What is Dogecoin (DOGE)? [A Comprehensive Guide to Understanding the Meme Coin]

What is Dogecoin (DOGE)? [A Comprehensive Guide to Understanding the Meme Coin]

By Mr.CryptoWiki | cryptocurrency | 3 Oct 2019


Money and finance are generally taken very seriously and when it comes to cryptocurrency this is often the case as well. There are thousands of cryptocurrencies out there and while most of them are crap, many of them, especially those in the top 50, have serious goals and ambitions. Most of these leading cryptos have professional teams and communities that strive to deliver viable products and services. Their ultimate goal is to become widely adopted, provide something of value, or solve a hair-on-fire problem with their innovative cryptocurrency offering. 

However, not every successful cryptocurrency is as serious or innovative as many set out to be. For instance, there is one such crypto by the name of Dogecoin (DOGE) which has garnered a massive community and following simply because of its likeness of the Shiba Inu dog from the "Doge" internet meme and its use as its logo.

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In the following article, I provide a comprehensive and subjective look at Dogecoin (DOGE) so that you can fundamentally understand why this “joke currency” has value. I delve into the psychology behind it and what sets it apart from all other currency cryptos so that you can see its value proposition. So buckle up and enjoy this comprehensive guide to understanding the popular digital currency – Dogecoin (DOGE).

History

Dogecoin was introduced as a “joke currency” on December 6, 2013, and used the Shiba Inu dog as its logo. It was created during a time when Bitcoin climbed over $1000 for the first time and cryptocurrency was finally beginning to be taken seriously. Perhaps too seriously, or so two entrepreneurs by the names of Billy Markus and Jackson Palmer thought so. 

Billy Markus, a programmer from Portland, Oregon wanted to create a cryptocurrency that would be about fun and not just about money. He thought a crypto like this could reach a broader demographic than Bitcoin and be recognized in a different light, free from the controversy of other coins trying to be better than or like Bitcoin. 

At the same time, another entrepreneur, Jackson Palmer, who worked for Adobe Systems' marketing department in Sydney had the same idea as Markus – to create a fun cryptocurrency. Palmer purchased the domain dogecoin.com, added a splash screen and featured the famous Shiba Inu dog from the "Doge" Internet meme as the coins logo. Markus stumbled across a link to the site in an IRC chat room and then reached out to Palmer, where he then started efforts to create the Dogecoin digital currency. 

The Technical Side of Dogecoin’s History

Markus based Dogecoin on an existing cryptocurrency called Luckycoin, which in turn was based on Litecoin, which was based on Bitcoin. Like Bitcoin and Litecoin, Dogecoin uses a proof-of-work algorithm but has adopted Litecoin’s scrypt technology, which means that miners cannot use SHA-256 bitcoin mining equipment and other advanced mining devices are complicated to create. Other differences include Dogecoin’s block time which is 1 minute, as opposed to Litecoin’s 2.5 minutes and Bitcoin’s 10 minutes. Also, Dogecoin is an inflationary currency rather than a deflationary currency like Litecoin, Bitcoin, and most others. This means there is no limit to how many Dogecoins can be produced. 

Initially, Dogecoin was supposed to be hard-capped at 100 billion tokens but this limit was later removed in 2014. Now, Dogecoin has an inflation rate that is constantly reduced over a long time. Currently, there is a total supply of 121,467,390,306 DOGE which is all in circulation.

Purpose of Dogecoin

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Dogecoin never set out to be the “next Bitcoin” or “groundbreaking cryptocurrency” like so many others set out to be. Instead, Dogecoin was and still is, intended to be a simple cryptocurrency transaction platform with a dog as its mascot. The purpose of Dogecoin was to enable anyone in the world to actually use the cryptocurrency rather than hold it as an investment. 

Unlike Bitcoin, Dogecoin has stayed low in value and has very small transaction fees which makes it a viable cryptocurrency for tipping people over the internet and simply using it. Dogecoin has become one of the most popular coins for tipping users for content creation and is adored by nearly everyone. No other cryptocurrency can say this, which makes Dogecoin very unique and special. 

Speaking in an interview regarding the use of Dogecoin, the currency’s creator Jackson Palmer said:

“It is one of the few digital currencies that is predominantly being traded as a currency, rather than being bought up as a speculative investment. It’s being traded and tipped, rather than people holding it and waiting for a market fluctuation to sell it—which is awesome because that’s what digital currencies should exist for.”

