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Q: How to Use a Dogecoin Faucet?

A Dogecoin faucet will ask users to enter their crypto wallet address (also known as a public key). After entering the wallet address, a user must complete whatever task the faucet requires. In exchange for these tasks, users could be rewarded with Dogecoins.

Oct

2021

What Is a Dogecoin Faucet? Where Can I Access One?

By Brian Nibley | Growing Wealth, invest, Investing | Comments Off

A Dogecoin faucet is an app or website that gives out DOGE (pronounced DOHJE) in exchange for completing simple tasks.

So how do faucets work? How do you find them? And are there any risks associated with using faucets? We will answer questions like these in this article.

What is a Dogecoin Faucet?

The name “faucet” reflects the fact that the rewards are very small, as if they were drops of water dripping from a faucet.

Free Dogecoin faucets send a few DOGE, usually one or two Dogecoins, to a user’s crypto wallet. To claim these rewards, users often have to perform a task like:

• Watch product videos

• View advertisements

• Complete a captcha

• Solve a puzzle

In exchange for these tasks, users could be rewarded with Dogecoins.

Why Were Dogecoin Faucets Created?

Crypto faucets have their roots in the very early days of cryptocurrency.

When Bitcoin was only a few years old, 1 BTC was worth less than a penny. Some early adopters took it upon themselves to create new, fun ways to spread the word about crypto.

Among them, developer Gavin Andresen believed in the future of Bitcoin and came up with a way for more people to learn about cryptocurrency. His idea was to give away free Bitcoins in exchange for completing Captchas.

The first Bitcoin faucet ever created paid out 5 BTC in exchange for the simple task of clicking images. Again, this was at a time when one Bitcoin was worth less than a penny. Today, 5 BTC would be worth about $250,000.

Over time, faucets for popular altcoins sprang up as well. When software engineers Billy Marcus and Jackson Palmer launched DOGE in 2014, DOGE faucets quickly sprang up for what was originally a joke currency. DOGE is a good fit for a faucet considering it has very low fees and was worth a tiny fraction of a penny when it was first created. Since it’s an uncapped currency, it’s also unlikely that the price will go up dramatically in the future.

How to Use a Dogecoin Faucet

The only things required are a computer with internet access and a Dogecoin wallet. Many popular crypto exchanges and their mobile apps support DOGE, providing users with a DOGE wallet.

A Dogecoin faucet, also known in the DOGE community as a “water bowl,” will ask users to enter their wallet address (also known as a public key). This is a necessary step so that the faucet knows where to send coins. If a user enters the wrong address, they won’t receive any rewards.

After entering the wallet address, a user must complete whatever task the faucet requires. Some faucets only require users to click a button to receive one or two free DOGE.

Note that there will be a time limit placed on how often someone can use the faucet. For example, the same person might only be able to use the faucet once a day or once every several hours. This prevents individuals from spamming the faucet and draining it of all its coins.

Keep in mind that faucet rewards are very small, and as the price of a coin rises, the rewards get even smaller in crypto terms. Using faucets is not a very efficient way to start building a crypto portfolio.

Are There Any Risks With a Dogecoin Faucet?

A Dogecoin faucet can come with some potential risks, as anything related to investing in cryptocurrency generally does.

Phishing scams have utilized crypto faucets in the past, seeking user information that they later use to target individuals for exploitation like identity theft or other crimes.

That’s why before using a faucet, you should first check to make sure it has a legitimate reputation. If there have been complaints from users in the past, it might be wise to consider looking for a different faucet.

It can be helpful to look at the website that hosts the faucet. A true faucet only has a single webpage with one function: to distribute coins. This only requires a place for people to enter their wallet address and a button to click, usually with a Captcha underneath it.

This feature should be the main attraction of the site. There might be some images of dogs or a variation of the Doge meme, and maybe some FAQs or other commentary. But if a “faucet” site has more than that, the odds of it being some sort of scam go up dramatically.

There’s also the risk that Dogecoin faucet users will be bombarded with advertisements and ad-tracking cookies in their browsers. Because most faucets are free, they tend to commoditize user’s time and traffic.

Finally, the high volatility of DOGE makes it a risky investment, no matter whether you’re getting it via a faucet or some other route. Some detractors have even compared DOGE to a pump-and-dump scheme.

