Schwab's Guide To Dogecoin: Investing In Meme-Based Cryptocurrency

Dogecoin is a cryptocurrency that was introduced in 2013 as a fun alternative to other cryptocurrencies. It was created by software engineers Billy Markus and Jackson Palmer and is based on the popular Doge meme featuring a Shiba Inu dog. While it started as a joke, it quickly gained popularity and a loyal community. Dogecoin can be purchased on several cryptocurrency exchanges, including Coinbase, eToro, Robinhood and Kraken. However, it is unclear if it can be purchased using Charles Schwab. This paragraph introduces the topic of investing in Dogecoin through Schwab and provides relevant background information about Dogecoin.

Decide whether to buy Dogecoin

Dogecoin is a cryptocurrency that was launched in 2013 as a joke based on a popular meme character—a Shiba Inu dog that speaks in broken English. It is one of the more controversial and talked-about cryptocurrencies.

If you're thinking about investing in Dogecoin, there are several factors to consider. Firstly, Dogecoin is highly volatile due to its unlimited supply. For its price to increase or stabilise, investors must continually buy more coins. This is in contrast to other cryptocurrencies like Bitcoin, which have caps on the number of coins issued, creating scarcity and helping to retain value.

Secondly, Dogecoin's value is considered to be easily manipulated. Its creators, Billy Markus and Jackson Palmer, distanced themselves from the project in 2015 due to concerns about shady dealers and a toxic environment. Despite this, Dogecoin has a large community of fans and a loyal Reddit following, with a lighthearted and playful nature that has contributed to its popularity.

Thirdly, Dogecoin is a risky investment. It has no intrinsic value, and its price is highly speculative. While it has gained mainstream attention, its future remains uncertain.

Before investing in Dogecoin, it is essential to do your research and understand the risks associated with cryptocurrency investments. Consider your financial situation, risk tolerance, and investment goals. Experts generally recommend investing no more than you're willing to lose with cryptocurrencies, and no more than 3% to 10% of your portfolio in cryptocurrencies.

If you decide to invest in Dogecoin, only invest what you can afford to lose, as the price is highly speculative and subject to market fluctuations.

Find a place to buy Dogecoin

Dogecoin can be purchased on several online platforms. Here are some of the most popular options:

EToro: eToro is a popular online broker regulated by the SEC and registered with FINRA. It offers some of the lowest trading fees in the industry, including no transaction fees for depositing US dollars into your account with a debit or credit card. eToro also has a user-friendly mobile app and allows for fractional ownership of cryptocurrencies, making it possible to buy expensive coins like Bitcoin with a small amount of capital.

Crypto.com: Crypto.com is a fast and convenient platform that allows users to open an account, upload ID, make a deposit, and buy Dogecoin in just 5 minutes. It offers over 250 different coins and provides crypto savings accounts that allow users to earn interest on their digital tokens. However, debit and credit card deposits are charged at 2.99%.

Binance: Binance is the largest cryptocurrency exchange with over 100 million clients. It offers a dedicated platform for US clients with more than 60 digital currencies. The cheapest way to buy Dogecoin on Binance is by depositing funds with a domestic bank wire or ACH, as there are no transaction fees for these methods. Using a debit or credit card will incur a 4.5% fee, plus an instant buy fee of 0.5%. Binance offers a wide range of security controls, including two-factor authentication and IP address whitelisting.

Coinbase: Coinbase is a trusted and secure platform that has been operating since 2012. It is a good option for beginners with little to no experience in trading digital currencies. Coinbase offers more than 50 digital currencies and provides a secure Dogecoin wallet available on both iOS and Android. However, it charges higher fees compared to other platforms, with a 3.99% fee for debit/credit card and PayPal payments.

Kraken: Kraken is a trusted global exchange that offers the lowest fees in the industry. It is constantly rated as one of the most secure crypto exchanges, implementing rigorous procedures to safeguard funds. Kraken offers a minimum order size of 50 DOGE, making it a good option for those looking to gain exposure to a variety of assets.

When choosing a platform, it is important to consider factors such as security, fees, payment methods, and the number of coins offered. It is also crucial to understand the risks associated with investing in cryptocurrencies and to do your own research before making any investment decisions.

