What is Dogecoin – Learning the Ins and Outs
Introduction
The cryptocurrency market started in 2009 with the launch of Bitcoin by Satoshi Nakamoto. No one could have predicted how this space would grow and expand, something it has done quite rapidly. Today, there are thousands of cryptocurrencies that exist in the market, with each having its unique level of potential and profitability. Amongst the numerous options you will come across is Dogecoin, an open-source, peer-to-peer cryptocurrency. It is regarded as an altcoin and gained recognition as an almost sarcastic meme coin. The logo of Dogecoin is the image of a Shiba Inu dog (a Japanese breed) and it was introduced in the market in December 2013.
Even though Dogecoin’s blockchain was seemingly created as a joke, it appears that it has merit because the underlying technology has been derived from a notable cryptocurrency called Litecoin. Some of the prominent features of Dogecoin are its unlimited supply and low price and like Litecoin, it also uses the Scrypt algorithm. Its founders were Billy Markus and Jackson Palmer and it has built a loyal community of supporters.
As mentioned earlier, Dogecoin was launched as a joke, but it was able to gain a following after it was created. It had begun participating in the cryptocurrency bubble by late 2017, which sent the values of a number of coins up by a significant margin. However, once the bubble burst in 2018, most of Dogecoin’s value was wiped out, but it still boasts a core of supporters who trade it regularly and also use it for tipping content on Reddit and Twitter. It is possible for users to purchase and sell Dogecoin on various digital currency exchanges. They have the option of storing Dogecoin in a Dogecoin wallet or can also keep it on the exchange.
The History of Dogecoin
Dogecoin was created in 2013 by a product manager at Adobe Inc. in Sydney, Australia, named Jackson Palmer. It was a way of satirizing the hype that had been created about cryptocurrencies. He was considered a ‘skeptic-analytic’ observer of this new technology and the initial tweets that he had made about his new cryptocurrency project was done tongue-in-cheek. However, he had purchased the domain dogecoin.com after he had gotten feedback on social media networks.
Meanwhile, a software developer at IBM named Billy Markus who was residing in Portland, Oregon, was interested in creating a digital currency, but he had been having trouble in promoting his efforts. That’s when he had heard the buzz surrounding Dogecoin. He got in touch with Palmer for getting his permission in order to develop the actual software behind Dogecoin. He used Luckycoin for developing Dogecoin’s code, which itself has been derived from Litecoin. Initially, a randomized reward had been used for block mining, but in March 2014, this was changed to a static reward.
Dogecoin is a proof-of-work coin and it uses the script technology found in Litecoin. Markus and Palmer had introduced the coin on December 6th, 2013 and the value of Dogecoin had gone up by 300% two weeks later, perhaps due to the fact that China had prohibited its banks from investing in cryptocurrencies.
Dogecoin soon gained recognition as a fun version of the pioneer crypto i.e. Bitcoin and its logo was a Japanese breed of dog called Shibu Inu. The casual presentation of Dogecoin was in accordance with the mood of the burgeoning crypto community. Its unlimited supply and scrypt technology was an argument for a more adaptable, faster, and consumer-friendly version of Bitcoin. A unique feature of Dogecoin is that as opposed to other cryptocurrencies like Bitcoin which tends to be deflationary, it is an ‘inflationary coin’. This is due to the fact that Bitcoin has a ceiling on the number of coins that will be in total supply. After every four years, the amount of Bitcoin given as mining rewards and released into circulation is halved and its inflation rate is also reduced along with it until all the coins have been released.
The Dogecoin community had donated a total of 27 million Dogecoins in January 2014, which had been valued at $30,000 for funding the trip of the Jamaican bobsled team to the Sochi Winter Olympic games. Likewise, an $11,000 worth of Dogecoin had also been donated by the community in March of the same year for building a well in Kenya and NASCAR driver Josh Wise had also been sponsored by Dogecoin for $55,000.
However, in 2015, some of the mirth associated with Dogecoin’s freewheeling nature was lost because the crypto community had begun to get more serious. Jackson Palmer’s departure was the first indication that the Dogecoin community wasn’t doing so well.
During the crypto bubble at the end of 2017, the value of Dogecoin had skyrocketed with the rest of the cryptocurrencies out there and it also fell with all of them in 2018. At its peak, Dogecoin had been trading at a value of $0.018 and its market capitalization had been around $2 billion. Dogecoin had experienced another increase in value in the summer of 2019, along with the rest of the crypto-verse. It was a good day for Dogecoin enthusiasts when the coin was listed on the Binance exchange and many believed that Elon Musk, the CEO of Tesla, had endorsed the coin in a cryptic tweet.
Musk has now come out in full support of Dogecoin and it is because of him that the cryptocurrency has experienced further spikes in its value. As a matter of fact, Musk has gone as far as suggesting that Coinbase should list Dogecoin on its platform as well. If that happens, it would definitely be a transforming moment for the coin.
The infrastructure of the coin hasn’t been a source of concern for its developers, as they are still volunteers. The active community of miners is one of the reasons that Dogecoin continues to trade and operate. As of December 21st, 2020, the market capitalization of Dogecoin was ranked at number 43 and its total value had reached $611 million.
