Dogecoin Investment Guide For Uk Residents

Dogecoin is a cryptocurrency that was created as a joke in 2013, based on the 'doge' meme of a Shiba Inu dog. It was designed to be a fun, light-hearted version of Bitcoin, but it has since soared in value, attracting the interest of celebrities such as Elon Musk, Snoop Dogg and Gene Simmons. In the UK, Dogecoin can be purchased on cryptocurrency exchange websites such as Binance, Coinbase, and BC Bitcoin. However, investing in Dogecoin is risky, and the Financial Conduct Authority (FCA) has warned that consumers could lose all their money if things go wrong.

Where to buy Dogecoin in the UK

Dogecoin is a cryptocurrency that was founded as a joke in 2013. It is based on the 'doge' meme, which at the time involved the Shiba Inu. It was created by software engineers Billy Markus and Jackson Palmer, who wanted to create an instant payment system free from traditional banking fees.

Dogecoin is not widely available on exchanges and broker platforms, and some that support it do not have an instant purchase option. However, there are still several ways to buy Dogecoin in the UK.

Binance

Binance is a global cryptocurrency exchange website that requires registration and verification before making a deposit and trading. It is one of the world's largest cryptocurrency exchanges by trading volume and offers several payment methods. It is currently the only exchange that enables users to buy Dogecoin directly by paying with GBP.

Coinbase

Coinbase is one of the longest-running and best cryptocurrency exchanges in the UK. It supports a growing number of cryptocurrencies and has 103 million verified users across 100 countries. It is possible to deposit GBP into Coinbase for free with a UK bank transfer and then buy Dogecoin on the DOGE/GBP spot market without paying more than 0.6% in fees.

CoinJar

CoinJar is a simple and easy-to-use platform that can be accessed via a website or mobile app. It supports 57 cryptocurrencies, including Dogecoin. It is possible to buy Dogecoin on CoinJar by depositing GBP with a UK bank transfer and then swapping the GBP for Dogecoin. Deposits are free, but there is a 1% fee whenever you buy or sell something.

BC Bitcoin

BC Bitcoin is a UK-based cryptocurrency broker that supports buying and selling Dogecoin for GBP. They provide a simple interface, but users need a custodial Dogecoin wallet to receive the purchased coins.

Bittylicious

Bittylicious is a popular exchange that supports buying Dogecoin with a credit card.

Changelly

Changelly is a cryptocurrency broker aggregator that provides users with offers for any crypto pair they wish to trade. It is possible to buy Dogecoin with GBP using this channel, but there is no option to pay with PayPal.

Bitfinex

Bitfinex is another popular choice for investors who want to buy Dogecoin with GBP. The platform supports direct fiat GBP deposits and withdrawals, but users must convert the deposited GBP to BTC, USDT, or USD before buying Dogecoin.

Indacoin

Indacoin is a cryptocurrency broker and an exchange service. It is possible to buy Dogecoin with a card and hold it on your Indacoin account.

Bittrex

Bittrex is another exchange that offers Dogecoin.

How to buy Dogecoin with GBP

Step 1: Identify where to trade Dogecoin (DOGE)

Dogecoin can be bought and sold across many crypto exchanges. The most active exchange is KuCoin, followed by Binance US.

Step 2: Choose a suitable exchange

When choosing an exchange, compare its fee structure, security, and available assets. Most exchanges have maker/taker fees and may include additional withdrawal and deposit fees.

Step 3: Register an account

Create an account with your chosen crypto exchange and complete the KYC (Know Your Customer) process. Once your account is verified, choose your preferred payment method and deposit funds into your account. Most exchanges offer options for bank transfers and credit/debit card payments.

Step 4: Buy Dogecoin (DOGE)

Select Dogecoin (DOGE) and enter the amount of GBP you’d like to trade. Verify the details before confirming your transaction. Once you've received Dogecoin, you may want to store it on a crypto wallet to retain custody of your assets.

Tips:

• If you are new to the crypto space, Binance is one of the well-known cryptocurrency trading platforms. The massive trade volume and the options for other currencies make it the best.
• It is recommended that you move your cryptocurrencies off of exchanges if you are planning to hold on to them. This way, you’ll hold the keys to your wallet, and therefore will truly own your coins.

Dogecoin wallets

Additionally, wallets can be categorised as hot or cold. Hot wallets are connected to the internet, and examples include Dogecoin Core, browser extension wallets, and smartphone wallets. Cold wallets are not connected to the internet, and hardware and paper wallets fall into this category. Cold wallets are generally considered to be safer than hot wallets and are preferred by those who want to hold their Dogecoin long-term.

