What is Dogecoin and How to Invest in It in India?
Dogecoin is one of the most popular cryptocurrencies, quite well known, and a rather successful cryptocurrency-but certainly not founded on some grand mission to overthrow the financial world like Bitcoin and Ethereum. Instead, it was actually founded as a joke. It may have started as a meme currency, but what really opened up the digital finance ecosystem with tremendous fan-following across the world-not forgetting in India-is indeed Dogecoin. So let’s break it down for you: what Dogecoin is, how it works, and how you, the Indian investor, can participate in this exciting-and might we add, precarious-asset class.
What Is Dogecoin?
Beginning in December 2013, Billy Markus and Jackson Palmer launched a coin intended as a joke but funny and also as a parody of the at the time emerging controlling cryptocurrency market-one controlled at the time by Bitcoin. Even the logo was a Shiba Inu dog sporting the popular meme, “Doge,” so a light, meme-based coin became something for play rather than any serious financial tool.
Coming from what at first seemed rather innocuous origins, Dogecoin had enjoyed years of broad growth. Growth in Dogecoin came through virality in social media and significant endorsements, the latest of which came from Elon Musk, the CEO of Tesla and SpaceX. The price surges had been caused by his tweets previously, catapulting what was then a rather obscure cryptocurrency into one of the world’s top 10, in terms of market capitalization.
Dogecoin also employs a proof-of-work blockchain like Bitcoin. In this regard, the challenge of this new currency is tied to mining, where the computers are utilized to give solutions to those complex mathematical problems as an avenue for verifying transactions. Despite its inflationary supply, the Dogecoin still remains one of the favorite choices within the market whether for a trader or enthusiast.
How Does Dogecoin Work?
It is an electronic book with no central authority running, recording all the transactions, the blockchain. Now, there really isn’t a difference between Dogecoin, Bitcoin, or Ethereum, to mention a few. The trick to verification is through mining, whereby miners use their power in computing in solving some of the cryptographic puzzles to prove indeed that those transactions are legitimate and may be added to the blockchain.
Maybe the biggest difference between Dogecoin and Bitcoin is from the inflationary side. Because there’s a finite supply of 21 million Bitcoin, there isn’t a defined supply with Dogecoin and roughly 5 billion new Dogecoins are mined every year that certainly makes the cryptocurrency much more prolific and arguably less prone to deflation. Of course it keeps its transaction fees really low but limits its long-term store-of-value potential.
These are some of the principal usability applications of Dogecoin, including;
- Tipping : The majority of the social media users spend billions of dolars in giving out in tips to their content creators.
- Charity : Use Dogecoin for various causes funding initiatives to give clean water and other community-driven projects, among many others.
- Microtransactions : Perfect use for small fees on transactions with low payments or microtransactions.
Why So Much in India are Using Dogecoin
Indian front from Dogecoin: gaining strength gradually. Large numbers of Indian crypto fans are being attracted for number of reasons:
- Elon Musk Influence: Surely one of the strong driving factors behind the popularity of Dogecoin internationally and, within India, is definitely Elon Musk. His tweets and other similar comments were pretty much impacting the coin so simply in word, moving prices. Hence it has been an excellent investment for Indian players who wanted to seize the opportunity of short-term benefits. The impact of Elon Musk has enabled the coin to reach mainstream media and become a household name in the crypto zone.
- Community and Culture: Vibrant enthu-siasts, a fervent giving community, andDogecoin as a meme coin spoke directly to the young Indian investor who enjoys that and co-owns Dogecoin. Everywhere online communities-the so-called subreddits along with popular social media sites-become crucial for Indian investors to connect, share news, and learn from others regarding crypto-currency.
- Cheap and Easily Available: In comparison to the very expensive Bitcoin that requires tens of thousands of dollars to lock up one unit of bitcoin, Dogecoin is much easier and comes in much cheaper than that. This therefore means that Dogecoin is affordable, easily accessible, and within the easy reach of new entrants into the world of cryptocurrencies. There are investors in India only now beginning to discover the world of cryptocurrency, and therefore, Dogecoin is an acceptable option for them because it can easily be accessed.