Can I Mine Dogecoin?

Most cryptocurrencies can be mined by almost anyone.

Without getting into all the details, mining Dogecoin involves running powerful computers known as miners that process network transactions. In exchange for this work, miners receive block rewards of fresh Dogecoins. A new block of transactions is mined about once every minute on the Dogecoin network. The reward for each block is 10,000 DOGE, or about $2,500 currently.

Mining DOGE can be done alone or in a pool. For most people, it’s easier and more profitable to mine as part of a pool.

Anyone who wants to start mining Dogecoin will have to answer several questions, especially the following:

• Will you mine solo or join a Dogecoin mining pool?

• What Dogecoin mining hardware will you use?

• What Dogecoin mining software will you use?

The Takeaway

You can find Dogecoin faucets through a simple search online or using a directory like this one. Be careful though, as some sites could use the allure of a Dogecoin faucet to trick people into giving up sensitive information. You should only need to enter your Doge wallet.

Photo credit:iStock/Ksenia Raykova

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Oct

2021

12 Factors that Make the Price of Bitcoin Go Up

11 Factors that Make the Price of Bitcoin Go Up

By Brian Nibley | Growing Wealth, invest, Investing | Comments Off

In 2009, the Bitcoin network went live and the world changed forever. The first cryptocurrency started out with a value of $0, and it took years before bitcoins gained value in terms of any national fiat currency. But at the time of writing in late September 2021, the value of Bitcoin had risen to over $47,000, after beginning at $0 just twelve years earlier.

There are a number of factors that drive Bitcoin’s prices — including its sudden price surges and steep drops. Here are 11 factors.

1. Supply and Demand

Part of what determines Bitcoin price is supply and demand. The Bitcoin protocol is designed to limit the supply of new coins. A new block of transactions is mined about every 10 minutes, and miners receive a set reward of new bitcoins for finding each block.

This reward amount is steadily reduced overtime and there are only 21 million bitcoins that can ever be mined. As of June 2021, about 18.74 million bitcoins had been mined, leaving 2.26 million bitcoins remaining. It’s estimated that the final bitcoin will be mined sometime around the year 2140.

On the other hand, the fiat currencies that prices are measured in have no supply cap and are always being created in ever-increasing amounts. This can result in more fiat currencies chasing fewer bitcoins, which can lead to higher Bitcoin prices.

2. Bitcoin Halving

Halving is part of the Bitcoin protocol that contributes to the supply and demand dynamics. Rather than new bitcoins being created at a steady or ever-increasing rate, the reward that miners receive for mining new blocks gets cut by 50% every 4 years or so.

In 2009, the block reward was 50 bitcoins. Over the next 11 years, the reward was “halved” three times, or reduced as follows:

• 2012: 25 bitcoins

• 2016: 12.5 bitcoins

• 2020: 6.25 bitcoins

In this way, Bitcoin remains a deflationary currency thanks to the process of Bitcoin mining. Fiat currencies, being inflationary, work in the opposite manner. Their supply increases each year with no limit on how many currency units can be created.

3. Monetary Policy

Because Bitcoin has a fixed supply limit, the price tends to correlate with the supply of new fiat currency being created. An increase in the money supply can be part of what drives up Bitcoin’s price. However, this isn’t a hard and fast rule — and past performance doesn’t always indicate future results.

It is worth noting that throughout 2020 and early 2021, the money supply in the U.S. saw massive increases to the tune of trillions and trillions of new dollars being created. During this same period, the price of Bitcoin rose from under $4,000 in March 2020 to over $60,000 in April 2021. When it comes to questions of what affects the Bitcoin price, monetary policy is thought to be a key factor.

4. Regulatory Factors

Regulatory news can also affect Bitcoin price. Some people believe that national governments will one day create such strict crypto regulations around Bitcoin and companies that use it that the technology will not survive. Because of this fear, sometimes it only takes a simple statement from a regulatory agency to cause prices to tank.

At the same time, some regulation can also be seen as a positive sign. It signals that the technology is seeing increased adoption and becoming more and more accepted. So, when regulatory agencies respond favorably to Bitcoin or announce new regulations that seem benevolent, this can be part of what makes Bitcoin go up.

