How To Buy Dogecoin: A Step-by-Step Guide

Known as the token behind “the accidental crypto movement,” dogecoin started as a joke, evolved into a trendy meme coin and now enjoys the status of one of the world’s most popular digital assets. If you’re considering joining the DOGE craze, which began when the coin reached star status in 2021, here’s what you need to know about how to buy dogecoin.

Read: 3 Things You Must Do When Your Savings Reach $50,000

How Can I Purchase Dogecoin?

You can purchase dogecoin just as you would any other cryptocurrency. It’s a fairly straightforward four-step process.

1. Decide How Much To Buy

The first step is settling on the amount of dogecoin you want to purchase. DOGE has a unique distribution structure that allows for an unlimited supply of tokens to be produced over time. That’s an important consideration that will be discussed in greater detail further on. For now, it’s important to understand that the absence of a production cap makes dogecoin especially volatile even by the standards of cryptocurrency.

2. Choose How You’ll Pay

The next step is to decide how you’ll convert cash into crypto — it’s an important determining factor for the next step, which is choosing an exchange. Most exchanges support bank transfers, but some also allow PayPal, debit cards and credit cards. Take caution when using plastic to pay for digital assets. According to Forbes, credit card issuers classify exchange purchases as cash advances, which come with a higher APR than standard purchases.

3. Pick an Exchange

You’ll have to sign up for an exchange to buy dogecoin or any other cryptocurrency, and as millions of FTX users learned the hard way, your choice of exchange matters. The biggest names in the industry — including Coinbase, Kraken, Binance.US and Gemini — are known for stability, security and user-friendliness. Choose one that supports your preferred payment method, is transparent about its security and fees and, of course, lists DOGE.

4. Select a Wallet

You need a wallet to view, manage and trade crypto. The most secure option — but also the most expensive and complex — is cold storage in a physical device called a hardware wallet like Ledger Nano X or Trezor Model T.

Software wallets like ZenGo and MetaMask aren’t as secure as hardware wallets, but they get your holdings off the exchange and out of the sights of the hackers who target them.

The third option is an exchange wallet, which is simple and free, but the least secure choice of all.

How Do Beginners Buy Dogecoin?

Most beginners choose exchange wallets, like Coinbase Wallet, because they’re integrated into the exchanges where novices buy their first coins. They’re free, easy to set up and simple to use. It’s fine to get started with a wallet linked to a trusted exchange while you research more secure software and hardware wallets, but most advanced crypto users quickly move on to off-exchange options.

Where Is the Best Place To Buy Dogecoin?

Exchanges are the most common place to buy dogecoin, but the most common choice might not always be the best.

Consider P2P Trading on a DEX

While an exchange like Coinbase is a logical starting point for beginners, it’s a centralized exchange that facilitates trades. Crypto veterans often opt instead for decentralized exchanges, which let them trade tokens on a P2P basis without an intermediary.

For example, CryptoLocally is a DEX known for its many familiar payment options, including cash, PayPal and bank transfers. As a secure trustless system, trades are fast and cheap — instead of losing percentages to fees, you can actually earn margins on your transactions. In February 2021, CryptoLocally announced it would begin supporting DOGE.

DOGE Has Its Own DEX

DogeDEX is a decentralized exchange built just for dogecoin traders. It functions as an atomic swap DEX and a non-custodial wallet in one application, which means users never have to trust their private keys to the custody of a third party.

Unlike most decentralized exchanges, which are built on a single blockchain network, DogeDEX is a cross-chain, cross-protocol application that supports multiple coins on different blockchains, which is the basis of the atomic swap concept.

DogeDEX reached 10,000 users in its first two weeks.

Dogecoin’s Future

Any discussion about the future of dogecoin must take place in the context of the coin’s unlimited supply.

The Ever-Expanding Ocean of DOGE

Bitcoin billed itself as a hedge against inflation from the beginning because its quantity was finite. Bitcoin’s supply is capped at 21 million and the final bitcoin will be mined in 2140.

Conversely, dogecoin has no supply cap at all.

According to SoFi, miners produce 10,000 DOGE every minute. That’s 14.4 million new DOGE hitting the market every day — more than 5 billion DOGE per year. For context, about 900 bitcoins are mined daily. Dogecoin miners get 10,000 tokens for a block of transactions. That’s about $850 as of Jan. 17, when DOGE was trading at $0.085.

Every reward they chase, every block they complete and every new batch of 10,000 coins they unlock increases supply and therefore reduces the value of the dogecoins already in circulation. Many analysts think that dynamic will prevent dogecoin from ever taking off in value — but that doesn’t mean $1 is beyond the realm of possibility.

The Case for the $1 DOGE

Can dogecoin get to $1.00? According to Coinbase, DOGE’s all-time high is $0.74, so it’s gotten close in the recent past. In April 2021, DOGE’s market cap topped $50 billion — bumping it into the cryptocurrency top 10 — despite trading for only pennies. The reason was sheer volume — there were 130 billion dogecoins on the market at the time. Today, DOGE remains in the top 10 but its market cap has fallen to $11.64 billion — if it hit $1, that number would jump to $139 billion.

Despite losing more than 85% of its value since its high of $0.74, DOGE still could breach the $1 mark. In December 2022, Motley Fool reported on widespread speculation that longtime dogecoin proponent Elon Musk could integrate the token into Twitter as the social platform’s payment system of choice.

Final Take

While Redditors use DOGE for tipping and Elon Musk might build it into Twitter, dogecoin has not yet enjoyed widespread real-world adoption. Like so many other coins, it withered during the crypto winter and its status as a utilitarian token of the future remains a question mark. But if you are looking to take a leap and invest in this coin, the steps to purchasing are straightforward and simple.

Data is accurate as of Jan. 17, 2023, and is subject to change.

This article originally appeared on GOBankingRates.com: How To Buy Dogecoin: A Step-by-Step Guide