What Is Dogecoin And Is It A Good Investment? At the time, the bitcoin space was populated by users who sought to take advantage of its rising price to profit from an increase in bitcoin’s bitcoin twitter bot retweet. Conversely, Markus decided to create dogecoin in an attempt to reach a broader demographic through a more lighthearted approach than its better-known forerunner.
It’s not taking itself as seriously, it’s not being used by people worrying about whether they’ll become rich. The use of the Shiba Inu dog meme as its avatar was intended to spur further interest in the altcoin as well as acknowledge the playful nature of the cryptocurrency. Dogecoin’s Technology Dogecoin is based on Luckycoin, an altcoin that was characterized by a randomized block reward in the mining process. The Dogecoin ledger uses the proof-of-work consensus mechanism to validate the transactions on its blockchain. However, a notable difference from bitcoin is that it uses the scrypt hashing function. This hashing function is significant in that it is designed to make it difficult for the development of ASICs miners.
Initially, Dogecoin’s blockchain specified that there would be a maximum of 100 billion units of the currency and the mining difficulty would increase with every block. Dogecoin uses a simplified variant of the scrypt key derivation function as its proof of work with a target time of one minute per block and difficulty readjustment after every block. The block rewards are fixed and halve every 100,000 blocks. However, following heated discussions on platforms like Reddit, the developers decided to implement a standard, and permanent reward for every block mined after a certain point in early 2015. The goal for the currency is to keep approximately 100 billion coins in circulation—thus after 100 billion dogecoins are created, rewards will continue at 10k each block.
In addition to the update on block rewards, the March 12, 2014, announcement also included a new difficulty algorithm. It was designed to reduce mining-related price fluctuations. The Dogecoin Community The Dogecoin Foundation is a non-profit founded by members of the Dogecoin community. Moreover, outside of the foundation, the Dogecoin community is active and is quick to support initiatives that involve the use of the altcoin. When Dogecoin first came into the market, it quickly became a way through which Internet users could tip others due to its low fees for microtransactions. The popularity of the coin rose, in part, spurred on by discussions on various social media platforms. Due to these discussions, a number of bots arose that were designed to tip in Dogecoin.