Quick Facts

Approximate Market Cap$18,063,995,385
Year Established2013
FounderBilly Markus, Jackson Palmer
Symbol/AbbreviationDOGE
UtilityMeme Coin

Dogecoin began as a parody in 2013. Dogecoin, based on a popular meme, was initially created as a joking version of Bitcoin. As a symbol, a Shiba Inu pet dog appears in the design.

Jackson Palmer forked Bitcoin and created his own cryptocurrency. The currency gained popularity as a way for Reddit users to tip one another.

This use case allowed people to share the idea of Dogecoin virally. Dogecoin became valuable. Yet, the currency did not have any technical properties that made it better than Bitcoin.

What is Dogecoin – Definition

Dogecoin (Doge) is a cryptocurrency. It uses a P2P network and a Proof of Work algorithm Blockchain infrastructure.

Dogecoin, unlike Bitcoin, is not a deflationary currency. Like fiat currencies such as the dollar or euro, Dogecoin is subject to inflation. The inflation rate of Dogecoin is not as bad as the inflation rate of fiat currency. Yet, the supply is still unlimited. 

Using a Doge meme wasn’t just a joke. It was also intended to make Dogecoin appear more user-friendly to the general public.  

One of the most popular uses of Dogecoin is “tipping” an internet friend who creates or shares great content.

There are two main ways in which Dogecoin’s value gets its direction communicated:

  • Relative to Bitcoin
  • Relative to Fiat money

Pros and Cons

Pros

  • Suitable for day trading
  • Popular among celebrities
  • Involved in humanitarian causes

Cons

  • Volatile
  • Joke nature
  • Not a transactional currency

The History

Dogecoin started as a mockery to ridicule the endless speculation in cryptocurrencies at the moment. Two developers created Dogecoin with the idea to reach wider popularity than Bitcoin.

After the release of dogecoin.com, the value of Dogecoin increased by over 300 percent in 72 hours. It had a daily volume of billions of Dogecoins. Shortly afterward, Dogecoin had its first significant fall. Its value decreased by 80%.

The Dogecoin developers have previously worked in industry leaders such as IBM and Adobe. Their experience made Dogecoin a project built on solid technical fundamentals.

In May 2021, SpaceX announced a Dogecoin-funded ride-sharing trip to the Moon. It was the first time a cryptocurrency was used to finance a space mission.

How Dogecoin Works

Dogecoin runs on Blockchain technology. It follows the same rules as Litecoin for its proof-of-work. Its blockchain – Dogechain is a public record of all transactions made between DOGE wallets. Its network employs encryption to ensure the security of all transactions.

Miners get Dogecoin in return for processing transactions and backing the blockchain system. They can use the open market to buy or sell DOGE.

Mining DOGE required specialized hardware. That is why it was only accessible to a small group of IT experts. It also doesn’t include any passive income opportunities.  

DOGE can be easily bought with other currencies. DOGE is simple assets that can be either sent, received, or stored. However, Dogecoin is not available on decentralized exchanges.  People still have to use centralized marketplaces to buy it.   

Advantages & Disadvantages

Advantages

Scalability

DOGE’s algorithm makes use of SCRYPT. This might aid its further adoption as a trading currency. 

Resilient of censorship

The network is safe and allows for real-time agreement.

Mainstream Partnerships

When it comes to celebrities, DOGE is one of their favorite cryptocurrencies. Such partnerships confirm the DOGE’s legitimacy, credibility, and authenticity.

Disadvantages

Technology background

Since 2015, there have been no substantial breakthroughs or technology improvements.

Price volatility

Dogecoin is a coin that is subject to inflation. Inflation restricts the usefulness of Dogecoin as a means of investment.

Dogecoin in the Global Crypto Market

DOGE is currently ranked as the 5th most valuable cryptocurrency by market capitalization. The Dogecoin market is worth an astounding 50 billion dollars.

Every day, the number of famous DOGE supporters becomes bigger. And when celebrities enter the Dogecoin holding club, thousands of enthusiasts rush to his or her side. Elon Musk is the world’s most active supporter of Dogecoin.A series of tweets posted by Musk managed to pump the dogecoin price by 800%.

The popularity of Dogecoin is increasing, and so does its price. But as Doge gets more popular, the problems with its outdated PoW algorithm are becoming more apparent. 

FAQ

Who is in charge of Dogecoin?

Simply by looking at it, no one or everyone performs equally. The creators can create new software, but the community must choose whether or not to utilize it.

Is there a wallet for Dogecoin?

Yes, there is. The Dogecoin official wallet is available in two formats: Core and Lite.

What is a “Dogecoin tipbot”?

Tipbot is software that allows users to send crypto tokens via comments as a reward. In this case, means to allow users to send DOGE via comments.