What is Dogecoin (DOGE)?

Dogecoin (see DOGE price data), the cryptocurrency that started as a joke between two software engineers in 2013, has transcended its humorous origins to become a cultural and financial phenomenon within the crypto ecosystem.

Inspired by the iconic Shiba Inu meme, this unique meme coin has captivated millions of users and achieved a staggering market capitalization.

In this guide, we will delve into the origins and evolution of the Dogecoin meme coin, exploring its unique value proposition and key features that set it apart from other cryptocurrencies. Additionally, we will analyze its technical workings, based on blockchain technology, as well as aspects related to its native token DOGE and its inflationary and unlimited token issuance model.

What Is Dogecoin?

Dogecoin is a peer-to-peer cryptocurrency inspired by the famous doge internet meme that features the image of a Shiba Inu dog. This meme coin was created in 2013 by software engineers Billy Markus and Jackson Palmer as a joke to mock speculation in the cryptocurrency world. However, quickly and unexpectedly, even for its creators, it became a serious proposition and attracted a large community of enthusiasts.

A key characteristic of Dogecoin is its focus on being a fun, friendly, and accessible currency for the general public. Unlike other cryptocurrencies that can seem intimidating or overly technical, Dogecoin presents itself as a welcoming and reliable option, with a casual tone and an attractive brand image.

Dogecoin’s unique features include its speed and low transaction costs, its unlimited supply, and its vibrant online community known as the Doge Army. This community has been notable for rallying around good causes and philanthropic acts, such as raising funds to send the Jamaican bobsleigh team to the 2014 Winter Olympics or improving access to clean water in Kenya.

What Is with the Dog on the Coin?

Doge is a fun, friendly mascot! The Shiba Inu dog is a Japanese breed of dog that was popularized as an online meme and represents Dogecoin.

The use of the misspelt word ‘doge’ to refer to a dog dates back to June 24, 2005, when it was mentioned in an episode of Homestar Runner’s puppet show. In the episode titled ‘Biz Cas Fri 1’, Homestar calls Strong Bad his ‘d-o-g-e’ while trying to distract him from his work.

On February 23, 2010, Japanese kindergarten teacher Atsuko Sato posted several photos of her rescue-adopted Shiba Inu dog Kabosu to her personal blog. Among the photos was a peculiar shot of Kabosu sitting on a couch while glaring sideways at the camera with raised eyebrows.

                                             

Dogecoin: Milestones

Dogecoin meme coin has come a long way from its humble beginnings as a joke between two software engineers to become one of the highest market cap cryptocurrencies. Here are some of the main milestones in its history and development:

December 2013: Dogecoin was founded by Jackson Palmer and Billy Markus. Palmer, a marketing employee at Adobe in Sydney, Australia, had the original idea to create a cryptocurrency based on the popular Shiba Inu dog meme. He bought the domain Dogecoin.com and designed the logo based on an iconic internet meme. Markus, a well-known programmer at the time, joined the project and developed the Dogecoin protocol based on Litecoin. Notably, Markus is also known as the creator of DogeTipBot, a micro-tipping service that allows users to tip for online services and redeem them for other cryptocurrencies. In 2014, the service opened the door to broader adoption of DOGE.

January 2014: The trading volume of DOGE briefly surpassed that of all other cryptocurrencies, reaching a price of $0.0020 after experiencing a 1,000% increase. This happened at a time when Bitcoin (see BTC price data) was affected by the investment ban imposed by China. That year was crucial for the project, as it developed its online community. However, its use was primarily limited to speculative trading, as it had few practical use cases and didn’t even have a white paper at the time.

March 2014: In just two weeks, the Dogecoin community raised $55,000 in DOGE to sponsor NASCAR driver Josh Wise, an experienced driver with limited resources, naming his car the ‘Moonrocket’ and adorning it with many DOGE images. This idea started on the subreddit r/dogecoin, where users proposed raising funds to sponsor a NASCAR driver. The driver finished in 22nd place, winning the ‘Spirit of the Fan’ award for his inspiring story.

June 2014: Key figures like Billy Markus and Jackson Palmer led the creation of the Dogecoin Foundation. This initiative aimed to elevate the cryptocurrency beyond its meme coin status, leveraging its potential to become a valuable tool.

April 2015: Jackson Palmer decided to step away from the project due to growing concerns about the prevailing ‘get rich quick’ mentality in the community at the expense of the core values of the cryptocurrency.

January 2018: Dogecoin experienced a meteoric rise in value, briefly reaching a market capitalization of over $2 billion.

