Learn more about Dogecoin, a cryptocurrency inspired by a popular meme, has managed to thrive despite its humorous origins. Surprisingly, its comedic appeal hasn’t hindered its longevity. It proudly supports a committed group of users who have successfully gathered funds for various projects throughout the years.
How does Dogecoin work?
Dogecoin is built on a fork of Litecoin (LTC) known as Luckycoin. Nevertheless, significant modifications have been implemented to the protocol. Let’s explore its functionality.
Blockchain
Just like Bitcoin, Dogecoin also utilizes a blockchain. Blocks are added to the chain through Proof-of-Work. To become full nodes, network participants install open-source software on their machines. This allows them to have a complete copy of the database, which includes all transactions.
The system operates in a decentralized manner, meaning there is no central authority governing it. Instead, users directly exchange information with each other and rely on cryptographic methods to verify the honesty of their peers.
Mining and supply
Dogecoin, a derivative of Litecoin, uses the Scrypt algorithm. However, to ensure security and avoid competition, Dogecoin developers implemented a merged mining model. This allows Litecoin miners to earn Dogecoin simultaneously. Binance Research has conducted a case study on Merged Mining in Dogecoin & Litecoin for further analysis.
In Dogecoin mining, a block is targeted to be generated every one minute, and miners receive a block reward of 10,000 DOGE. Unlike other cryptocurrencies, there is no maximum supply limit for Dogecoin, and currently, over 130 billion DOGE are in circulation. This decision to remove the limit is seen as positive by enthusiasts as it encourages spending and prevents early adopters from gaining excessive profits.
Conclusion
Despite being an asset whose existence revolves around an Internet meme, Dogecoin has developed a dedicated community of users. Many years later, Dogecoin managed to remain among one of the top cryptocurrencies by market cap.
It’s not entirely clear whether the market values Dogecoin as a novelty currency, a viable financial asset, or something in between. But few cryptocurrencies have had the impact that the Shiba Inu currency has – if only for its status as a meme coin. And here is the end of Learn more about Dogecoin article, thank you for reading.