Dogecoin is a peer-to-peer digital currency, much like Bitcoin, created to enable users around the globe to send transactions anonymously, at low cost and without intermediaries. Dogecoin is traded under the ticker symbol DOGE, and is recognizable by one of the internet’s favorite meme mascots, Shiba Inu, a Japanese breed that became popular under the name Doge as seen in numerous other memes. This is probably why Dogecoin was considered to be a joke coin.
However, incorporating the image of Doge into the project that represents the cryptocurrency Dogecoin, it appears that the dev team behind DOGE has found a faithful community for marketing their project. Starting with what appeared to be a joke, Dogecoin soon raised 60 million dollars in the course of a year, giving it a market cap of $60 million USD by January 2014. According to the official dev team, Dogecoin should be regarded as an internet currency, serving the purpose of a like or upvote that carries actual value. DOGE is often used in this way for tipping content creators, and therefore providing value for digital and online content. Dogecoin probably managed to come this far, even though it is regarded as a joke currency by many, due to the fact that the project is backed by a faithful, friendly and active community of crypto enthusiasts, who are known for having raised funds for charity on more than a one occasion, which includes raising around $36,000 USD for the Jamaican bobsled team that couldn't afford to go to the Winter Olympics, even though they had qualified.
The funds were raised in DOGE, with the help of the proactive community, which in a way, represents Dogecoin. However, when it comes to the technical side of this altcoin, Dogecoin didn’t bring anything new to the table, aside from reducing the block creation time from 10 minutes, as required by the Bitcoin blockchain, to one minute. In this way, DOGE represents a faster and more cost-effective option for sending and receiving microtransactions, as well as for tipping content creators across social networks. What is interesting regarding the technology that Dogecoin uses is that this crypto was actually based on a digital asset named Luckycoin, which was originally based on Litecoin, which originated from the first Bitcoin hard fork. Moreover, while many altcoins are being issued and developed to address scalability, network efficiency, and the broad application of blockchain technology, such as AI integrations and IoT operations, Dogecoin is simply an internet currency without carrying a “higher” value within its creation.
What is DOGE
Dogecoin can be traded under the DOGE ticker. It is mostly used among the DOGE community for social media tipping and for online-based money transfers, as DOGE is an alternative internet currency, with the original team having no intention for Dogecoin to compete for a slice of the market share. Dogecoin can also be used as an alternative payment method, as there are a number of online retailers accepting DOGE as a valid payment method. As far as trading is concerned, Dogecoin is not among the most popular cryptos for investors and traders, although it managed to reach the top 10 list on one occasion. Dogecoin was also on the list of top 20 cryptocurrencies by market cap, however, it subsequently sank to the top 30 list and then below.
Dogecoin: Origins and History
Dogecoin was created by Jackson Palmer and Billy Marcus. At the time when the project concept was still being developed, Palmer held a position in the marketing department at Adobe Systems, located in Sydney, while Marcus, a programmer based in Portland, Oregon, had the idea to create and develop a form of cryptocurrency that would exist outside the provocative and controversial origins and history of other cryptocurrencies and digital assets, such as Bitcoin. Palmer was mentioned on Twitter more than once by an enthusiast who noted the potential in Marcus’ idea to create a coin that we now know as Dogecoin, after which he purchased the domain dogecoin.com, that way moving the idea closer to realization. Marcus decided to base the Dogecoin architecture on an existing currency named Luckycoin, while this crypto, in turn, was based on the original altcoin and the first fork derived from the Bitcoin Core protocol, Litecoin. The team favored the fact that Litecoin and Lucky coin use Scrypt instead of SHA-256 which Bitcoin uses for its mining mechanism, that way lowering competitiveness in Dogecoin mining.