July 2020: A viral challenge on TikTok caused a 638% increase in Dogecoin’s trading volume, alongside a 71% increase in DOGE’s price.

January 2021: Dogecoin reached a market capitalization of over $9 billion in a price surge driven by the popular subreddit WallStreetBets and encouraged by Elon Musk on X (formerly Twitter).

The rise of Dogecoin in WallStreetBets in 2021 was crucial in its growing popularity on social media, gaining cult status among crypto enthusiasts, which has been fundamental to its success.

How Does Dogecoin Work?

Dogecoin is based on blockchain technology and uses a proof-of-work algorithm similar to Bitcoin. However, unlike Bitcoin, Dogecoin is indirectly based on the code of the cryptocurrency Litecoin (LTC) and uses the Scrypt hashing algorithm in its proof-of-work.

The use of the Scrypt algorithm means that miners cannot use Bitcoin mining equipment based on SHA-256; instead, they must use field-programmable gate arrays and application-specific integrated circuits, which are considered more complex to produce.

Like Bitcoin, Dogecoin relies on a decentralized and distributed blockchain, where transactions are verified and recorded transparently and securely. However, unlike Bitcoin, Dogecoin has a target block time of 1 minute, compared to Bitcoin’s 10 minutes, allowing for faster transaction speeds.

It is worth noting that DOGE mining is much easier than Bitcoin mining, given the enormous competition for the latter. However, due to the significant difference in their prices, the reward is also much lower for Dogecoin.

DOGE Token

Dogecoin (DOGE) is a cryptocurrency created to facilitate fast and low-cost digital transfers between users, acting as a decentralized medium of exchange. Unlike other cryptocurrencies like Bitcoin, Dogecoin may not be the best currency to be used as a store of value or long-term investment due to its economic model and token issuance rules.

While Bitcoin has a fixed maximum supply of 21 million coins, Dogecoin has an almost unlimited supply of tokens that inflates constantly through DOGE mining. This means that as more DOGE is generated and distributed, the market value of existing holdings tends to be gradually diluted due to the increase in circulating supply.

While this avoids extreme fluctuations that could hinder its use as a medium of exchange, it also significantly reduces Dogecoin’s potential as a store of value or investment vehicle for substantial returns over time.

Instead, the Dogecoin network is optimized to facilitate fast, low-cost, low-fee transfers between users, making it a popular choice for online micropayments and tipping within its community.

Buying DOGE

The process of buying Dogecoin is relatively simple. On most platforms, it can be acquired using a bank account or credit/debit card. The minimum purchase amount varies by platform but is usually around $20.

Some of the most popular options for buying DOGE tokens on centralized exchanges are:

• Binance. One of the largest and most liquid cryptocurrency exchanges, Binance offers the DOGE/USDT trading pair to buy Dogecoin with tether (a stablecoin backed by US dollars).
• Coinbase. Dogecoin (DOGE) is listed for trading on Coinbase, one of the leading cryptocurrency exchanges. Coinbase users can buy, sell, and store Dogecoin in their Coinbase accounts.
• Upbit. This South Korean cryptocurrency exchange is one of the largest Dogecoin trading platforms in Asia.
• OKX. Based in Seychelles, OKX is another major exchange that includes the DOGE/USDT trading pair.

Decentralized exchanges include the following:

• Uniswap. A leading DEX in the Ethereum ecosystem that allows for swapping DOGE token with other cryptocurrencies. It offers users greater control and does not require registration.
• SushiSwap. Another popular DEX, similar to Uniswap, also allows for the exchange of Dogecoin.
• PancakeSwap. A decentralized exchange based on the Binance Smart Chain (BSC) that includes Dogecoin in its list of cryptocurrencies.

Other options include:

• eToro. This multi-asset investment platform allows users to buy and sell Dogecoin, offering margin trading options and trading signals.
• Robinhood. The popular investment app Robinhood, known for its role in the GameStop surge, also allows users to buy and sell Dogecoin.

Conclusion

In summary, Dogecoin is much more than a meme coin. What started as a joke between two friends has turned into a cultural and financial phenomenon, capturing the hearts of millions of users with its casual and accessible approach.

However, don’t be fooled by its playful appearance. Beneath its charming and humorous exterior beats a strong technological heart with a blockchain that continues to develop alongside a vast community of devoted followers known as the Doge Army.

If you are looking for a fun and carefree coin that can occasionally skyrocket due to a celebrity mention, Dogecoin might be your best option. After all, it is the favourite meme coin of none other than Elon Musk, the CEO and founder of Tesla Inc (NYSE: TSLA). With Elon Musk as a promoter, any stellar rise is possible for Dogecoin!