Get a Dogecoin wallet

Getting a Dogecoin wallet is a necessary step if you want to use, trade, or hold Dogecoin. There are two main types of Dogecoin wallets: custodial and non-custodial. The difference between the two is that with a custodial wallet, a trusted third party holds the private key to your wallet, whereas with a non-custodial wallet, you are the sole holder of the private key. Examples of custodial wallets include web-based exchange wallets, while smartphone wallets, Dogecoin Core, and hardware wallets are examples of non-custodial wallets.

Custodial wallets are typically favoured by people who trade Dogecoin more frequently due to their convenience. On the other hand, non-custodial wallets are preferred by those who want greater control over their crypto assets. It is important to note that if you use a non-custodial wallet, you must not lose your private keys or seed phrases. Backing up your non-custodial wallet can help prevent this.

Another category of wallets is hot and cold wallets. Hot wallets are connected to the internet, while cold wallets are not. Examples of hot wallets include Dogecoin Core, browser extension wallets like MetaMask, and smartphone wallets. Hardware wallets and paper wallets are examples of cold wallets. Cold wallets are generally considered safer than hot wallets and are preferred by those who want to keep their Dogecoin safe over the long term. However, non-custodial hot wallets, such as smartphone wallets, are still considered secure enough for day-to-day expenses and holding small amounts of Dogecoin.

Ultimately, the best choice of wallet depends on your specific needs and how you intend to use your Dogecoin. It is worth noting that you can always use more than one wallet, as transferring between wallets incurs virtually zero fees. For example, you could use a hardware wallet to store larger amounts of coins and a hot wallet for daily purchases.

Locate your Dogecoin address

Your Dogecoin address is a string of letters and numbers that uniquely identifies your Dogecoin wallet and all of your Dogecoins. The letters and numbers represent a "public key" that is known worldwide and is used in conjunction with a "private key" that only you know. Dogecoin addresses start with a capital D, followed by a number or capital letter. For example, DFabcd1234[...] is a valid address, but Da[...] and cA[...] are not.

To locate your Dogecoin address, open the Dogecoin wallet and click on the "Much Receive" tab. If you hover your mouse over your address and right-click, you can copy it to your clipboard. If nothing shows up, click on "New Address" and create a new one.

It is important to keep your Dogecoin address safe, as losing it will result in the loss of all your Dogecoins. Consider making backups and saving them on another drive for added security.

Additionally, you can use the "new address" function to create multiple addresses for your wallet and give them labels. This is useful if you want to track the source of your Dogecoins or separate your sources for trading purposes.

Decide how to pay for Dogecoin

Dogecoin is a digital currency that was introduced in 2013 as a fun and memorable alternative to other cryptocurrencies. It is built on similar technology as Bitcoin but offers faster and more affordable transactions. Due to its growing popularity, there are several ways to buy Dogecoin.

Choose a Cryptocurrency Exchange

The first step to buying Dogecoin is to choose a reputable cryptocurrency exchange that supports Dogecoin trading, such as Coinbase, eToro, Robinhood, or Kraken. These platforms allow you to buy, sell, and trade Dogecoin and other cryptocurrencies.

Create an Account

Sign up for an account on your chosen exchange using your email address or phone number. You will be asked to provide personal information and verify your identity, which usually takes a few days.

Deposit Funds into Your Account

Once your account is verified, you will need to fund it through a wire transfer, ACH transfer, or credit/debit card, depending on the exchange's rules and regulations in your area.

Buy Dogecoin

After depositing funds, you can purchase Dogecoin by opening the trading platform of your chosen crypto exchange, checking the current price of Dogecoin, and placing a buy order at a suitable price.

Store Your Dogecoin in a Wallet

To truly own your Dogecoin, consider using a software or hardware cryptocurrency wallet, which allows you to have full control over your digital assets. Examples of hardware wallets include the Ellipal Titan and Ledger. For a software wallet, you can use the official Dogecoin Wallet, which is available for both desktop and mobile devices.

Alternative Methods

In addition to cryptocurrency exchanges, there are alternative methods to obtain Dogecoin. One way is through peer-to-peer (P2P) transactions, where you can send or receive Dogecoin directly to or from another person's wallet. You can also use a crypto card, such as the BitPay Card, which allows you to spend your Dogecoin like cash at any merchant that accepts Mastercard.

Remember to always research the risks associated with investing in cryptocurrencies and consider your investment goals and financial situation before deciding how to pay for Dogecoin.

Frequently asked questions