5. Memes and Social Media

While technical matters and serious issues can contribute to what drives the Bitcoin price, more light-hearted factors can also influence what makes Bitcoin go up or down. Memes circulating on social media can sway sentiment toward crypto markets and possibly impact prices.

6. Mainstream Media

In addition to social media, the regular news cycle can also influence Bitcoin price. Almost every time Bitcoin suffers a price correction, numerous mainstream media outlets begin publishing negative news.

Some of these can be so pessimistic that they fall into the category of what’s become known as “Bitcoin obituaries,” where a media outlet proclaims that Bitcoin has died. Sometimes influential politicians, bankers, or bureaucrats make negative statements about Bitcoin too, leading to similar effects on price.

On the other hand, when overall media coverage is positive, this can make the price of Bitcoin go up. In 2020 and 2021, news about influential investors making bets on Bitcoin were seen as significant factors with regard to what makes Bitcoin go up, as well as a factor in Bitcoin’s volatility.

7. Miners

In Bitcoin mining, powerful computers process transactions for the network, keeping Bitcoin running in a decentralized way. Mining operations continue running, at least in part, with funding from the bitcoins that they mine.

But miners have to be very careful about what they do with their new bitcoins. If miners believe the price of Bitcoin will go up in the future, they are likely to hold their coins for some time. If miners believe prices will go down soon, they might sell their coins immediately.

Miners refusing to sell new coins can be part of what makes Bitcoin go up, as new supply never makes it to crypto exchanges where it could drive prices down.

8. Hash Rate

The Bitcoin hash rate is one of the most important metrics in Bitcoin. The hash rate indicates how hard miners are working to solve the mathematical problems needed to process transactions. The more miners that are contributing computing power, the higher the hash rate.

While there’s disagreement about whether or not hash rate is part of what affects the price of Bitcoin, there does appear to at least be some correlation. If nothing else, a higher hash rate makes the network more secure and signals confidence in the near-term.

Recommended: What is a Good Hash Rate?

9. Network Adoption

Bitcoin is the world’s first decentralized monetary network. The more people using the network, the more valuable it tends to become. (This same principle holds true for things like social media networks, too.)

When it comes to the Bitcoin network, one of the main metrics used to measure adoption is the number of new crypto wallets being created. New wallets indicate that more people are using Bitcoin, some of them presumably for the first time. Sometimes when a lot of new wallets are coming online, this can be a sign of confidence in the technology and be part of what makes Bitcoin go up.

10. Risk Appetite

General sentiment in financial markets can be part of what makes Bitcoin go up. When investors feel comfortable taking on more risk than usual, they could be more likely to put money into Bitcoin.

On the other hand, some Bitcoin proponents believe Bitcoin to be more of a safe haven asset (the opposite of a risk asset). Bitcoin has a limited supply.

11. Technical Analysis

Crypto technical analysis can influence the price action of almost any tradeable asset. TA involves patterns identified by computer-generated data and from human eyes identifying patterns on charts. When a certain pattern emerges, it’s thought that prices could be about to move upward or downward, depending on the type of technical setup.

The Takeaway

When it comes to what makes Bitcoin go up, there are at least a dozen potential factors. Many of them are related to market sentiment, the status of the Bitcoin network, and supply-and-demand dynamics.

Photo credit: iStock/cokada

Oct

2021

Can Dogecoin Reach $100? Or Even $1? $10? $1,000?

By Brian Nibley | Growing Wealth, invest, Investing | Comments Off

After rising from about $0.0002 to more than $0.70 in a matter of months, many people have found themselves asking the question “How high will Dogecoin go?”

Many people investing in cryptocurrency for the first time appear curious about DOGE and other altcoins. Even though the DOGE price crashed more than 70% all the way down to $0.20 before recovering somewhat, Dogecoin still finds itself among the top 10 cryptocurrencies by market cap.

But will this always be the case? Can Dogecoin reach $1? What about $10 or even $100 or more?

There are several reasons the odds are against DOGE climbing too much higher. Valuations like $1 or even $10 are theoretically possible. But a price target of $100 or more, isn’t realistic for DOGE, given the way the coin works.

