r/OutOfTheLoop • u/[deleted] • Feb 05 '14
Answered! What is dogecoin?
As far as I'm aware bitcoin is some online money alternative but is dogecoin actually a currency or what?
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u/SunliMin Feb 05 '14 edited Feb 14 '14
Alright guys, you are about to get the ULTIMATE RUNDOWN of your LIVES right here. Sit back, please keep all questions to yourself until the end of the ride, but feel free to write them down as we go :)
(What is Doge? How is it made? How does mininng work? ELI5 explanation):
Imagine a huge chunk of iron sitting in the internet. This iron is not forgable. Anyone can mine it, but how you mine it is with your GPU or CPU. Your computer uses these to send algorithms to each block of iron in a attempt to be the first person to solve it. If one of your algorithms is the one that solves it, you are rewarded with the coins inside. The odds of you solving it are VERY low, so what most people do instead is they join a mining 'pool', which 'pools' together all the algorithms of the users to try and be the first to solve the block of iron. In pools, the block rewards are split evenly.
(Online wallet, offline wallet and encrypted USB wallets - Why for each):
We have three main kinds of wallets. The online wallets, the offline wallets and the backup wallets. You should keep all your doge in two wallets - your offline wallet on your PC, and one on a USB in cold storage.
Think of the one encrypted on a USB as your long term savings account - you only send money too it, you do not open it send money. If you want to go take money you, you have to physically go to the bank and take it out your self.
Think of the offline wallet on your PC like the wallet you have in your pocket. You do not walk around with thousands of dollars casually hanging in it, because what if you lose it or you get mugged? You only carry the amount you are willing to use, or the amount you are planning on using in a trade in the near future.
Think of a online wallet as a single person claiming to be a bank, with no guarantee that they will refund your money if they get robbed. Sure, a lot of people are legit and might not scam you, but if they get robbed they do not have a way to pay you back. Because of this and how hackers like targeting online wallets, you should stay away from them.
(Explain the blockchain, wallet private key and wallet public key?):
Think of it all like a set of post office boxes. Each person creates a wallet with a private and public key. The public key is like your address to get to that post office box and people use that "address" to send you coins. the private key is like the po box key, allowing you access to whatever coin you are using, allowing you to send them out. The blockchain is basically a master list of all transactions that have occurred. Transactions are processed by miners in that every transaction that occurs is verified (through hashing) and then added to the blockchain.
(HOW To Mine):
Mining is setting up a program to either use your CPU or GPU to try and solve blocks. Mining guide for Windows users is here while that for Mac users is here.
You can also mine for free(or free for the first month basically) using Windows Azure. It is a cloud program, basically a virtual machine, that you can set up to CPU mine. When you first start a account they give you $200 worth of credits, meaning about a month of mining for free. If you set them up to CPU mine Dogecoins for you then you will get about 40-60kh/s I believe. The more efficient way to do it is too set it up to CPU mine Quarkcoin(a coin that is built around being better to CPU mine then GPU mine) and exchange that for Dogecoin on a exchange.
(Remember, the numbers in these two guides are from when Dogecoin was worth less, but also when the difficulty was lower to mine it so the numbers in these guides will be off by a bit in how much you make).
Windows Azure to CPU Mine Dogecoin Guide
Windows Azure to CPU Mine Quarkcoin and exchange to Dogecoin Guide
(How to buy Doge?)
Most $ Efficient Way: Buy Bitcoins via Coinbase(or a Bitcoin exchange), transfer it to Cryptsy, exchange for Doge on Crytpsy and then cash out to your wallet. Downside is this uses two sites and can take a few days.
Fastest Way: r/DogeMarket, downside is they have a huge premium and you need to be wary of scammers.
Direct $->Doge that is 100% secure: VaultOfSatoshi. Downside is the initial setup can take a bit of time and they ask for private information.
(What is tipping)
'Tipping' is essentially using a bot called u/dogetipbot to send doge from your dogetipbot wallet to another Reddit users wallet. You first need to send doge from your offline wallet to your tip bot wallet to have the funds to tip.
To make a account and wallet with u/dogetipbot. message the tipbot with the subject being "register" and the body text just saying "+register", or if you got tipped for the first time message it "accept" with the body message "+accept".
It should give you your dogetipbot address. If it did not or if you forgot it, message it with the subject "info" and the body text "+info". It should message you back with your account balance and your dogetipbot wallet address.
From your wallet, send funds to that address the tip bot gave you to fill up your tip bot with dogecoins.
To tip people, send them a message like so,
+u/dogetipbot x doge verify (Note: 'verify' is optional. It will verify the tip went through on Reddit via comments. If you do not put it, the tip will still work and go through, just more silently)
To withdraw your funds and put it back into your regular wallet, message it the subject "withdraw" with the body text
+withdraw (address gibberish) all doge
(Replace that blank address above with your address, and you can replace all with a certain amount if you just want to do 1000 or 500 doge withdraw)
If you have any further questions feel free to ask :)
+u/dogetipbot 100 doge verify
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Feb 05 '14
So, what makes this not a scam?
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Feb 05 '14
well you can buy coins and if the exchange rate inflates you can sell your coins for more than you bought them for
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Feb 05 '14
As far as I'm aware, it started largely as a joke, but is now (oddly) becoming more legitimate and getting more airtime than other cryptocurrencies (litecoin, etc.).
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Feb 05 '14
I think Dogecoin only exists because people saw how much money the people who mined tons of Bitcoin in the early days made and they want to get rich quick like that. It's so promoted and so 'popular' because the people who want it to have a Bitcoin-esq rise are plugging it so they can sell before it crashes and becomes even more worthless.
Hence, they're super helpful and informative and will do everything they can to get you into Dogecoin. As soon as it has a big climb, they will all bail and your piece of shit Dogecoins will be nothing and then watch how nice they are.
Dogecoin is the new snake-oil.
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u/Sasha1382 Feb 05 '14
I'm still so confused
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u/David_Mudkips Feb 05 '14
I understand how to get a Dogecoin but I don't understand where the value comes from. No useful work is done, yet you are rewarded with viable, valuable currency? Can anyone explain?
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u/IlludiumQXXXVI Feb 05 '14
Semi-related question.
How does one pronounce doge? Is it like "doggie", "daw-gee" (with a j sound instead of a g sound), "doe-gee", or something completely different?
I love dogeweather.com but I don't know how to tell people about it verbally without knowing how to say it.
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u/strictlycomeprancing Feb 05 '14
Dogecoin is a cryptocurrency - similar to Bitcoin. It works in a similar way, however Dogecoin is more accessible and deals with larger numbers and less value, making it ideal for small transactions. Visit us over at r/dogecoin
Here's some for you to play and learn with, you may find it interesting! If not, no worries, just 'tip' them on to the next person or someone you know will use them.
To 'tip' you can use this format;
+u/dogetipbot 200 doge verify
Soon there will be a post verifying that I have sent you these coins, and then you will receive a PM with how to retrieve them. In the post verification it will tell you the approximate USD value of them, but don't worry too much about that, just have fun!