DogeCoin (DOGE) is one of the more lighthearted cryptocurrencies doing the rounds, but don’t let that put you off. This guide shows you how to buy and trade DOGE in 2020.
Where to buy Dogecoin
Read on to find out more about DogeCoin and how it works or skip ahead to our step-by-step buyers guide if you’re up to speed and ready to invest.
What is Dogecoin?
With a logo that features a dog from a popular internet meme, you would be forgiven for thinking DogeCoin is some sort of spoof, and to some extent, you’d be right. DogeCoin started life as a joke back in 2013, but against all the odds, it’s still going strong in 2020 and has built up an impressive social media following.
Expectations for DogeCoin weren’t that great, but thanks to a dedicated online community, the cryptocurrency has not only stayed afloat when other coins have failed, it has also thrived and become a major cryptocurrency in its own right.
How does Dogecoin work?
DogeCoin was forked from LuckyCoin, which was forked from LiteCoin which is a light version of BitCoin, and while similarities remain, the main difference between DOGE and Bitcoin (BTC) and LiteCoin (LTC) is that DOGE in an inflationary rather than deflationary cryptocurrency. This means there’s no cap on the supply of DogeCoin.
Deflationary coins such as BTC and LTC encourage hoarding as the value of coins goes up with demand and demand increases when there’s a scarcity, whereas if there’s no cap, miners will continue to replace lost coins and keep the supply stable.
How to buy Dogecoin online – step-by-step guide
Step 1. Get a suitable wallet
As DogeCoin is now a well-established cryptocurrency, there are plenty of compatible wallets to choose from. We have taken a look around and selected a few of the more popular wallets out there:
- TREZOR One Wallet: One of the safest ways to store cryptocurrency is in an offline hardware wallet such as the TREZOR One Wallet. With great support, maximum security and an entry-level price, you can’t go too far wrong here.
- Coinomi wallet: This mobile wallet is easy to set up and use and offers multi-coin support. It’s compatible with Android and iOS and it won’t cost you a penny, so it’s ideal if you are on a budget.
- DogeCoin Wallet: this list wouldn’t be complete without mentioning the original DogeCoin Wallet available as a desktop or Android mobile app free of charge from the DogeCoin website.
Step 2. Find a Dogecoin exchange
There are plenty of exchanges offering DogeCoin these days so you won’t have a problem getting stuck in. However, it’s a good idea to shop around and find the best prices and lowest fees. Here are some of the more popular exchanges where you can grab some DOGE:
- Binance: Arguably the best place to go for your DogeCoin, Binance is well established and, in terms of trading volume, the biggest exchange for cryptocurrencies. It’s also one of the most secure places to buy and sell DogeCoin. However, as it’s a crypto-to-crypto exchange, you might want to pick up some BTC before you start.
- Poloniex: A US based exchange that offers users a great interface with some useful advanced settings to keep the pros happy.
- Bittrex: Built on cutting-edge technology, Bittrex offers users a seamless way to buy and sell a wide range of cryptocurrencies. This exchange is popular with newbies and seasoned experts alike.
Step 3. Withdraw your Dogecoin
Keeping your DogeCoin in the exchange might seem like the best option if you’re looking for an easy life, but we always recommend you withdraw your funds as soon as you can as even though the exchanges have improved their security, nothing is as safe as your own wallet.
How to trade Dogecoin – step-by-step guide
You might not need a wallet if you only intend on trading as that entails taking a position on whether you think the price of a given cryptocurrency will rise or fall over a set period of time rather than actually buying and owning it.
Step 1. Find a broker
If you’ve noticed how wildly the price of cryptocurrencies can fluctuate, you’ve probably already thought about trading and had a look online for a broker. There are plenty out there that support cryptocurrency trading, but it’s a good idea to do some research before committing yourself. Plus500 and eToro are two of the more popular trading platforms out there.
Step 2. Deposit money
Once you’ve chosen your broker, you’ll need to deposit some cash before you can start trading. The minimum requirement is usually around 100 – 200 USD, but some brokers require payment in BTC.
Step 3. Decide how you’d like to trade
Trading on cryptocurrency is done either by Spread Betting or CFDs (contract for difference). These are both quite similar in that whichever method you choose, you will be speculating on the value of your chosen currency. If you aren’t familiar with Spread Betting or CFDs it might be worth doing some further research before you begin trading.
Step 4. Start trading
If you’re a beginner, it’s worth setting up a demo account to get a feel for what to expect when you start trading on your live account. As you may be aware, cryptocurrency can be highly volatile meaning the price can climb very steeply or drop off the edge of a cliff seemingly without warning so it’s easy to make or lose money very quickly.
As a cryptocurrency trader, you will try to predict whether the price will increase or decrease over a set period of time. If you think the price will rise you should take a long (buy) position whereas if you think the price will fall you should take a short (sell) position.