While it’s impossible to predict the future when it comes to the price of DOGE or any other investment, we can make a reasonable hypothesis as to whether DOGE will ever reach $100.

Recommended: How to Buy Dogecoin (DOGE)

Table of Contents

Will Dogecoin Reach $1?
Can Dogecoin Reach $10?
Can Dogecoin Reach $100
Can Dogecoin Reach $1000

Will Dogecoin Reach $1?

Dogecoin reaching $1 is a distinct possibility. This would be less than 50% higher than the all-time high of about $0.70 per DOGE.

The question “can Dogecoin reach $100,” or $1, or any price for that matter, has to do with two things: DOGE’s market cap and its mining dynamics.

Understanding the size of the DOGE market cap in relation to its new supply makes it clear how high the price of DOGE can or can’t go. Every minute, miners receive a reward of 10,000 DOGE for solving a new block. This amounts to 5 billion new Doge coins being minted each year.

Recommended: Will Dogecoin Ever Be Capped?

By the end of the year 2030, there will likely be about 180 billion DOGE circulating. For the price of DOGE to reach $1 by that time, the market cap of Dogecoin would have to be $180 billion.

The current market cap of DOGE at the time of writing is about $37 billion. There are currently 130.8 billion DOGE in circulation. To reach a valuation of $1 per coin, the market cap of DOGE would have to more than triple, rising by more than $80 billion.

To get to $1, then, there would have to be a lot of money flowing into DOGE. While some believe this might be possible, many others don’t foresee a $1 valuation in DOGE’s future.

Can Dogecoin Reach $10?

For the DOGE price to continue climbing, there has to be much more money flowing into DOGE than new coins being mined. Because DOGE has no supply limit, and the block reward is so large (10,000 coins per block, compared to 6.25 coins per block for BTC), it becomes exponentially harder for Dogecoin to achieve a higher price over time.

The 2021 bull market in Dogecoin saw its price rise from $0.0002 to $0.70 in a matter of months was a unique event. While the exact conditions that lead to any market event can be hard to pin down, there are a few unusual circumstances that combined at the same time, likely giving DOGE a huge boost.

• It was in the middle of a Bitcoin bull market, when BTC and other cryptocurrencies were also hitting new all-time highs.

• The coronavirus pandemic of 2020 had been going on for less than a year, and many people around the world were still staying home. Some of them were investing for the first time.

• Dogecoin saw several notable celebrity endorsements in quick succession with one another.

Owing to the impact of these headlines, some have accused DOGE of functioning like a giant pump-and-dump scheme because of its quick rise and fall.

That said, it’s possible for DOGE to reach $10, at least briefly, at some point in the next decade.

Can Dogecoin Reach $100

It would be nearly impossible for Dogecoin to reach $100, because there isn’t quite enough money in the whole world.

Every $1 that the Dogecoin price were to increase would require an additional $180 billion in 2030. To reach $100 by 2030, then, there would have to be $18 trillion invested in Dogecoin.

Global GDP is estimated to be about $87 trillion. The GDP of China is around $15 trillion, while the GDP of the U.S. is about $21 trillion.

In other words, a $100 DOGE price would require a market capitalization of more than the annual gross-domestic product of the entire nation of China by the year 2030. It doesn’t take a market genius to determine that this simply isn’t going to happen.

Even if that much money wanted to find a home in DOGE, it’s unclear whether or not crypto exchanges would be able to handle that kind of volume.

There’s one more factor to consider. The total holdings of all the DOGE that has been mined, as of 2021, are centralized into the hands of just a few crypto wallets.

One wallet holds more than 25% of all the DOGE in existence, while the top 20 wallets hold over 50% of all DOGE.

How high could Dogecoin go? The answer is: Probably not that high. If for no other reason, the people who control a few wallets with billions of coins in them are likely to take some profits whenever the price of DOGE sees a sharp rise, capping any gains.

Can Dogecoin Reach $1000

If the answer to the question “can Dogecoin reach $100” is no, then there’s no way that Dogecoin could ever reach $1,000.

It would take so much money for this to become reality that there’s really no scenario where it could happen.

