Dogecoin is a decentralized, peer-to-peer cryptocurrency. It was launched as a joke but over time, it became a fully-functional and widespread cryptocurrency. This coin was inspired by a popular internet meme that features a Shiba Inu dog breed. Even though its origin is rather humorous, this coin is now used for tipping, donations, and even online transactions.
Table of contents
- The History of Dogecoin
- Who Created and Who Owns Dogecoin?
- How Does Dogecoin Work?
- How Many Dogecoins Are in Circulation?
- Uses and Popularity of Dogecoin
- The Future of Dogecoin
- Conclusion
The History of Dogecoin
Dogecoin was launched on December 6, 2013, by software engineers Billy Markus and Jackson Palmer. This coin was created to mock Bitcoin. The DOGE supply is unlimited and the coin is very easy to mine. Over time, these features made DOGE one of the most popular coins out there.
A Memecoin That Became a Phenomenon
Even though DOGE was launched as a joke, it became very popular. Twitter and Reddit played an important role in the development of the coin. Also, the friendly nature of the coin and meme-driven culture that surrounded the crypto made it appealing for newcomers in the crypto world.
After that, DOGE became widely associated with online tipping, crowdfunding, and donations. This solidified its place in the crypto ecosystem.
Who Created and Who Owns Dogecoin?
Dogecoin was created by Billy Markus, a software developer from IBM, and Jackson Palmer, a marketing professional at Adobe. These two developers designed the project based on the open-source code of Litecoin. They modified some of the Litecoin key features and created a more accessible and fun coin. DOGE was not designed for some practical purpose. It was designed as a joke, and offered quick and easy transactions with minimal fees.
Dogecoin’s blockchain is decentralized. It means that no single entity or organization owns and manages it. However, there are some big holders called whales that hold a significant portion of coins. This raised concerns about the possible market manipulation.
The Influence of Elon Musk on Dogecoin
Elon Musk, a famous inventor and entrepreneur, the CEO of Tesla and SpaceX, has a significant impact on Dogecoin. Musk is constantly tweeting about DOGE. He refers to DOGE as "the people's crypto". Elon Musk even suggested that DOGE may become the first currency of Mars. His positive tweets have historically caused price surges of DOGE. Now, DOGE is a recognized cryptocurrency, and it is expected that its importance and adoption will grow even more over time.
How Does Dogecoin Work?
Dogecoin runs on its own blockchain, just like Bitcoin and Litecoin. The Dogecoin blockchain is decentralized. DOGE has an unlimited supply, and it affects its price and economic model.
Dogecoin uses the Proof-of-Work (PoW) consensus mechanism. So, transactions are confirmed through mining. Miners solve complex mathematical equations to secure the network, validate transactions, add them to new blocks, and then, to add those new blocks to the blockchain.
The Dogecoin’s PoW mechanism is based on Scrypt technology. It allows to confirm blocks faster and consumes less energy than the Bitcoin’s SHA-256 algorithm.
Main Differences Between Dogecoin and Bitcoin
The main differences between Dogecoin and Bitcoin are the following.
- Faster transactions: Dogecoin has a block time of 1 minute. Bitcoin’s block time is 10 minutes.
- Lower fees: Dogecoin transaction fees are much lower than the fees on the Bitcoin blockchain. This is why DOGE is suitable for microtransactions.
- Unlimited supply: Bitcoin has a fixed supply. Dogecoin has an inflationary model, it has an unlimited supply.
How Many Dogecoins Are in Circulation?
Over 140 bln of Dogecoins are already in circulation, and more coins are being added constantly. DOGE has an unlimited supply, this is why new coins will be created indefinitely.
The inflationary model of Dogecoin means that every year, more than 5 bln new DOGE coins will be created. This keeps the transaction fees low but also pushes the DOGE price down. Bitcoin has a deflationary model, the number of BTC coins will be decreasing over time. This maintains the BTC price, but also the transaction fees are high.
Uses and Popularity of Dogecoin
Dogecoin was created as a joke, but over time, it grew to become one of the most popular cryptocurrencies. Now, a lot of merchants and businesses accept DOGE as a form of payment. The main use cases are the following:
- Online tipping: Reddit and Twitter use DOGE to tip content creators.
- E-commerce: Some online businesses accept DOGE as a payment method for their goods and services.
- Charity and crowdfunding: DOGE is used for charitable projects, such as the construction of systems to provide water for communities, sponsoring sports teams, and others.
Dogecoin as a Payment Method
Dogecoin has very low transaction fees, and the transactions are very fast. This is why this coin was adopted by some companies as a payment method. For example, Tesla accepts DOGE for some merchandise, and some more online companies also accept DOGE.
Donations and Charity With Dogecoin
The community of Dogecoin has a very strong reputation because they support charitable projects. Some of the most known projects are:
- Doge4Water: This fundraising campaign helped to get funding to build clean water wells in Kenya.
- Jamaican Bobsled Team Sponsorship: The DOGE community helped to fund the participation of the Jamaican bobsled team in the 2014 Winter Olympics.
- NASCAR Sponsorship: The DOGE supporters helped to collect funds for a NASCAR driver.
The Future of Dogecoin
Even though DOGE was launched as a meme, as a joke, it is a legitimate cryptocurrency now. It has a strong supportive community, and it is used for many purposes.
Even though it doesn’t support smart contracts or DeFi like Ethereum, it implements new functions to improve the blockchain.
DOGE functions like digital cash. It has high transaction confirmation speed and low blockchain fees. This also contributed to the coin adoption and growth.
Dogecoin Price Prediction
It is difficult to forecast the DOGE price. It is impacted by market trends, social media and influencers, and many other factors. However, there is no doubt that the coin continues to grow and expand. It means that it will maintain a stable position in the crypto market.
Conclusion
Dogecoin was launched as a joke but over time, it evolved into a well-known cryptocurrency. It has a friendly and strong community, fast transactions, and very low fees. With it, DOGE is a perfect match for many real-world applications, such as tipping, donations, and payments. It means that over time, its impact on the ecosystem will be growing.