Besides being a cheap and easy-to-use crypto for sending tips over the internet, Dogecoin makes people smile, laugh, and brings joy to others. Well, not the crypto itself per se, but its very large and supportive community. The Dogecoin community calls themselves “shibes” and are generally very positive, friendly, and welcoming.

Just look at this popular Reddit post from user change1378:

“As Dogecoin starts gaining serious value, we must focus on keeping this community about being friendly to each other; money corrupts, and I would hate to see this beautiful community turn into a money hungry beast… It’s important to remember what makes dogecoin unique. We should find a way for dogecoin to thrive, while keeping a friendly and welcoming attitude.”

As seen from the quote above, the community is very humble and together they founded a nonprofit organization called The Dogecoin Foundation with their goal: “to facilitate the use of Dogecoin through goodwill, promotional and charitable endeavors.”

All in all, Dogecoin is unlike any other cryptocurrency because of its positive and friendly community and its primary purpose to put a smile on people’s face. 

Dogecoin Fundraising and Charitable Endeavors

Shortly after The Dogecoin Foundation was formed, its community managed to successfully raise $50,000 in DOGE for the Jamaican bobsled team to compete in the Sochi Winter Olympics. Therefore, because of Dogecoin, the team was able to compete for the first time in 12 years but unfortunately, brought home no medals.

Another accomplishment of The Dogecoin Foundation was the building of a well in the Tana river basin in Kenya. The community managed to raise 40 million DOGE ($30,000 at the time), collected from more than 4,000 donations. This charitable donation was in collaboration with Charity: Water. 

Yet another accomplishment of the foundation includes the sponsorship of NASCAR driver Josh Wise who raced with his car decorated in a Dogecoin sponsored paint scheme at the 2014 Aaron's 499 at Talladega Superspeedway. The Dogecoin community successfully raised 67.8 million DOGE (around $55,000 at the time) to make this sponsorship possible. 

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The foundation’s most recent accomplishment was the raising of enough funds to literally send a physical representation of a Dogecoin to the actual Moon. The initiative is in collaboration with Astrobotic and set for launch in Q2 2021.

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Dogecoin Issues and Controversies

Though Dogecoin is supposed to be the fun-loving cryptocurrency that nobody hates on, it’s not exempt from the various issues and controversies evident in the crypto industry. For instance, shortly after Dogecoin’s launch, the cryptocurrency suffered a major theft on December 25, 2013, where millions of coins were stolen during a hack on the online cryptocurrency wallet platform Dogewallet. 

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However, in Dogecoin fashion, after just one month the humble community managed to raise enough money to cover all of the coins that were stolen. The initiative was named "SaveDogemas" and all of the raised funds were donated to those who lost funds due to the hack. 

Moreover, another controversy appeared in April 2015 when Palmer announced that he would be taking an extended leave of absence from Dogecoin and the crypto industry as a whole. He claimed that the crypto community had become “toxic” and didn’t want to be apart of it anymore. He did, however, tell Dogecoin community supporters to stay positive and continue to have fun. 

Another controversial aspect of Dogecoin is that the development of the project has come to a standstill. As stated by Palmer in a March 2017 interview with Coindesk:

“New features aren’t being implemented into dogecoin because there’s no active development anymore. Eventually, it will become outdated. And with that, the network will organically wind down.”

However, Palmer also mentioned that Dogecoin’s core development team will keep the software stable and secure to keep the currency operational.

Conclusion

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While Dogecoin may have started as a joke to poke fun at the cryptocurrency craze, it has since become a global sensation and evolved into one of the top digital currencies on the market today. At its peak in January 2018, Dogecoin reached an astonishing market cap of over $2 billion and while it has since come back down to earth, the meme oriented coin ranks 28 on CoinMarketCap

Dogecoin doesn’t have any fancy features and doesn’t plan on innovating anytime soon. It doesn’t aspire to revolutionize the blockchain industry or become a payments standard. All it intends to do is make people smile and bring them together. Dogecoin has one of the largest, most friendly and welcoming communities in crypto, which is why it has become such a successful coin and will likely be around for years to come.  

What do you think about Dogecoin (DOGE)? Do you think it's worth investing in or should it just be used for fun? Let us know what you think in the comment section below.


Mr.CryptoWiki
Mr.CryptoWiki

In crypto since 2002 ;)


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