Dogecoin (DOGE) is a blockchain-based peer-to-peer cryptocurrency which was created in December 2013, as a tongue-in-cheek riposte to Bitcoin, and the crypto world generally. Its branding featured a likeness of a Shiba Inu dog from a ‘Doge’ meme that was popular at the time. By January 2014, it had quickly and unexpectedly generated a large community following and had reached a market capitalization of $60 million.
The idea for Dogecoin was conceived by Jackson Palmer, a marketer at Adobe Systems in Sydney, who tweeted a joke concept combining two of the internet's most talked-about topics: cryptocurrency and Doge. Billy Markus, a Portland, Oregon-based gaming geek and IBM software developer, made the concept a reality. According to Markus, it took him about three hours to create Dogecoin.
Markus based Dogecoin on an existing cryptocurrency, Luckycoin, which features a randomized reward that is received for mining a block, although this was later changed to a static block reward in March 2014. In turn, Luckycoin is based on Litecoin, which also uses scrypt technology in its proof-of-work algorithm. He simply changed a few core elements, including replacing the word ‘mine’ with ‘dig’ (because that’s what dogs do).
Markus went live with Dogecoin in his lunch break and within five minutes of launching no longer had enough computer power to dig the currency himself. Its coin supply of 100 billion was set to ensure that each DOGE would remain reasonably priced, and also because it was easier to dig them up. Markus split what he'd mined 50-50 with Palmer. They each earned $5,000 from the entire project.
As of 30 June 2015, the 100 billionth Dogecoin had been dug up, while Bitcoin's final coin will be mined in 2140. An additional 5.256 billion DOGE are created every year and the supply is said to be infinite.
One significant benefit of DOGE is that miners need only a minute to confirm a transaction, substantially less time than Bitcoin or Litecoin. Additionally, the Dogecoin system has no cap on the number of DOGE that users can dig up. As long as diggers continue operating, the DOGE supply will continue to expand.
Dogecoin’s low transaction fees quickly made it a conduit for traders looking to convert their Bitcoin into cash without having to pay Bitcoin’s steep transaction fees. At several points in the last few years it was one of the top three actively traded cryptocurrencies, and in 2018 had a market cap of $2 billion, despite not having a software update since 2015.
Dogecoin is known for its sustainable and friendly community, which offers assistance to members that are in trouble or have suffered hacks, and donates to interesting charitable causes. Some examples of charitable donations include earmarking $50,000 for the Jamaican bobsled team to go to the 2014 Sochi Winter Olympics, and a $30,000 contribution towards the construction of a well in the Tana River basin in Kenya.
Dogecoin is commonly used for tipping. Users tip other users for posts or contributions on platforms that they believe deserve recognition. The tipping process is available on some popular social platforms through third-party apps. It’s similar to a Facebook ‘like’ but with more impact.
Jackson, Dogecoin’s main spokesman, became disillusioned with the growing number of crypto scams and the emergence of institutional trading, which he believed was a step away from crypto’s original ethos. He left the company in 2015 without making a dime from his hobby project, handing over the development of Dogecoin over to trusted community members. Billy has led a less public life and goes by the pseudonym of Shibetoshi Nakamoto on Twitter.Read More