Dogecoin is a form of crypto currency said to incorporate the features of Bitcoin and Litecoin as it is based on the same technology. It was introduced in December 2013, so it is still quite young compared to other forms of crypto currency. Dogecoin is a legitimate means of purchasing goods, services and tipping.
How can it be used?
In order to use Dogecoin, one needs a digital wallet. A digital wallet is basically an address that is used for receiving Dogecoins. When one acquires possession of a new wallet, a public and private key is automatically generated and given to the user. The public key is the one that can be shared using which Dogecoins are exchanged between one another. The block chain stores the public key, along with the currency transaction history. Hence, the block chain will help you determine how much currency an account contains, simply by tallying the amounts sent from and received by that particular account.
The private key has to be kept secret by all means as any person who knows it can claim complete ownership of the funds associated with it (at first, the wallet hides the private key even from the owner so he/she does not reveal it unintentionally. When the user backs up a wallet, he/she does not save the number of coins contained in the account, but the private key! This is to prevent unscrupulous users from spending coins and later restoring the original amount from the backup. The private key is simply used for claiming ownership of all the funds that are associated with the public key, contained in the block chain as explained earlier.
Working of the Block Chain:
Consider the block chain as a logbook, where permanent records of all transactions are maintained. Every minute, the block chain is updated with a ‘block’ of recent transactions. Whenever Dogecoins are sent, they are added to the most current ‘block’ and undergo verification for authenticity before being written permanently. As each ‘block’ adds on to its predecessor, we can obtain a chain of ‘blocks’ going back to the start. This is an effective way to prevent double spending, as each transaction is easily traceable. The job of confirming the new block is done by the computing power of ‘miners’. Hence, when one ‘mines’, he/she is actually confirming that the most recent transactions are valid ones. As a form of remuneration for this work, the confirmation of a block gives the ‘miners’ currency in the form of Dogecoin.
How can Dogecoins be acquired?
Getting access to Dogecoins is not at all difficult. It is obtained by means of mining, tips, faucets and of course, by converting other forms of currency through exchanges.
The most common method among the above is mining, as it simply requires free software and ordinary computers. While Bitcoin requires the use of special hardware to make mining profitable (1 Bitcoin is worth hundreds of dollars), Dogecoin mining does not require any such specialized hardware as none has been designed yet to cater specifically to it. This makes it easier to use for those inexperienced in the field of crypto currency.