The Technology Behind Dogecoin

We told you what Dogecoin is, but we haven’t talked about the technology behind it. As with Dogecoin, all cryptocurrencies work with blockchain technology. Blockchains are huge digital databases (sometimes called ledgers) where transaction information is stored. All transactions made with Dogecoin are stored on the Dogecoin blockchain.

Blockchain information is not stored in one place, but on thousands of computers. These are called nodes. That’s why blockchains are decentralized networks. Blockchains do not act like central servers.

Let’s take an example of how a transaction takes place on the Dogecoin blockchain. I will give the international founders of Dogecoin as an example.

James lives in Australia. Jim is in America. Suppose James wants to send Jim money without using a bank or paying any fees. James decides to use Dogecoin.

  1. James sends 10 DOGE to Jim.
  2. Computers (nodes) on the Dogecoin blockchain first make sure that Jackson has 10 DOGEs to send. The transaction takes place after half of the nodes in the network agree that Jackson has 10 DOGEs to send. The transaction is added to the blockchain.
  3. Jim gets 10 DOGE.

Nodes receive rewards for controlling the transaction. The reward is a new Dogecoin. This is called mining.

Stay tuned to SinceCoin to learn more about Bitcoin and cryptocurrencies.

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