• Hardware Wallet: A hardware wallet is a small electronic device that is immune to many of the threats that software wallets face, such as viruses and hacks. The Ledger Nano S is a reputable and appropriate hardware wallet that supports Dogecoin and many other cryptocurrencies.
• Dogecoin Core: This is an official Dogecoin wallet that can be used as both a hot or cold wallet, depending on how it is set up and used.
• Browser Extension Wallets: These are hot wallets that can be installed as extensions on web browsers. MetaMask is an example of a browser extension wallet.
• Smartphone Wallets: These are hot wallets that can be downloaded as mobile apps. The official Dogecoin wallet and the Atomic Wallet are examples of smartphone wallets.
• Web-based Exchange Wallets: These are custodial hot wallets provided by cryptocurrency exchanges. For example, Binance, Coinbase, and CoinJar offer web-based exchange wallets.

How to mine Dogecoin

Step 1: Choose the Right Hardware

There are three main types of mining hardware: CPUs, GPUs, and ASICs. CPUs are the least powerful and may not be able to compete with other hardware. GPUs are more powerful and efficient, but ASICs are the most powerful and efficient option.

Step 2: Get a Dogecoin Wallet

You need a crypto wallet that’s compatible with Dogecoin to receive your rewards. Examples include MetaMask, Coinbase Wallet, and Ledger.

Step 3: Download Mining Software

Mining software is required to connect your hardware to the Dogecoin network and direct it to guess hash keys. Examples include CGMiner, EasyMiner, and MultiMiner.

Step 4: Join a Mining Pool

Mining pools are groups of individual miners that combine their processing power and rewards. This increases the likelihood of earning rewards and provides a steadier income.

Step 5: Configure and Start Mining

Configure your mining software for the Dogecoin blockchain by connecting your crypto wallet and selecting Dogecoin as the blockchain network. You can also adjust settings such as the hash-guessing algorithm and electricity limits.

Additional Considerations:

• Cooling: Mining can cause overheating, so establish a cooling setup to maintain the lifespan of your hardware.
• Noise: ASIC mining rigs can be loud, especially if you are running multiple devices.
• Space: Place your setup in a cool, soundproof room or enclosure.
• Electricity Costs: Manage electricity costs by sourcing low-cost renewable energy and adjusting your mining intensity or schedule.
• Compliance: Comply with local and federal regulations, including income taxes on any Dogecoin earned.
• Volatility: Monitor Dogecoin's volatile market price and configure your software to stop mining or switch tokens if the price drops too low.

Alternative Mining Methods:

• Solo Mining: Mine Dogecoin alone with your own equipment. This is best for large-scale miners with powerful ASIC miners as it can be difficult to earn rewards with less processing power.
• Cloud Mining: Rent mining hardware through the cloud. This has a lower upfront cost but can be more expensive long-term and may be subject to scams.

Optimisation:

• Adjust Software Settings: Optimise your mining software settings to balance electricity consumption and block-winning likelihood.
• Allocate System Resources: Adjust your hardware's processing power allocation based on mining difficulty.
• Risk Management: Diversify your crypto portfolio and invest in alternative assets to reduce risk.

Dogecoin mining can be profitable if the price is high enough to cover equipment and operating costs. Many miners operate at a loss, anticipating future gains. It is important to research and remember that there is a high risk due to DOGE's volatile value.

How to sell Dogecoin

Selling Dogecoin is a straightforward process. Here is a step-by-step guide on how to do it:

• Choose a Cryptocurrency Exchange: Select a reputable cryptocurrency exchange that supports Dogecoin, such as Binance, Coinbase, Kraken, or Robinhood. These platforms provide the necessary tools to buy and sell cryptocurrencies, including Dogecoin.
• Sign Up and Verify Your Account: Create an account on your chosen exchange by providing your email address, choosing a username, and setting a strong password. You will then need to verify your account by submitting personal information, including your full name, country of residence, date of birth, and phone number.
• Fund Your Account: To sell Dogecoin, you need to deposit it into your exchange account. If your Dogecoin is already in another wallet, transfer it to the wallet address provided by the exchange. Alternatively, if you don't have Dogecoin, you can purchase it directly on the exchange using a payment method such as a credit/debit card or bank transfer.
• Place a Sell Order: Once your account is funded with Dogecoin, you can place a sell order. You can choose between different order types, such as market orders or limit orders. A market order sells your Dogecoin at the current market price, while a limit order allows you to set a specific price you want to sell at. You can also use a stop-loss order to minimise losses in case of a sudden price drop.
• Withdraw Your Funds: After successfully selling your Dogecoin, you can withdraw your funds from the exchange. You can choose to withdraw in fiat currency, such as GBP, USD, or EUR, or you can withdraw in another cryptocurrency. The withdrawal process may vary depending on the exchange, so be sure to follow the instructions provided by your chosen platform.

It is important to note that the value of cryptocurrencies, including Dogecoin, can be volatile. Always remember to do your research, understand the risks involved, and consider the fees associated with selling and withdrawing funds when using any cryptocurrency exchange.

Frequently asked questions