Dogecoin

Doge

Dogecoin [dowzh-coin] (Ð) is a cryptocurrency featuring a likeness of the Shiba Inu dog from the ‘Doge’ Internet meme as its logo. Introduced as a ‘joke currency’ in 2013, Dogecoin quickly developed its own online community and reached a capitalization of $60 million within months.

It’s market capitalization peaked in 2018 at $2b; today it is pegged at $600m. In July 2020 the price of Dogecoin spiked following a TikTok trend aiming to get the coin’s price to $1.

Compared with other cryptocurrencies, Dogecoin had a fast initial coin production schedule: 100 billion coins were in circulation by mid-2015, with an additional 5.256 billion coins every year thereafter. As of 2015, the 100 billionth Dogecoin had been mined. While there are few mainstream commercial applications, the currency has gained traction as an Internet tipping system, in which social media users grant Dogecoin tips to other users for providing interesting or noteworthy content. Dogecoin is referred to as an altcoin.

Dogecoin was created by programmer Billy Markus from Portland, Oregon, who hoped to create a fun cryptocurrency that could reach a broader demographic than Bitcoin. In addition, he wanted to distance it from the controversial history of other coins. At the same time, Jackson Palmer, a member of Adobe Systems’ marketing department in Sydney, was encouraged on Twitter by a student at Front Range Community College to make the idea a reality.

After receiving several mentions on Twitter, Palmer purchased the domain dogecoin.com and added a splash screen, which featured the coin’s logo and scattered Comic Sans text. Markus saw the site linked in an IRC chat room, and started efforts to create the currency after reaching out to Palmer. Markus based Dogecoin on an existing cryptocurrency, Luckycoin, which features a randomized reward that is received for mining a block, although this behavior was later changed to a static block reward in 2014.

In turn, Luckycoin is based on Litecoin, which also uses scrypt technology in its proof-of-work algorithm. The use of scrypt means that miners cannot use SHA-256 bitcoin mining equipment, and that dedicated FPGA and ASIC devices used for mining are complicated to create. The Dogecoin network produces infinite Dogecoins.

On December 19, 2013, Dogecoin jumped nearly 300 percent in value in 72 hours, rising from US$0.00026 to $0.00095, with a volume of billions of Dogecoins per day. This growth occurred during a time when Bitcoin and many other cryptocurrencies were reeling from China’s decision to forbid Chinese banks from investing into the Bitcoin economy. Three days later, Dogecoin experienced its first major crash by dropping by 80% due to this event and due to large mining pools seizing opportunity in exploiting the very little computing power required at the time to mine Dogecoin.

On December 25, 2013, the first major theft of Dogecoin occurred when millions of coins were stolen during a hack on the online cryptocurrency wallet platform Dogewallet. The hacker gained access to the platform’s filesystem and modified its send/receive page to send any and all coins to a static address. This hacking incident spiked tweets about Dogecoin, making it the most mentioned altcoin on Twitter at the time, although it was in reference to a negative event.

To help those who lost funds on Dogewallet after its breach, the Dogecoin community started an initiative named ‘SaveDogemas’ to help donate coins to those who had them stolen. Approximately one month later, enough money was donated to cover all of the coins that were stolen. On January 2014, the trading volume of Dogecoin briefly surpassed that of Bitcoin and all other crypto-currencies combined, however, its market capitalization remained substantially behind that of Bitcoin.

The Dogecoin community and foundation have encouraged fundraising for charities and other notable causes. On January 19, 2014, a fundraiser was established by the Dogecoin community to raise $50,000 for the Jamaican Bobsled Team, which had qualified for, but could not afford to go to, the Sochi Winter Olympics. By the second day, $36,000 worth of Dogecoin was donated and the Dogecoin to bitcoin exchange rate rose by 50%. The Dogecoin community also raised funds for a second Sochi athlete Shiva Keshavan.

Inspired by the Winter Olympics fundraiser and smaller charity fundraising successes, the Dogecoin Foundation, led by Eric Nakagawa, began collecting donations to build a well in the Tana river basin in Kenya in cooperation with Charity: Water. They set out to raise a total of 40,000,000 ($30,000 at the time) Dogecoin before World Water Day (March 22). The campaign succeeded, collecting donations from more than 4,000 donors, including one anonymous benefactor who donated 14,000,000 Dogecoin (approx. $11,000).

On March 25, 2014, the Dogecoin community successfully raised 67.8 million Dogecoins (around $55,000 at the time) in an effort to sponsor NASCAR driver Josh Wise. Wise ran with a Dogecoin/Reddit-sponsored paint scheme at the Aaron’s 499 at Talladega Superspeedway. On May 4, 2014, Wise and his car were featured for nearly a minute, during which the race commentators discussed Dogecoin and the crowdfunding effort, while finishing twentieth and narrowly avoiding multiple wrecks.

On May 16, 2014, Wise won a spot at the Sprint All-Star Race through an online fan vote beating household name Danica Patrick, largely due to the efforts of the Dogecoin Reddit community. He finished the race in fifteenth, the last car running. The following race in the Coca-Cola 600, Wise debuted a Dogecoin/Reddit.com helmet. Wise later announced he would run the car again at the Toyota/Save Mart 350 as a thank-you gift to the community and the GEICO 500. He finished twenty-eighth in the race due in part to a refueling issue. Eutechnyx, developer of the NASCAR ’14 video game, added the Dogecoin car as a drivable car in a DLC pack.

Trading physical, tangible items in exchange for DOGE takes place on online communities such as Reddit and Twitter, where users frequently share currency-related information. Dogetipbot was a cryptocurrency transaction service used on popular sites like Reddit and Twitch. It allowed users to send Dogecoins to other users through commands via Reddit comments. In May 2017 Dogetipbot was discontinued and taken offline after its creator declared bankruptcy; this left many Dogetipbot users losing their coins stored in the Dogetipbot system.

Unlike deflationary cryptocurrencies which have a limit on the number of coins that can be produced, there is no limit to how many Dogecoins can be produced, which makes it an inflationary coin. Dogecoin was initially to have a limit of 100 billion coins, which would already have been far more coins than the top digital currencies were allowing. In February 2014, Dogecoin founder Jackson Palmer announced that the limit would be removed and there would be no cap, which should have the result of constant reduction of its inflation rate over a long time.

Tags:

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.