What is Dogecoin?
Dogecoin is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a "joke", making fun of the wild speculation in cryptocurrencies at the time.[3] It is considered both the first "meme coin", and, more specifically, the first "dog coin". Despite its satirical nature, some consider it a legitimate investment prospect. Dogecoin features the face of the Shiba Inu dog from the "doge" meme as its logo and namesake.[4][5][6] It was introduced on December 6, 2013, and quickly developed its own online community, reaching a market capitalization of over $85 billion[a] on May 5, 2021.[7] It is the current shirt sponsor[b] of Watford Football Club.[8]
Dogecoin.com promotes the currency as the "fun and friendly Internet currency", referencing its origins as a "joke."[9] Software engineers Billy Markus and Jackson Palmer launched the satirical cryptocurrency as a way to make fun of Bitcoin and the many other cryptocurrencies boasting grand plans to take over the world. With the help of Reddit, the site became an instant hit. Within two weeks, Dogecoin had established a dedicated blog and forum, and its market value has reached US$8 million, once jumping to become the seventh largest electronic currency in the world.[10] Dogecoin is based on Scrypt algorithm, and the transaction process is more convenient than Bitcoin. Dogecoin takes only 1 minute to confirm, while BTC takes 10 minutes.
History
Originally formed as a "joke",[11] Dogecoin was created by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer. They wanted to create a peer-to-peer digital currency that could reach a broader demographic than Bitcoin. In addition, they wanted to distance it from the controversial history of other coins.[12] Dogecoin was officially launched on December 6, 2013, and within the first 30 days, there were over a million visitors to Dogecoin.com.[13]
Palmer is credited with making the idea a reality. At the time, he was a member of the Adobe Systems marketing department in Sydney.[14] Palmer had purchased the domain Dogecoin.com and added a splash screen, which featured the coin's logo and scattered Comic Sans text. Markus reached out to Palmer after seeing the site, and started efforts to develop the currency. Markus had designed Dogecoin's protocol based on existing cryptocurrencies Luckycoin and Litecoin,[15] which use scrypt technology in their proof-of-work algorithm.[16] The use of scrypt means that miners cannot use SHA-256 bitcoin mining equipment, and instead must use dedicated FPGA and ASIC devices for mining which are known to be more complex to produce.[17][18]
On December 19, 2013, Dogecoin jumped nearly 300% in value in 72 hours, rising from US$0.00026 to US$0.00095,[19] 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.[15] Three days later, Dogecoin experienced its first major crash by dropping by 80% due to this event and to large mining pools exploiting the small amount of computing power required at the time to mine Dogecoin.[20]
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.[21] 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.[22][23] 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.[24]
In January 2014, the trading volume of Dogecoin briefly surpassed that of Bitcoin and all other cryptocurrencies combined. However, its market capitalization remained substantially behind that of Bitcoin. Initially, Dogecoin featured a randomized reward that is received for each mining block. However, in March 2014, this behaviour was later updated to a static block reward
Co-founder Jackson Palmer left the cryptocurrency community in 2015 and has no plans to return, having come to the belief that cryptocurrency, originally conceived as a libertarian alternative to money, is fundamentally exploitative and built to enrich its top proponents. His co-founder, Billy Markus, agreed that Palmer's position was generally valid.[26][27]
During 2017 to early 2018 cryptocurrency bubble, Dogecoin briefly reached a peak of US$0.017/Ð1 on January 7, 2018, putting its total market capitalization near US$2 billion.
In July 2020, the price of Dogecoin spiked following a TikTok trend aimed at getting Dogecoin to US$1.[28]
On May 9, 2021, SpaceX announced a rideshare mission to the Moon completely funded by Dogecoin, thus becoming the first space mission funded by a cryptocurrency. Elon Musk confirmed this news via Twitter.[29] DOGE-1 will be a minor 40 kg rideshare payload on Intuitive Machines' IM-1 mission in Q1 2022.[30][31][32][33][34]
On August 14, 2021, the Dogecoin Foundation announced the "re-establishment of the Dogecoin Foundation (est 2014), with a renewed focus on supporting the Dogecoin Ecosystem, Community and promoting the future of the Dogecoin Blockchain."[35] The Foundation was reinvigorated by the addition to its Board of notable advisors such as Vitalik Buterin (Ethereum co-founder and inventor) and Jared Birchall (representing Elon Musk)
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