Dogecoin may have started as a joke cryptocurrency, but it’s evolved into a very real digital asset. Like all cryptocurrencies, there are multiple ways that traders or investors can purchase DOGE.
There are two basic ways to buy DOGE: Through a cryptocurrency exchange, or through an online stock trading platform or application.
How to Buy Dogecoin in 4 Steps
Buying Dogecoin is a fairly simple process — it’s more or less the same process you would follow if you were trying to purchase Bitcoin or any other altcoins.
While this may seem complicated for crypto beginners, it’s a fairly straightforward process, whether you’re buying crypto to keep for the long-term or to spend right now.
Here’s a detailed walkthrough of each step:
1. Choose Where You Want to Buy Dogecoin
If you understand the basics of Dogecoin and are interested in buying DOGE, you’ll need to decide whether you’d like to use either a cryptocurrency exchange or an online trading platform. No matter which route you go, you’ll need to establish an account with the platform or exchange (if you don’t have one). That may require banking information (account numbers, etc.), addresses, phone numbers, email addresses, and in some cases, your Social Security number.
Crypto exchanges are platforms that allow interested parties to buy, sell, or trade different cryptocurrencies. They’re not all the same — some cryptos are available on some platforms, but not on others, for instance — and they tend to work like stock markets.
That is, traders and investors are exchanging cryptos, much like they would with stocks or bonds on the stock market. There are different types of exchanges, too, including centralized, decentralized, and hybrid exchanges.
A quick Google search will reveal plenty of them, if you’re interested in going this route.
Exchanges tend to have a large variety of crypto choices, are generally simple to use, and make it pretty easy to trade. However, some of them may have high fees for trading, and may not grant users complete control over their storage options. While nearly all exchanges will let you buy or sell crypto, some may support more advanced orders such as limit orders or margin trading.
Online Stock Trading Platforms
Aside from crypto exchanges, which can be used to buy Dogecoin, there are also stock trading apps — of which there are also many choices. And, again, a simple Google search will yield plenty of results, if you want to find a few options to start trading.
These trading apps generally work similarly to exchanges for end users. Essentially, it’s a matter of opening and funding an account, and executing the trade. But the apps and platforms in question are generally known for trading stocks, bonds, and ETFs rather than cryptocurrencies, as opposed to crypto exchanges.
They act as brokerages, in other words, and may charge a markup or fee for executing a trade.
That said, many of these apps have opened themselves up to crypto trading as demand has grown. And, for the most part, trading crypto on these platforms is a similar (if not the same) process as trading stocks.
As for the pros and cons of using these apps, it’ll depend on the specific platform. Some may require minimum deposits to open an account, for example. Others will charge fees of varying degrees (or none at all), and some will be less user-friendly than others. On some brokerage platforms, you can’t withdraw your crypto directly from the account, instead, you’d need to sell your assets to be able to withdraw the balance to other accounts.
It’ll take a little research and experimentation to find one that you like, if you choose to use one of these apps to buy Dogecoin or other cryptos.
2. Setup a Payment Method
Once you’ve decided where you want to buy Dogecoin, it’s time to get down to brass tacks: Laying the lines to execute a transaction. That means setting up a method to pay for your new Dogecoin holdings.
Depending on whether you choose an exchange or a trading app, the specifics of this step will vary. But in general terms, it’s connecting a way to make a payment to the exchange or brokerage — usually by connecting a credit or debit card, or a bank account — to your account, so that you can make purchases or trades.
3. Purchase Dogecoin
At this point, it’s simply a matter of executing the transaction to buy Dogecoin. This process will vary depending on the exchange or app you’re using. But it’s usually as simple as inputting the amount of Dogecoin you want to buy, and hitting the “purchase” button to initiate the purchase.
4. Safely Store Your Dogecoin
Securely storing your cryptocurrencies isn’t quite as simple as holding a stock or ETF. Both exchanges and crypto wallets have become targets for hackers, so it’s important to make security a priority after you’ve purchased crypto.
Depending on whether you’ve used an exchange or an online trading platform to buy Dogecoin, your storage options vary. Crypto storage is a deep topic all on its own, but what you need to know is that specific exchanges and platforms may store your coins differently.
Platforms may store your Dogecoin in either “hot” or “cold” wallets. The essential difference is that “cold” storage is offline — making it more difficult for hackers, or other bad actors, to access. Conversely, coins held in “hot” storage remain online, and can be accessed quickly to facilitate trades.
Some platforms use a combination of hot and cold storage. Again, it depends on the specific platform you choose.
You can also transfer your Dogecoin to your own digital wallet, of which there are many to choose from with varying degrees of security and features. You can also choose from DOGE-specific wallets or those that allow you to store multiple types of cryptocurrency.
The process of purchasing DOGE is similar to that of buying other cryptocurrencies. Once you’ve decided whether you want to go through a crypto exchange or a brokerage platform, you simply need to create an account and execute the purchase. Keep in mind that like all cryptocurrencies, DOGE is a risky investment with extreme price volatility.
If you’re planning to go the brokerage route, a great way to get started is by opening a brokerage account on the SoFi Invest stock app. You can use it to purchase not only Dogecoin and other cryptocurrencies, but also stocks and exchange-traded funds. (DOGE is currently not available in New York.)
Photo credit: iStock/StockRocket
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