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Dogecoin (DOGE) is an open-source peer-to-peer (P2P) digital currency based on a December 2013 fork of LuckyCoin, which is a fork of Litecoin. It was created in the early days of cryptocurrency as a parody cryptocurrency, deriving its name from the “Doge” meme featuring Shiba Inu dogs popular at the time. Its original creators, Billy Markus and Jackson Palmer wanted to create a cryptocurrency to bring positive awareness to the cryptocurrency space and appeal to a broader audience. Billy Markus, co-creator, said of Dogecoin, "The original intent was a parody of all the 'serious' clone coins that were trying so hard to differentiate themselves, but all seemed the same." Despite its numerous deficiencies when compared to other cryptocurrencies such as Bitcoin and Ethereum, DOGE has accumulated a large and passionate community that has helped the project remain relevant for nearly nine years.

Use Case

Dogecoin (DOGE) is an open-source peer-to-peer digital currency that is based on a December 2013 fork of LuckyCoin, which is a fork of Litecoin. Its original creators, Billy Markus and Jackson Palmer wanted to create a cryptocurrency to bring positive awareness to the cryptocurrency space. They thought a fun digital currency would appeal to a broader audience, but little did they know that its “doge” mascot would help it gain a cult following. Billy Markus, co-creator, said of Dogecoin "The original intent was a parody of all the 'serious' clone coins that were trying so hard to differentiate themselves, but all seemed the same." It is a Proof of Work (PoW) coin which is “merged mined” with Litecoin, meaning miners run programs to mine both chains simultaneously. 

Dogecoin is the coin that features the face of the Shiba Inu from the “Doge Meme” as its logo and namesake. The aim of having a mascot for Dogecoin was to have it create a greater appeal beyond the core Bitcoin audience as it was based on a meme. Dogecoin was not created to be a Store of Value (SoV). Dogecoin is mainly used for speculation as of late but was originally used for tipping on Reddit, Twitch, and Twitter for content creators. Additionally, Mark Cuban, the owner of the Dallas Mavericks, recently started accepting Dogecoin as payment for tickets and merchandise with BitPay. 

Using Dogecoin as a payment method allows for a business sales opportunity into international markets. Credit cards charge higher fees and sometimes lack transparency and efficiency. Dogecoin is open and permissionless, which allows for quick and easy transactions across borders.

Tokenomics

Dogecoin (DOGE) had a “fair launch”, like Bitcoin, meaning that there was no ICO, pre-mine, or insider sales to VC firms like many tokens created today. DOGE tokens are produced by mining blocks, which reward miners with a randomized quantity of coins. Palmer originally capped the DOGE token supply at 100 billion DOGE, but in February 2014, the cap was abolished and a consistent albeit small inflationary issuance model was instituted, shifting the cryptocurrency from a deflationary to an inflationary supply model. The block reward is now fixed at 10,000 DOGE per block, with one block being mined every minute equalling 14,400,000 new tokens per day.

⁠Dogecoin supply inflation is currently 4.0% per year and will decrease, relatively speaking, every year as there is more DOGE in circulation, yet the absolute inflation numbers stay the same. Over time, new supply eventually would fall to an arbitrarily low value ( for example, 0.00000001% per year), but can never reach exactly 0%. Elon Musk expressed this point succinctly when he wrote: "Doge appears to be inflationary, but is not meaningfully so (fixed # of coins per unit time), whereas BTC is arguably deflationary to a fault."

Dogecoin can be mined in a mining pool or alone. The table below draws a comparison between Litecoin, Bitcoin, and Dogecoin’s mining specifics (provided by Jordi Carbajal):

Source: Jordi Carbajal

Dogecoin has a worldwide market for anyone with Internet access and a smartphone or electronic device that supports Dogecoin wallets. Dogecoin doesn’t have borders, so people can make transactions with little friction, unlike many legacy financial systems.

It's an open market, so the current value is simply decided by whatever someone is willing to pay for it at a specific point in time. Dogecoin is widely available on many exchanges including international exchanges like OKex, Binance, Huobi, and more.