WATCH — Bitcoin, dogecoin and the rise of cryptocurrency
Collecting digital coins isn’t just for gamers
⭐️HERE’S WHAT YOU NEED TO KNOW⭐️
- Dogecoin is surging in value.
- And Tesla has started accepting bitcoin for payment.
- Both are a type of digital money called cryptocurrency.
- The origins of cryptocurrency are shrouded in mystery.
- Press play or keep reading to learn more. ⬇️ ⬇️ ⬇️
It started as a joke, but dogecoin — a digital currency inspired by a meme — is starting to be taken a bit more seriously after surging in value over the past few weeks.
Dogecoin, which is pronounced “d’OHJ coin,” is a form of virtual money, called cryptocurrency, that only exists online.
A couple of engineers invented dogecoin in 2013 by mashing together the most popular form of cryptocurrency, called bitcoin, and a meme of a Shiba Inu dog.
Weird stuff, right? Still, while dogecoin is pawing for attention, bitcoin continues to lead the pack.
The original image that inspired the doge meme, which was used to create dogecoin. (Image Credit: www.knowyourmeme.com)
Invented in 2008, bitcoin is still considered the most popular cryptocurrency, and that popularity continues to grow.
The U.S. electric car and clean energy company, Tesla, started accepting bitcoin as a form of payment in March, shortly after the company’s founder, Elon Musk, bought $1.5 billion US worth of bitcoin as an investment.
Whether we’re talking about the newest puppy on the block, or the grizzled old hound dog, it’s clear that cryptocurrencies are no joke.
So, how exactly do they work? Click play or keep reading to find out.
Are they real coins?
The short answer is no.
Cryptocurrencies are a type of money that only exists digitally.
Most traditional currencies, like the Canadian dollar, are regulated and distributed by a central bank, like the Bank of Canada.
Cryptocurrencies don’t work that way.
Instead of being controlled by a bank, cryptocurrencies are controlled by the users themselves, who exchange it online, using a technology called blockchain.
Blockchain is a special kind of digital database that stores information in chronological order.
A technician inspects bitcoin mining hardware, where people are rewarded in bitcoins for completing mathematical equations on computers that help keep the cryptocurrency system running. (Image credit: Lars Hagberg/Getty Images)
Blockchain tracks cryptocurrency as it changes hands and helps verify who owns it or has owned it in the past.
Any transactions recorded in the blockchain are permanent, meaning they can’t be removed.
They’re also public, so that anybody can see them.
The blockchain is kept up to date by a series of computers solving complicated math problems.
It uses a lot of energy — and costs a lot of money — to run the computers that do this work, so those who do it are paid. They’re called “miners.”
Why do people buy cryptocurrencies?
Over the last eight years, bitcoin’s value has increased approximately 12,000 per cent, according to the CoinDesk Bitcoin Price Index.
While it’s still worth less than bitcoin, dogecoin’s value has increased by the same percentage since January alone, according to financial services company Robinhood Markets Inc.
These sorts of increases make cryptocurrencies an attractive investment for people looking to make money.
For example, at the time of its creation in 2009, a single bitcoin was worth nothing.
Two years later, its value had increased to 10 cents per coin.
As of April 2021, a single bitcoin was worth approximately $77,000 Cdn, according to financial services firm Morningstar Inc.
A bitcoin wallet is software that allows users to store bitcoins. (Image credit: Sean Gallup/Getty Images)
Bitcoin has increased in value as more people exchange and buy it.
And as larger, more established companies like Tesla and Mastercard invest in bitcoin, it gains public credibility and its value grows.
One dogecoin, on the other hand, is still worth less than an American dollar.
Some people are skeptical
One of the main criticisms of cryptocurrencies is their volatility.
That means the value of a bitcoin or dogecoin can jump by large amounts or fall by large amounts, as it has done in the past.
Another concern is that cryptocurrencies are not yet a reliable means of payment.
While some companies are now accepting bitcoin, it’s still an uncommon way to pay for things.