![]() Most of the times, banks and financial institutions have a minimum size for the transaction, which cuts the possibility for small transactions and micropayments.While Dogecoin transactions fees are extremely low (usually only a few cents or even less) Sometimes the fees are more than 10% of the amount transferred. The middleman - usually banks or remittance companies - take fees for transferring money.What if I tell you that now you can do all that in a peer-to-peer manner, without banks, without financial institutions, with lower transaction fees and even faster? That would be an amazing proposition and it could solve many of the pain points of the traditional financial system: Bank’s role is extremely important and it has been the pillar of society for hundreds of years. Every time we purchase a good with our debit/credit card, every time we make a bank transfer, take up a loan or send money to a seller in a different country, we need to have a bank acting as a middleman. Banks also allow us to send value between people and businesses. They keep track of customer’s balance and keep the ledgers of all the customers updated. This has been the role of financial institutions such as banks. Until recently, people always need a centralized trusted party to make business. Why do we need dogecoin? Well, because dogecoin is awesome! It’s a fast, cheap, decentralized and reliable way to exchange value between people! But let’s go a few steps back. For mining, it uses a different algorithm that was inherited from Litecoin: the scrypt algorithm. The ledger is shared across many peer nodes (currently almost 1 thousand in the dogecoin blockchain) in such a way that each machine can verify the individual transaction and announce if the transactions are valid or not.ĭogecoin uses sha256 to link the pages of the book, i.e. Since pages are stacked on top of each other, it’s tough to tamper with old pages.Pages refer to the previous page in such a way that makes it easy to detect and prevent malicious activity.Because each page refers to the previous page with this hash code, it is easy to detect if a page was removed or changed.Each line on the page is a Doge transaction The book is the blockchain, and each page is a block.Try to imagine an old paper book where each page refers to the previous page with a code. ![]() The Dogecoin blockchain (and actually most of the blockchains), can be seen as an old paper book where each page (or block) is linked to the previous page with a code. ![]() The ledger is shared across all these nodes in such a way that each node and miner can verify the individual transactions and audit the blockchain. These computers in the network can also be called nodes and anyone can be a node. How can this be achieved?īeing a distributed system, Dogecoin’s network keeps the ledger in a peer-to-peer network with thousands of computers that are connected and each one of those computers can keep an updated copy of the ledger. These technologies are digital signatures and cryptography, hashing, and a consensus mechanism.ĭogecoin is a blockchain that works as a distributed ledger that allows recording some data or transactions, creating the possibility of having a trustless relationship between parties that maybe don’t know each other. Dogecoin, just like Bitcoin, is made out of a handful of cool technologies that once put together, create the possibility of having a cryptocurrency. Is 90 billion dollars a joke for you? Better you show me your garbage can before calling DOGE a joke.ĭogecoin’s technology is not complex. Dogecoin is no doubt a lot of fun! However, if I was Doge, I would get offended when someone calls me a “joke”. Let’s demystify what is Dogecoin and what is a blockchain.
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