Dogecoin

Dogecoin, represented as DOGE in the digital currency market, has taken the world by storm. Initially introduced as a joke in December 2013, Dogecoin has since evolved into a formidable entity in the crypto world. This article offers a comprehensive overview of Dogecoin, shedding light on its origin, development, market performance, and potential future.

Unlike Bitcoin, which has a supply limit of 21 million coins, Dogecoin has no maximum supply limit. By 2021, over 29 billion coins were in circulation for the Dogecoin cryptocurrency. New blocks are created in the Dogecoin blockchain every minute, making transactions faster than with other cryptocurrencies.

Dogecoin’s value remained relatively low for several years after its inception. However, in 2021 it experienced a significant surge. This was largely attributed to high-profile celebrity endorsements such as Tesla and SpaceX CEO Elon Musk, rapper Snoop Dogg, and Kiss bassist Gene Simmons. The “Reddit Rally” also played a crucial role in Dogecoin’s skyrocketing value. In late January 2021, a Reddit group known as SatoshiStreetBets promoted Dogecoin, causing its price to rise exponentially. At its peak in May 2021, Dogecoin’s market capitalization reached over $88 billion, making it one of the largest cryptocurrencies in the world by market cap. While it has since receded from its peak, it remains a significant player in the crypto market.

Origins and Development

Dogecoin was first launched by software engineers Billy Markus and Jackson Palmer. The intention was to create a fun, less serious cryptocurrency that could reach a broader demographic than Bitcoin. The name and logo were derived from the “Doge” meme, which features a Shiba Inu dog surrounded by text in Comic Sans font reflecting the internal monologue of the dog, written in broken English. (Note: There is also another cryptocurrency named Shiba Inu. Dogecoin and Shiba Inu Coin are not the same.)

Short facts about the Dogecoin

Launched: December 6, 2013

Abbreviation: DOGE

Sign: Ð

Algorithm: Dogecoin is based on Scrypt algorithm.

Using Dogecoin

Initially launched as a bit of a joke, Dogecoin fairly quickly got a large user base, and also became a popular cryptocoin for investments and speculative trading.

The number of vendors who accept Dogecoin as payment for goods and services is still fairly limited in comparison to Bitcoin.

Speculative trading

Dogecoin is traded against both fiat currencies and cryptocurrencies on several major cryptocurrency exchanges.

Online tipping

Dogecoin is one of several cryptocoins commonly used for social media tipping, where users tip those who provide content.

MyDogeWallet is a self-custodial Dogecoin wallet. With it, it is very easy to tip on the X platform (formerly Twitter).

There also used to be a service called the Dogetipbot – a cryptocurrency transaction service used on Reddit, Twitch, and several other sites. Dogetipbot made it easy for users to tip content providers, e.g. Reddit comments that they wanted to show support for. The Dogetipbot is no longer in use, as it was discontinued and taken offline in 2017 as a result of the creator filing for bankruptcy. Many users lost coins that were stored in the Dogetipbot system at the time.

How it works

Billy Markus designed the protocol for Dogecoin based on Litecoin, Luckycoin and similar cryptocurrencies that used scrypt technology in their proof-of-work algorithm. Scrypt makes it impossible for cryptocurrency miners to use SHA-256 bitcoin mining equipment, forcing them to use dedicated field-programmable gate array and application-specific integrated circuit devices instead – a more complicated and costly endevour.

Reward

When first launched, Dogecoin would give out a randomized reward for each mining block. In March 2014, this system was replaced with the more commonplace static block reward.

Market Performance

The Ren Project

Dogecoin can not interact with smart contracts directly, since it operates on its own blockchain. It is however possible to “wrap” the dogcoins and lock them into a state that works with a smart contract until the coins are “unwrapped”.

A popular solution in recent years is the renDOGE. The Ren Project is behind the renDOGE and makes it possible to use dogecoins on the Ethereum blockchain, which is turn means better access to DeFi (decentralized financial services) as most DeFi coins use the Ethereum blockchain.

History of Dogecoin

Background

Originally, the software engineers Jackson Palmer and Billy Markus concieved the Dogecoin as a way of poking fun at the cryptocurrency craze.

Dogecoin derives its name from the well-known “doge” meme and the meme´s picture of a Shiba Inu is used in the coin´s logo. This is thanks to Jackson Palmer, who bought the domain Dogecoin.com and added a splash screen featuring this logo and scattered Comic Sans text, in the style of the meme. After seeing the site, Billy Markus reached out to Palmer, and they began working together to build the currency.

On Reddit, they published their grand plans for Dogecoin to take over the world. Many Redditors took the humorous altcoin to heart, and within two weeks, the coin had its own dedicated and very active forum on Reddit.

