Dogecoin is a decentralized, peer-to-peer (P2P) digital currency that lets its users securely and anonymously send or receive cryptocurrency payments online. Dogecoin was initially begun as a joke; however, over time it became one of the most common ways through which cryptocurrency users could send payments to one another, conduct online purchases, and simply engage with each other. It is not a cryptocurrency that brought any technological advancements and was only created to make fun of the other altcoins that came out at the time. However, Dogecoin became a lot more than just a simple parody token over time. Dogecoin is based on blockchain technology, and its blockchain is a large database or a public ledger that stores transaction information.
In other words, whenever someone wants to conduct a transaction within the Dogecoin (DOGE) network, a miner needs to solve a cryptographic puzzle and validate the transaction. In turn, they are rewarded with the native cryptocurrency token within that blockchain network. The blockchain is not stored on a single device, but it is distributed across computers on a global scale, making it a decentralized network. This means that they are not hosted on a centralized server or location but spread out across the world, which in turn makes it extremely difficult for someone to compromise the network or gain control over the network.
With the goal of creating the Dogecoin (DOGE) cryptocurrency token, the original developers behind the cryptocurrency borrowed what is known as a Scrypt-based Proof-of-Work (PoW) consensus algorithm, which was initially used by Luckycoin (LKY) at the time. PoW is the system that designates who gets to update the transaction within a blockchain network based on the amount of processing power they contribute towards solving complex cryptographic puzzles.
Luckycoin (LKY) was this open-source, peer-to-peer (P2P) cryptocurrency that relied on complex cryptographic algorithms as a means of protecting its network; however, over time it became obsolete. Due to the fact that Luckycoin (LKY) borrowed much of its technology from Litecoin (LTC), Dogecoin can be seen as a direct competitor to Litecoin.
Litecoin (LTC) is an international payment system and a cryptocurrency created by a former Google Engineer, Charles Lee, in 2011. Similarly, Dogecoin uses Scrypt in the same way as Litecoin does, a hash function alternative to SHA-256, another function. These functions are computationally intensive, and what this means is that they require a lot of processing power from solid computer hardware, alongside a high level of energy consumption in order for possible solutions to be generated.
In 2014, Dogecoin (DOGE) had its code changed, when the Litecoin and Dogecoin processes were ultimately merged. This allowed them to use the same mining process, and miners could pick which token they would rather mine, LTC or DOGE. As a result of all of this, Dogecoin is an altcoin that has a large user base and is traded against both fiat currencies and other cryptocurrencies on several reputable cryptocurrency exchanges and retail investment platforms. Another mainstream and commercial application of the cryptocurrency token has been in internet-based tipping systems. Social media application users typically tip other users to provide interesting or noteworthy content.
DOGE is the native cryptocurrency token used within the DOGE blockchain network, which serves the role of being a reward for the miners of the token and is an incentive for them to carry on contributing computational power to secure the overall blockchain network. DOGE is the ticker symbol used for the native cryptocurrency token, and it rewards the nodes for confirming and validating the network transactions that occur.
When a node responsible for powering the Dogecoin network wants to verify a transaction, where they essentially verify its authenticity, that node needs to enter a lottery.
This lottery involves a process where a code needs to be guessed, which is given to the newest block of transactions that ultimately get added to the blockchain. The node that gets the right code gets DOGE tokens as a reward, and the transaction can then get permanently recorded onto the Dogecoin blockchain network. This is an event that occurs once every minute and is one of the main reasons why the transaction time of DOGE tokens, for example, is a lot quicker when compared to alternative cryptocurrencies, such as Litecoin. As a result of all of this, Dogecoin is a much faster option for online purchases as well as global money transfers.
Dogecoin does not have a finite number of tokens that can ever be mined. For example, Bitcoin's tokens are capped at 21 million, which means that more than 21 million BTC tokens can never exist. Dogecoin (DOGE) initially started with a supply limit of 100 billion coins which could even be mined.
However, that was changed, and now there can be an unlimited amount of DOGE tokens that can be mined. Note that due to the fact that there is an infinite number of DOGE tokens that can ever be brought to existence and in circulation, this means that DOGE could be a highly inflationary token as a result. This eliminates the cryptocurrency's scarcity as well due to the fact that new DOGE tokens can always be mined.
A Dogecoin miner is the hardware that participant nodes on the Dogecoin network end up using to carry out the mathematical calculations, which is a requirement in regards to checking and validating the incoming transactions of DOGE tokens. This hardware needs to be accompanied by an appropriate, specified software which is a means of getting it all to work.
There are multiple types of Dogecoin miners out there, including computer processors, graphics cards, and application-specific integrated circuit (ASIC) miners. An application-specific integrated circuit (ASIC) is an integrated circuit chip specifically designed for a specific purpose. An ASIC miner refers to a specific device or hardware that uses ASICs for the role of "mining" the digital currency in question.
Once a Dogecoin (DOGE) user requests a transaction with another user, the mining process can begin. In order for a transaction to be possible, all the users of Dogecoin need to have a digital wallet with two keys, one being a private key and one being a public key. Users can request a transaction with any other user if they know their wallet ID as well as their public key. Once the transaction request has been made, the application then needs to alert the Dogecoin nodes (or the miners) to start processing the transaction.
The Dogecoin nodes then validate the transaction if the sender has the right amount of DOGE tokens to make the payment. After they successfully manage to verify the transaction, they can approve the transaction request, after which each miner is in direct competition with the other miners within the network to collect the pending transaction data, which is known as a "nonce." The miners can then apply a mathematical function to create a correct hash number for that specific nonce, which at this point in time is pending. One miner can produce the correct hash number of the nonce, and once they do so, they get rewarded with 10,000 DOGE tokens as a result of their work. Once all of this ends up finalized, both users who were initially involved with the transaction get a confirmation that their transaction was approved, and the requested DOGE amount reaches the wallet of the receiver.
Dogecoin was co-created by Billy Markus and Jackson Palmer on December 6, 2013, when Markus created the token in just a few hours as a parody of Bitcoin. The main goal and the reason for the creation of this token were just to spoof or make fun of the cryptocurrency community at the time because it was very serious, elitist, and limited in many ways. In other words, the creators of Dogecoin envisioned a fun, inclusive, and lightweight community that didn't really take the crypto sphere too seriously, and this would, over time, prove to be one of the main reasons why the token grew in popularity, as it was cheap and easily accessible.
Palmer worked as a product manager at Adobe Inc. in Sydney, Australia, while Markus was a software developer for IBM in Portland, Oregon. Palmer was the creator of the cryptocurrency token, and when Markus found out about the token, he reached out to Palmer to get permission to build the software behind the token. At this point in time, the two creators took the Shiba Inu dog meme and ended up adopting it as the face behind the token.
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