Much of this stems from the fact that DOGE is a meme coin with little technical development. Traders typically use it as a vehicle for transferring value or seeking speculative gains, rather than HODLing it.

This represents a stark contrast to Bitcoin, which has become more of a mainstream store of value and investable asset class due to its active development community, high level of network security, and its fixed supply limit of 21 million bitcoins. The supply of newly mined bitcoins also gets cut in half every 4 years, whereas no such “halving” event ever occurs for Dogecoin.

Bitcoin’s market cap eclipsed at the time of this writing is above the $1 trillion mark. Because the supply of BTC is always declining, the market cap and price can continue rising, absent some unforeseen catastrophe.

The same cannot be said for other types of cryptocurrency like Ethereum and Dogecoin that have no supply cap.

The Takeaway

Much of the answer to the question “Can Dogecoin reach $100?” has to do with simple supply-and-demand dynamics. Because of the way DOGE mining works, it’s nearly impossible for one DOGE to reach a valuation of $100. That said, $1 per DOGE could happen, and $10 is a longshot but not completely outside the realm of possibility.

Photo credit: iStock/Alexander Buerkle

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First Trade Amount		Bonus Payout
Low	High	Bonus Payout
$50	$99.99	$10
$100	$499.99	$15
$500	$4,999.99	$50
$5,000+		$100

Oct

2021

Bitcoin Fees: How to Save on Bitcoin Transaction Fees

Bitcoin Fees: How They Work and 3 Ways to Save on Them

By Matthew Zeitlin | Growing Wealth, invest, Investing | Comments Off

Bitcoin is a decentralized digital currency based on blockchain technology with an overall value approaching $1 trillion. Currency can be exchanged without an intermediary like a bank or payment processor and there’s no central government or central bank in charge of creating new currency or affecting its value.

But that doesn’t make Bitcoin transactions free.

Recommened: How to Invest in Bitcoin

What are Bitcoin Fees?

There are two types of Bitcoin fees and costs. Most exchanges and brokerages will charge a fee for trading Bitcoin (as they would charge a fee on any other trade), and on top of that there are also Bitcoin transaction fees.

How Do Bitcoin Transaction Fees Work?

When a Bitcoin transaction occurs, the network usually keeps a small percentage of the transacted amount.

Traditional bank or money transmitters might charge a fee on a transaction to help pay for the cost of maintaining the network, increase profit margin for the company, to protect against legal or reputational risk by working with the customers that are transferring money, or to cover the risk of having to reverse the transfer or have it not be accepted.

For Bitcoin, much of this does not apply — there’s no company that controls the network and the transfers are final and irreversible. So why are there Bitcoin transaction fees? The Bitcoin fees exist because the Bitcoin network is maintained by its users and because Bitcoin mining needs to be incentivized by the system itself.

Bitcoin miners, which are essentially networks of computers which power the network through “proof of work” (i.e. solving hard math problems), maintain the network and power through the transactions. The more computing power coursing through the network, mining new blocks of Bitcoin, authorizing, and authenticating transactions, the higher the Bitcoin hash rate. That’s a good thing, and to fund this, incentives are required.

Bitcoin miners are incentivized in two ways: they earn new Bitcoin through mining, and they earn transaction fees.

Why Do Transaction Fees Go Up and Down?

Transaction fees depend on several factors, but the most important one is the overall use of the Bitcoin blockchain. Basically, it’s a matter of supply and demand.

When there is a relatively large amount of computer power dedicated to mining a relatively small amount of Bitcoin transactions, fees go down.

When there are lots of transactions being initiated simultaneously, fees can go up, as the network can only process so many at any given time. Miners will work harder to authenticate and process transactions with higher fees.

3 Strategies to Save on Bitcoin Transaction Fees

There are ways to save on Bitcoin transaction fees. While you may not avoid them outright, these strategies may help you incur smaller fees.

1. Know What You’re Paying — or Will Pay

The first step to avoiding high Bitcoin transaction fees is to know exactly what they are. Websites like BitInfoCharts are dedicated to tracking Bitcoin transaction or transfer fees, and these fees are also a frequent topic of conversation and news coverage in the cryptocurrency-focused media. So it’s possible to keep track of fees and wait to do a transaction when the fees are lower.