After development, Dogecoin was released and officially issued on December 6th, 2013. However, the team encountered a cybersecurity problem less than three weeks later when a substantial number of Dogecoin units was stolen from Dogewallet, the online cryptocurrency wallet. This sparked negative news regarding Dogecoin security, and the reliability of the network. At the time, Dogecoin was the top-mentioned keyword on Twitter, in a negative sense, due to the cyber theft. The Dogecoin community soon managed to raise enough DOGE units to cover the losses that DOGE users suffered. Two years later, in 2015, one of the founders and the initiator of the project, Jackson Palmer, announced that he would be taking an extended leave from the community, without providing a reason. In January 2014, almost a year before Palmer’s decision to depart from the DOGE community, Dogecoin trading volumes briefly surpassed the combined trading volumes of BTC and other cryptocurrencies.
Dogecoin: Protocols and Technology
Dogecoin was the result of an idea by Billy Marcus, and is based on the Luckycoin cryptocurrency, while Luckycoin was developed and based on the idea of Litecoin. Litecoin is faster than Bitcoin, in terms of transaction speed and block generation time. It was also the first altcoin, and was derived from the original fork of Bitcoin, the first cryptocurrency. Moreover, Litecoin uses Scrypt instead of SHA-256 for its mining algorithm. Since Luckycoin was based on Litecoin, and Dogecoin was developed based on the protocols used in the architecture of Luckycoin, Dogecoin also uses Scrypt.
The use of Scrypt enables lower competitiveness in mining, which means that ASICs can’t join the network of miners. New DOGE units are created whenever a new block is generated, while miners are working on securing the network and making it efficient by solving mathematical equations with the use of computational power. Unlike Litecoin, for instance, Dogecoin has an infinite supply, with a reward of 10,000 DOGE units for every new block. The protocol used by Dogecoin is Proof-of-Work, which is the same as Bitcoin and other crypto derivatives mentioned above. Litecoin’s block generation time is 2.5 minutes, while Dogecoin takes one minute to create a new block on the network, meaning that micro-transactions are more efficient, and thus far more cost-effective. At the peak of its market value back in December 2017, Dogecoin was on the list of top 10 to 20 cryptocurrencies, with a market cap of $2 billion dollars. However, as analysts have stated, that value wasn’t achieved due to a perfect technology or a new crypto innovation, but was driven more by hype and Bitcoin’s upward path.
Dogecoin (DOGE) Wallets
Dogecoin is a non-tangible asset, just like other cryptocurrencies and altcoins, which means that you need to keep your DOGE coins in a digital wallet. There are several types of digital wallets that DOGE holders can choose from, including hardware and software wallets. The most recommended wallet for DOGE is clearly the Ledger Nano X hardware wallet, which is especially handy for long-term holders with more DOGE units to take care of. Ledger Nano S is another model of hardware wallet that supports DOGE. For users who prefer mobile wallets, Coinomi and Exodus are some of the most favored choices for storing DOGE. For desktop users, Exodus and Dogecoin wallet are some of the safest choices. Some desktop and mobile wallets can be synchronized. Users may also keep their DOGE funds in a web wallet such as My Dogechain.info. Paper wallets are the least technologically advanced wallets, but are a great alternative for keeping your funds out of the reach of hackers.
Dogecoin has a specific user base, with a strong level of emotion woven into the project by the support of its community, which Dogecoin devs appear to take pride in. Based on how the project was initiated and eventually launched, it also appears that the team never intended to compete with Bitcoin, but rather, to enable fast micro-transactions and an alternative form of internet currency. That appears to be why Dogecoin fans see more pros than cons. Traders, however, don’t seem to take Dogecoin seriously, which is probably why DOGE went from a market cap of $2 billion USD in 2017 to just under $300 million dollars.
The later departure of one of the founders might also have shaken investors’ faith in Dogecoin. Currently, the Dogecoin dev team have not proposed any solutions for increased scalability, or other improvements that might contribute to the overall development of blockchain-based environments. Their role in the market is modest, as is their technical goals, which some investors may consider to be negative.