocurrencies. Only buy and trade Dogecoin at your own risk.
How do I buy Dogecoin?
When it comes to buying Dogecoin, the process is simple. If you already have experience buying cryptocurrencies, buying Dogecoin will be similar. Despite being present on most of the larger cryptocurrency exchanges, it is not as widely available as some of the more established coins, and you may need to find a new exchange or a new wallet to accommodate Dogecoin.
If you are looking to buy Dogecoin, you should cover the following basics:
- Find a wallet that supports Dogecoin.
- Find an exchange that trades Dogecoin.
- Complete your first Dogecoin transaction and transfer the coins to your wallet.
Finding a Dogecoin Wallet You must
find a wallet before you buy Dogecoin. If you already trade cryptocurrencies, your current wallet might be suitable. But if you’re new to crypto or your current wallet doesn’t support Dogecoin, you’ll need to find a crypto wallet to transact with.
A crypto wallet can be a software program or it can be a piece of hardware. You can even create paper wallets to store and protect your cryptocurrency. Regardless of the type of wallet you choose, the purpose is to store your private keys and facilitate transactions.
If you’re looking for the basics of the different types of cryptocurrency wallets, software wallets tend to be more convenient and are usually free. On the other hand, hardware wallets are considered more secure, but require upfront purchase and are less convenient for people who do a lot of transactions.
There are many wallets for people looking to buy Dogecoin as there are software wallets and hardware wallets compatible with DOGE. However, it is important to note that different wallets may offer different features and levels of security. Whether you go with a software wallet or a hardware wallet, you should do your research to ensure you are using a crypto wallet that is secure but also offers the features you need.
Read more: Selling DOGE: A Beginner’s Guide to Selling Dogecoin for Cash and Crypto
How to choose an exchange to buy Dogecoin
Dogecoin may be growing in popularity, but it is still only available on a limited number of exchanges. If you plan to invest in Dogecoin, you will need to find an exchange that offers the coin for trading and is operating legally within the jurisdiction where you reside.
While there are a number of exchanges that can offer Dogecoin for trading, finding the right one can take time. You don’t want to just go with the first Dogecoin exchange you come across. Take the time to assess your needs and research exchanges to find the one that best suits your needs.
Make a list
The first step is to make a list of exchanges that offer Dogecoin. You can do this by searching for exchanges and seeing if they have the currency to trade.
Once you have a list of Dogecoin exchanges, you need to make sure they offer to trade in your country, and if they do, make sure they offer those services legally. There is no point in opening an account with an exchange that does not operate in your country, and you do not want to get caught using an exchange that does not have the proper licenses or certifications.
KYC and AML
comply with different regulations depending on where they are located and the types of services they offer. Many exchanges will have requirements for Know Your Customer (KYC) or Anti-Money Laundering (AML) practices.
One of the most notable requirements of these laws is that account holders must verify their identities. This could include sending the exchange a photo of a government ID and providing things like bank statements to prove your address.
Many cryptocurrency traders find these requirements a nuisance, but they can benefit the consumer. If an exchange complies with these regulations, it may be a sign that it is reputable. Additionally, these regulations could make it easier for law enforcement to catch perpetrators and recover missing funds.
Regardless of the cryptocurrency, you plan to trade, you need to be careful about which exchanges you choose to use. Fake exchanges and scams are a perennial problem. Beyond that, there have been issues with hacked exchanges or unethical behavior.
Before opening an account with any exchange, you should search the name of the exchange to see if there is any news about previous issues. You should also check their website to see what they are saying about themselves and research their social media presence to see what other people might be saying about the exchange. You can also search for user reviews to get an idea of how the site performs and how it treats the people who use the platform.
You should also try to get a little insight into what is behind the exchange. Look to see if you can find a registered address. Try to find information about the people who own and manage the exchange. If you can’t identify people like the CEO or COO, that should be a reason to be careful. If you can find their names but there is no reliable information on them, that is another cause for concern.
Fees and prices
Most trading platforms charge fees for trading activity. The prices of different currencies can vary from exchange to exchange, but most fees will be based on a percentage of each trade. It is also common for exchanges to offer lower fees for traders who have more volume. Therefore, research the fees of each platform to find which one offers the best rates.
Beyond fees, prices can be an issue as they can differ from exchange to exchange. This phenomenon is called a price premium. It is worth looking for the exchange with the best DOGE prices. Prices will vary between different exchanges, but they should all be close. Traders should beware of any exchange that sells coins at prices well below market value.
The number of users may vary on different exchanges. Activity in different currencies can also vary from exchange to exchange. This is important to a trader because trading volume can have a direct impact on their ability to enter and exit different trades at the required times. High trading volumes can also be another indicator of an exchange that has a good reputation.
If you are looking to trade Dogecoin, the volume and liquidity of the exchange are important metrics to keep in mind. It is worth checking the figures published by the exchange and third-party sites that track volume data.
Should you store your Dogecoin on an exchange?
A feature of many cryptocurrency exchanges is that users can store their coins in the account they have on the exchange. This is convenient for merchants who do a lot of transactions, but it is not the most secure option for storing your Dogecoin.
The problem with leaving coins in your account is that the exchange could have a security breach or you could also compromise your own account. If this happens, all your coins could be stolen. Once the coins leave an account, it is almost impossible to recover the stolen cryptocurrency.
For this reason, it is recommended to withdraw the majority of your Dogecoin after making a purchase. Online wallets offer some security, but they can also be exploited. But storing coins in a hardware wallet will be the safest way. However, with the hardware wallet, the custody of the DOGE you purchased now rests solely with the owner, so research would be needed to know how to operate such a device, as mistakes could lead to a loss of funds.
Should I invest in Dogecoin?
There is no simple yes or no answer to this question. Investing in Dogecoin will be suitable for some people, but it may not be a good idea for others. As with any form of investment, there is a risk. Cryptocurrency prices can experience significant changes in very short periods. If you’ve been following market news, you’ve heard of people who became millionaires in a matter of days and others who lost significant sums of money just as quickly.
In general, Dogecoin could be seen as an investment because it has been around for a while; has a devoted community, and the price has increased in the long run. With that said, you need to be able to withstand the price drops that happen from time to time. If you want to make money investing in Dogecoin, you need to be prepared for the risks and be ready to watch the price rise and fall in ways that can be difficult to digest.
Ultimately, do your own research to find the right wallet for your purposes, and check out different exchanges to find one that meets your needs.