2. Use a Wallet With a Set Fee

Bitcoin transactions happen through a crypto wallet — the software or hardware that allows you to store, send, and receive Bitcoin. Many popular, mainstream exchanges also have wallets and will calculate and pass on Bitcoin transaction fees.

There are a variety of wallets that allow you to set your own fee — though that can mean that a transaction you wish to make may not be prioritized or go through immediately. This may not be important to you if you’re doing a small number of transactions or just one transaction, but the option may be valuable if you’re looking to save on Bitcoin transaction fees.

3. Use the Lightning Network

Bitcoin transactions are slower and more expensive than many transactions that happen with fiat currency like U.S. dollars. To fix this, a group of developers created the Lightning Network, a protocol that sits on top of the blockchain and allows users to transfer Bitcoin much faster and with far lower fees than normal, “on-chain” transactions.

Using Lighting Network for transactions has not yet reached mass adoption in the Bitcoin community, largely because it’s more complicated and requires more technological know-how than typical transactions. However, for anyone with that know-how who’s doing frequent Bitcoin transactions or transfers that are time-sensitive, it may be an option to reduce Bitcoin fees.

The Takeaway

The problem of Bitcoin transaction fees is a long-lamented subject in the Bitcoin community. But the way the network is set up, these fees are a necessary evil. They incentivize miners to devote computer power to verify the transactions and keep the blockchain growing.

Photo credit: iStock/happyphoton

Oct

2021

DAOs and How They Work

By Matthew Zeitlin | Growing Wealth, invest, Investing | Comments Off

One of the strongest trends in technology has long been decentralization — from the creation of the internet connecting academics across the world, to the world wide web providing a platform for strangers to connect with one another. The advent of cryptocurrency has spurred another round of decentralization, the decentralized autonomous organization, or DAO.

What Is a DAO?

Decentralized autonomous organizations (DOAs) are innovative and potentially promising models for bringing blockchain technology to new areas of organization, beyond issuing and transferring value across the blockchain (aka currency). For example, DAOs could be used to develop blockchain in insurance or blockchain in real estate.

The goal of DAOs is to remove expensive and time-consuming processes and democratize how organizations are conceived and run, by doing everything in code. DAO stands for:

• Decentralized: This means no one person or group is in charge of the organization by virtue of a title. Instead, decisions are made by the members of an organization by virtue of how big a stake they have in it.

• Autonomous: The DAO is run entirely according to its smart contracts and the decisions of its members.

• Organization: DAOs can still act as a single entity, producing things and acting on behalf of all its members.

While DAO typically refers to projects using Ethereum (aka Ethereum DAOs), some scholars have suggested that Bitcoin itself is a DAO.

It’s important when discussing Ethereum DAOs or DAOs in general not to get them confused with “The DAO,” a group that raised money to invest in cryptocurrency projects. The organization was hacked and more than $50 million of about $160 million worth of Ethereum raised was stolen.

How Do DAOs Work?

While there have been procedures for more open and democratic organizations for as long as people have been gathering to make decisions, DAOs are an innovation that specifically hinges on blockchain technology.

DAOs are typically built on top of the Ethereum blockchain, which supports the second-most popular and valuable cryptocurrency in the world and is designed specifically to support “smart contracts” or agreements that execute automatically and don’t require third parties to enforce.

Imagine a traditional organization as a bundle of contracts and agreements between the members: an employment agreement specifies what an employee is supposed to do in exchange for pay, contracts with suppliers, loan terms with banks, and so on. These contracts all need to be specified on paper and their execution can be up to third parties and legal systems to oversee. For the DAOs, these are problems to be solved with code.

How Are DAOs Funded?

Typically DAO contracts are also set up for the sale of a token, as a way of raising money for the DAO and for establishing who gets to be involved in the decision-making. Token holders vote based on a process specified and executed in the smart contracts themselves. The idea is that token holders will want to maximize the value of their tokens, thus ensuring the DAO does not work to the advantage of any one employee or group, but instead to the token holders as a whole.

