Dogecoin & Bitcoin: What You Need To Know
It seems everywhere you look—from scrolling through Instagram to bright billboards on the road—there’s this buzz about cryptocurrency and how to get in on it. And with Elon Musk namedropping Dogecoin on SNL, and traders pushing Bitcoin, it seems cryptocurrency is having a serious moment right now.
But how exactly can online “coins” be real money? Just how does cryptocurrency work? We’ll break it down for you, and explain two of the world’s most buzz-worthy cryptos: Dogecoin and Bitcoin.
What Is Cryptocurrency?
In its simplest form, cryptocurrency is a digital currency that can be exchanged online for goods and services. It’s similar to how companies have their own point systems or token systems and can be used to buy something. Remember those tokens you used to get at the arcade as a kid? That’s what cryptocurrency is. And just like those tokens (or even casino chips), you can exchange crypto for real currency and vice versa.
How Do Cryptocurrencies Work?
A big part of why crypto shot up in popularity is because of its security factor. This is due to the fact that cryptocurrencies work using blockchain technology. Blockchain is a way of recording and storing information that makes it difficult—or even impossible—to change or hack into. Basically, it is a digital lender of transactions across networks (the “chain” part of it). Each “block” has a number of transactions. And each time there’s a new transaction, it is recorded in each blockchain participant’s ledger.
Types of Cryptos:
What Is Bitcoin?
Bitcoin is a cryptocurrency created in 2009 by someone with the pseudonym Satoshi Nakamoto. There are no physical coins—just the aforementioned transactions encrypted by series of very complicated math problems. It’s not a government-issued currency and is instead operated by a decentralized authority. By market capitalization, it’s the world’s largest cryptocurrency. Bitcoin was one of the first cryptocurrencies around, and many other cryptos have since sprung up because of it.
What Is Dogecoin?
Dogecoin is an alternative cryptocurrency, also known as an “altcoin.” Altcoins are any coins that aren’t Bitcoins. Dogecoin—named after a meme—was created in 2013 by Billy Marcus and Jackson Palmer. In its nascent stage, Dogecoin was created as a sort of joke against Bitcoin. It may have started small, but it has since then gained more than 5,000% of its original value.
Elon Musk’s Part in DogeCoin
If you’ve heard of Dogecoin, you’ve probably heard it in conjunction with Tesla tycoon, Elon Musk. Here’s why: Elon has long since been a proponent of Dogecoin. In past years, he has tweeted about Dogecoin, causing its value on the market to skyrocket. He also announced that his company SpaceX will accept Dogecoin as payment and will launch a rocket funded by it. All in all, Musk seems to be Dogecoin’s unofficial spokesperson—despite having nothing to do with the creation or ownership of it.
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