Centralized vs Decentralized Platforms Does Dogecoin Work on Both? | Binance Advantages & Fees

Dogecoin has become a popular crypto coin, and while there is a lot to know overall, there are some tips to know to make it simpler. One big thing to understand is which type of exchange to use before you make any buying decisions.

What Is Dogecoin?

Dogecoin is a specific type of cryptocurrency that originated from an Internet meme: a picture of a Shiba Inu.

In fact, Dogecoin’s creators, software engineers Jackson Palmer and Billy Markus, created and named it as a reference to the early wave of cryptocurrency speculation in 2013.

However, what began as a joke has evolved into a popular cryptocurrency.

Dogecoin has enjoyed some amazing increases in value, jumping over 200% in a matter of days in 2021, and has benefited from celebrity attention, most notably from Elon Musk.

Like other cryptocurrencies, Dogecoin is based on a distributed network of computers. It relies on advanced cryptography algorithms to ensure the currency is nearly impossible to counterfeit, while the network itself remains resistant to hacking attempts.

While Dogecoin can be purchased or traded, it’s also commonly used for online tipping. So, whether you want to acquire DOGE or spend it as a tip, how do you buy Dogecoin in the first place?

Centralized vs. Decentralized Platforms

The simplest way to buy Dogecoin is to use a cryptocurrency exchange or platform, such as Binance.US. These platforms allow you to buy, sell, and store your Dogecoin.

There are two main types of crypto platforms to choose from: centralized and decentralized.

Centralized platforms offer increased convenience and accessibility, allowing you to use local currencies like USD to buy Dogecoin. Additionally, they may offer other attractive features like crypto staking and deposits and withdrawals to commonly used payment methods like debit cards and bank transfer (ACH). For instance, platforms like Binance.US allows you to link a bank account to your account to make it easier to participate in the world of crypto.

Decentralized exchanges are true to what the name implies: There is no centralized entity to facilitate, manage, and oversee transactions. They simply connect individuals seeking to buy or sell crypto.

Decentralized exchanges often use software like smart contracts to execute and complete transactions. At the end of a transaction, the crypto must be stored or held by the buyer. Both types of platforms charge fees for transactions that take place on their platforms.

No matter which type of exchange you choose, you’ll need to establish an account and fund it with currency to buy your Dogecoin. Depending on the platform, you may have different methods available to fund your account. Payment methods that are typically offered include bank transfer (ACH), debit card, credit card, or wire transfer. Some platforms even allow users to link payment services like Apple Pay or PayPal.

Finally, when buying Dogecoin on either type of platform, you’ll need to decide how you want to secure your purchase. For centralized platforms, you can choose to let the exchange store it, or you may be able to transfer it to your personal wallet.

For decentralized exchanges, you are responsible for storing your crypto in a digital wallet. This may add a layer of complexity, especially if you are buying Dogecoin for the first time.

How to Buy Dogecoin in 4 Simple Steps

1) Set up an Exchange Account

Choose a crypto platform and set up an account. This is relatively straightforward. Provide any required information and make sure you’re clear on the platform’s fees and policies before you complete your account setup.

2) Fund the Account

Next, you’ll need to fund your account so you can pay for any crypto you purchase. Payment options for funding your account will vary from platform to platform. For some, you can just transfer money from a linked bank account.

Others may allow you to use a credit card or a payment service to fund the account. Keep in mind that using a credit card could trigger fees on the amount advanced, depending on your credit card issuer.

3) Buy Dogecoin

Remember that funding your account isn’t the same thing as buying Dogecoin or any other crypto. Money sitting in your account just sits there until you do something with it. You’ll need to place a buy order on the platform to purchase Dogecoin.

To do this, enter the amount of Dogecoin you want to buy and select when you want to purchase it. Some platforms will let you place an immediate order at the current market price but will also let you place a price-dependent order — “buy when the price drops to this target.”

4) Store Your Dogecoin

While Dogecoin isn’t physical, you still need to keep it under “lock and key.” As with other cryptos, Dogecoin has a public key that allows it to be sold to or traded with anyone in the world.

But it also has a private key known only to the owner — that’s what needs to be guarded. Fortunately, there are relatively simple ways to store your Dogecoin.

Centralized platforms can hold on to it for you. Or if you prefer total control of your crypto, you can transfer it to a crypto wallet of your choice.

How to Sell or Trade Dogecoin

The most straightforward way to sell or trade Dogecoin is via an exchange. You can sell your Dogecoin on the same platform you used to buy it.

Direct trading with other individuals is also offered by decentralized peer-to-peer platforms, where all transactions are between individuals.

Another way to sell or trade Dogecoin is by using it online. Some stores and companies will accept Dogecoin for goods or services. You can also trade it by giving it away as an online gratuity.

Buying Dogecoin As Part of an Overall Strategy

Cryptocurrencies have distinct strengths and weaknesses if you are considering them as part of your overall strategy. Dogecoin is no exception.

On the plus side, Dogecoin is almost impossible to counterfeit, and the decentralized networks it runs on are almost impossible to bring down via hostile third party intervention. Dogecoin also has seen episodes of tremendous value increase.

Because Dogecoin has been around for almost a decade, due in part to its status as the first memecoin, DOGE has a very dedicated following and passionate support community, which has undoubtedly helped it maintain its relevance and longevity.

Finally, there’s a large supply of Dogecoin, making the individual coin price relatively low compared to other cryptocurrencies. That means you can amass a very large number of coins with relatively little money.

On the other side, Dogecoin can be volatile. The same large supply that makes its price per coin reasonable also means it may lose value over time due to inflationary pressures. As with fiat currencies, higher amounts of cryptocurrencies in circulation may have an impact its value.

Choosing the Right Crypto Platform

As we’ve seen, the actual steps to buy, sell, and trade Dogecoin are fairly straightforward. But so much depends on choosing the right platform. In addition to choosing the right platform for you, based on features you need today, you’ll want to be sure the platform can meet your future crypto needs, too.

Here are a few things to think about before choosing a platform.

Fees

Make sure the platform’s fees are stated clearly and are reasonable. You don’t want any profit you make to be eaten up by excessive fees. Binance.US, for example, offers trading fees up to 10x lower than other major crypto platforms.

Security

Make sure your personal information is safe. Look for a platform that uses multi-factor authentication.

Also, look for one that offers secure options for storing your Dogecoin. A good platform will hold your crypto for you or allow you to transfer your funds to a digital wallet.

Variety Of Crypto

You may want to buy Dogecoin today, but there are many other cryptocurrencies out there — Bitcoin (BTC), Ethereum (ETH), Shiba Inu (SHIB), Polygon (MATIC), and Solana (SOL) — to name a few.

Choose a platform that offers a wide selection of popular and lesser-known cryptocurrencies.

Services

It’s not just about buying Dogecoin or even selling it. Advanced platforms also offer other services like staking to make for a more complete crypto-buying experience.

Simple User Experience

Some crypto exchanges require fairly in-depth knowledge to use. Look for a platform with a simple user experience and clear information about what you’re doing and how best to do it. Buying and trading is already complicated enough.

For a platform that checks all of the boxes to securely buy, sell, or trade Dogecoin and over 120 other cryptocurrencies with low trading fees, get started today at Binance.US.

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