DAOs: Pros and Cons

Pros	Cons
Change always happens by vote	Can be hard to turn around in a crisis
Transparency through open-source	Organizational discretion is difficult
Smart contracts avoid after-the-fact tinkering with agreements	If contracts and code are poorly written, can be hard to change without consensus
Organizational roles specified in code	Makes taking on responsibilities beyond what’s specified in code difficult
Decentralization means everyone in the organization is responsible for the organization’s decisions	Lack of accountability for any one individual, like a central leader or chief executive
Open source means more eyes on critical functions and the best ideas rise to the top	Legal ambiguity could make decision-making difficult or force DAOs to engage in more centralized, traditional behavior
Everyone involved in decision-making has a stake	Token-based decision-making can make consideration of other stakeholders’ interests more difficult

Examples of DAOs

There are a variety of DAOs in operation right now. These are some of the well known ones.

MakerDAO

MakerDAO is one of the most prominent uses of the DAO structure and one of the most popular DeFi (or decentralized finance) projects that could serve as an example of how to use blockchain in the finance industry. MakerDAO produces a token, known as Dai, that has a steady $1 U.S. value and is used for financial products like loans. There’s also the MKR token, which is for governance of the overall project. This means that holders of MKR can “vote on changes to the protocol, like the addition of new collateral assets and protocol updates.”

Augur

Augur is an Ethereum-based prediction market, meaning it allows people to place bets on events in the future. The platform is a bundle of smart contracts and OracleDAO was created to assist with its development.

Uniswap

Uniswap is a decentralized cryptocurrency exchange specifically for “ERC-20” tokens with a governance token called UNI. ERC-20 is a standard on the Ethereum blockchain that is used for applications and services built on top of Ethereum. In the ongoing dispute between centralized vs decentralized exchanges, Uniswap is decidedly on the side of the latter.

💡 Recommended: What Is a Governance Token?

How to Invest in a DAO

Investing in a DAO isn’t that different from buying any other form of cryptocurrency. Here are the simple steps to do it.

1. Have a wallet. A crypto wallet is a software program or hardware and software system that allows an investor to safely and effectively store and trade cryptocurrencies including tokens issued by DAOs.

2. Do your research. There are new crypto projects starting every day. It’s important to have a detailed understanding of what the developers of the one you’re interested in are attempting to do, and that you are well aware of whatever rights you gain by investing in a DAO and purchasing a governance token.

3. Find an exchange. Some exchanges host tokens, including MKR, which can be bought and sold using their tools. Uniswap, for example, hosts token exchange.

4. Be an active participant. Study how governance works in the DAO you’ve invested in and be a conscientious and energetic participant.

The Takeaway

DAO stands for decentralized autonomous organization. In such organizations, there is no one person or small group of executives making decisions — instead, anyone holding tokens issued by that DAO has a say in policy and other organizational matters.

Photo credit: iStock/Pekic

What Is a Dogecoin Faucet? Where Can I Access One?

What is a Dogecoin Faucet?

Why Were Dogecoin Faucets Created?

How to Use a Dogecoin Faucet

Are There Any Risks With a Dogecoin Faucet?

Can I Mine Dogecoin?

The Takeaway

11 Factors that Make the Price of Bitcoin Go Up

1. Supply and Demand

2. Bitcoin Halving

3. Monetary Policy

4. Regulatory Factors

5. Memes and Social Media

6. Mainstream Media

7. Miners

8. Hash Rate

9. Network Adoption

10. Risk Appetite

11. Technical Analysis

The Takeaway

Can Dogecoin Reach $100? Or Even $1? $10? $1,000?

Will Dogecoin Reach $1?

Can Dogecoin Reach $10?

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Can Dogecoin Reach $100

Can Dogecoin Reach $1000

The Takeaway

Bitcoin Fees: How They Work and 3 Ways to Save on Them

What are Bitcoin Fees?

How Do Bitcoin Transaction Fees Work?

Why Do Transaction Fees Go Up and Down?

3 Strategies to Save on Bitcoin Transaction Fees

1. Know What You’re Paying — or Will Pay

2. Use a Wallet With a Set Fee

3. Use the Lightning Network

The Takeaway

DAOs and How They Work

What Is a DAO?

How Do DAOs Work?

How Are DAOs Funded?

DAOs: Pros and Cons

Examples of DAOs

MakerDAO

Augur

Uniswap

How to Invest in a DAO

The Takeaway

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