- Volatility and Quick Gains: The Cryptocurrency market is always known to be volatile, and Dogecoin won’t make an exception. Already in India, the risk-adventure loving traders, who are focusing on quick returns, will enjoy this movement.
- Indian Crypto Exchanges: Most of the crypto exchanges that have been operating in India have enabled the Indians to buy, sell, and trade the Dogecoin. Some of the leading crypto exchanges found in India include: WazirX, CoinDCX as well as ZebPay, and some others trading various cryptocurrencies .
How to Invest in Dogecoin in India Step-by-Step
If you want to invest in Dogecoin, here’s a very simple guide that you can refer to get a hold of it through the following process:
1. Choose a Cryptocurrency Exchange
To buy Dogecoin in India, you first need to choose a good cryptocurrency exchange. Here are some of the best exchanges where you can buy, sell, and trade Dogecoin:
- WazirX: The largest crypto exchange in India. Trading DOGE with WazirX allows users to trade it against INR Indian Rupee besides other cryptocurrencies like Bitcoin and Ethereum.
- CoinDCX: This is a repute Indian exchange which supports very many altcoins including the Dogecoin; except for this wide range of altcoin, it’s just waiting to be traded and invested in.
- ZebPay: A stalwart from among the oldest exchanges for cryptocurrencies in India, ZebPay hosted Dogecoin and many other leading cryptos. Find out how you can get your account open.
You will go ahead and open an account in one of the exchanges you have selected for using; upon succeeding in this, when you will proceed to verify your details through the KYC process, you will include your email address, phone number, and also your proof of identity.
To buy Dogecoin, you need to fund your exchange account. The major money deposit-through exchanges are the modes with which you can place orders. They are mainly- bank transfers, UPI payments, and wallet transfers-most of the India exchanges support money deposit.
**4. Buy Dogecoin
Now that you have paid for deposit, you can leave your search and look for the trading pair DOGE/INR, place an order for it, and then figure out what kind of order you want to place. There are two types of orders
- Market Orders: Sell or buy Dogecoin at the going rate.
- Limit Order: You specify how much you want to buy or sell Dogecoin at what price. When the price crosses your value, your order is executed.
5. Protect Your Dogecoin
Once you have bought Dogecoin, you are likely to be encouraged to store it. There is an exchange wallet, but most places will steer you toward something like Ledger or Trezor as a kind of hardware wallet if you’re going to hold your Dogecoin for more than just a short period. The private keys when kept offline cannot get hacked online.
6. Watch Your Investment
Since it is a highly volatile coin, therefore, with great vigilance in the market is required. You will find apps and tools, where you may track the price fluctuation of Dogecoin and other news events that might be affecting the market value of this coin.
Risks of Investment on Dogecoin
It is an excellent opportunity, though to be weighed against the risks an investment in a cryptocurrency with this type of history would pose. Here are some of the major ones:
- Volatility: The price of Dogecoin may see a huge fluctuation within short time frames, so your investment will undergo huge spikes and falls.
Regulatory Uncertainty: As of now, the regulatory stand on cryptocurrencies in India is not very certain. Since India does not ban crypto trading, such future regulations may well have prospects for the future price and availability of Dogecoin.
The speculative nature: most of the value of Dogecoin is held as speculative money based on social media trends and celebrity endorsements. Hence, it is very susceptible to instant price moves against any reaction to news or tweets .
Conclusion
It’s one of those cryptocurrencies that has been widely used worldwide since it was born as a meme coin back in 2013, in terms of well-structured communities and adoption rates. Still, for Indians who want to invest in cryptocurrencies, Dogecoin is a cheap entry point, though pretty speculative and volatile-so of course, great caution has to be exercised by any one who manages to get his feet wet with it. But surely, it is going to be part of any diversified investment strategy.
To say, the mantra for an Indian investor just entering the crypto world would be start small, watch markets closely, and, of course, do due diligence. Never invest more than one can afford to lose.
Happy investing!