Launch

Dogcoin was launched on December 6, 2013.

First major theft, and the community response to it

The first major theft of Dogecoin occurred on Christmas Day 2013. The online cryptocurrency wallet platform Dogewallet was hacked and millions of coins taken, as the hacker (or hackers) gained access to the platform’s filesystem and modified the send/recieve page.

Even though the event was a negative one, it also garnered publicity for Dogecoin, and for a while, it was the most frequently mentioned cryptocurrency on Twitter.

To help the victims of the Christmas Day theft, the Dogecoin community launched the “Save Dogemas” initiative. Donations began to pour in, and roughly one month later, enough money had been donated to cover all the stolen Dogecoins.

Dogecoin Foundation

The Dogecoin Foundation was formed in 2014.

On August 14, 2021, the Dogecoin Foundation announced the re-establishment of the foundation, proclaiming a renewed focus on supporting the Dogecoin Ecosystem, the Dogecoin Community, and the future of the Dogecoin Blockchain. Notable new advisors were added to the Board of the foundation, including Ethereum inventor and co-founder Vitalik Buterin, and Neuralink CEO Jared Birchall.

Palmer leaves

Jackson Palmer left the cryptocurrency community in 2015. According to him, even though it was originally conceived as a libertarian alternative to traditional money, the world of cryptocurrencies was now fundamentally exploitative and served to enrich its top proponents.

Market price fluctuations

• After it´s launch in December 2013, Dogecoin quickly reached a market capitalization of several million dollars, and in January 2014, the trading volume of Dogecoin briefly exceeded that of all the other cryptocurrencies combined. (It still had a much smaller market capitalization than coins such as Bitcoin, due to its low value.)
• In 2017 and early 2018, heavy speculation fueled a cryptocurrency boom which boosted the market valuation of many cryptocoins, including the Dogecoin. On January 7, 2018, Dogecoin peaked at 0.017 USD, which meant a total market capitalization of almost 2 billion USD for Dogecoin.
• In 2020, a TikTok trend appeared, where the aim was to get the market value of Dogecoin up to 1 USD.
• In January 2021, DOGE increased in value by over 800%, reaching 0.07 USD. The boost was largely fueled by forum activity on Reddit, and partly linked to the GameStop short squeeze and comments made by Elon Musk. The following month, DOGE reached 0.08 USD following Twitter activity by Musk, Snoop Dogg, and Gene Simmons.
• On May 5, 2021, Dogecoin reached a new significant peak, with its total market capitalization exceeding 85 million USD. A few days later, SpaceX announced a rideshare mission to the Moon completely funded by Dogecoin. According to Elon Musk, DOGE-1, a CubeSat, would be a minor 40 kg rideshare payload on Intuitive Machines´ IM-1 mission in 2022.
• In March 2021, Mark Cuban announced that it would be possible to purchase tickets and products for his NBA team – the Dallas Mavericks – using DOGE. Within two days of the announcement, 20,000 such transactions had been carried out.
• In 2021, DOGE reached 0.10 USD on April 14, and 0.45 USD on April 16. The total market cap of Dogecoin was now getting close to 50 billion USD, making it one of the top-5 largest cryptocurrencies by market cap. DOGE kept moving up, and reached the symbolically important 0.50 USD mark on May 4.
• On December 19, 2023, DOGE suddenly began to rise sharply in market value, and within 72 hours, it had experienced an increase by nearly 300%. At the time, Bitcoin and several other notable cryptocurrencies were dealing with the effects of new, stricter restrictions for Chinese banks regarding cryptocurrency investments. After the sudden spike in value for Dogecoin, it rapidly fell by 80%, partly because large minin pools had got their eyes on the coin and noticed how little computer power was required to mine Dogecoin (at the time).

The Future of Dogecoin

Despite its origins as a joke, Dogecoin has carved out a unique niche within the vast and complex world of cryptocurrencies. It serves as a reminder that in the digital age, community support and viral internet trends can drive significant economic impact. While its future remains uncertain, the story of Dogecoin is undoubtedly a fascinating chapter in the ongoing evolution of digital currencies. With its satirical and humorous origin in mind, the Dogecoin is still considered a fun and friendly cryptocurrency, setting it apart from more “serious” altcoins in the cryptosphere.

The future of Dogecoin, like most cryptocurrencies, is highly unpredictable. While it has shown potential, its reliance on speculative trading and celebrity endorsement raises concerns about its stability. However, it has a strong online community that continues to push for its wider adoption. Some online platforms and retailers have started accepting Dogecoin as a form of payment, which is a positive sign for its future utility.

Moreover, Elon Musk’s interest in making Dogecoin a ‘real’ currency and his announcement to work with Dogecoin developers to improve system transaction efficiency indicates potential future growth.