What is Dogecoin?
Often referred to as the “meme currency” and originally created as a joke, Dogecoin has become a cryptocurrency used to tip others on the internet and raise funds for initiatives around the globe.
Because it is a fan favorite, the value of Dogecoin is followed closely by many.
The Origin of Dogecoin
Dogecoin started as a joke but eventually turned into real software. It all started because Jackson Palmer–Dogecoin’s co-founder—was into cryptocurrency and the internet meme of the Shiba Inu in late 2013.
It was also during this period of time when more and more altcoins were beginning to enter the blockchain space. Palmer says that most of these altcoins had a prefix and the word “coin” tagged onto the end. So Palmer thought it would be funny combine the popular meme of the Shiba Inu, with the popular and upcoming blockchain-based technologies, and made a joke on twitter saying, “I’m going to invest in Dogecoin,” a combination of two trending topics. Palmer was joking when he said this, but the joke went viral, and many Twitter users encouraged Palmer to make this joke a reality.
After receiving several requests to make Dogecoin an actual altcoin, Palmer bought the Dogecoin.com domain and set up the website. Shortly after, Dogecoin’s other co-founder, Billy Markus, a computer programmer from Portland, Oregon, saw the link for the Dogecoin website in an IRC chatroom and reached out to Palmer about developing Dogecoin. Markus and Palmer joined forces and created Dogecoin by forking BellsCoin — an altcoin Markus created about a week before creating Dogecoin.
Interestingly, Bellscoin was a fork of LuckyCoin, which was a fork of Litecoin; and for this reason, Dogecoin is relatively similar to Litecoin in terms of its architecture.
How Dogecoin works
Dogecoin is a stand-alone blockchain network with a proof-of-work consensus. Similar to Litecoin, Dogecoin uses a Scrypt protocol. The Scrypt algorithm slightly differs from the more common SHA-256 protocol (found on the Bitcoin network) in that it requires a larger amount of memory to operate. Apart from randomly generating hashes, Scrypt proof-of-work also stores these hashes in the RAM of the processor. Typically, Scrypt protocols have a lower hashrate than SHA-256 protocols.
The average block time on the Dogecoin network is one minute, and the block reward for solving a block is 10,000 Doge, which is equal to about $22 in late 2018.
The value of Dogecoin
Dogecoin was created without any real purpose or goal in mind; it was not made to solve any problems that existed in the world, rather, it was created for fun. However, even before it’s token launched, Doge has had an active community. That being said, community members found a way to leverage the Dogecoin to serve a purpose. For a while, Dogecoin served as a popular way to raise funds for initiatives around the globe. The Dogecoin Foundation, in particular, spearheaded this movement.
Created on June 26, 2014, The Dogecoin Foundation was a non-profit organization that raised funds in Dogecoins for initiatives taking place around the world. For example, the Dogecoin foundation raised $36,000 to help the Jamaican Bobsled Team afford their trip to the 2014 Sochi Winter Olympics, and raised 67.8 million Dogecoins–around $55,000 at the time–to sponsor NASCAR driver John Wise.
Both of these initiatives were successful, the Jamaican Bobsled team was able to go to the Sochi Winter Olympics, and John Wise was able to participate in a number of races, brandishing the Dogecoin logo on the hood of his vehicle. But unfortunately, due to potential legal complications–mostly fear of FinCen and other government agencies–the Dogecoin foundation shut down in 2015.
Dogecoin was also popular for tipping others on the internet, more specifically, users on social media platforms. Internet users would send Dogecoins to others for posting or sharing insightful content after creating an account with a Dogecoin tip bot on the respective social media platform.
Dogecoin In A Nutshell
Although the Dogecoin value might not be significant in terms of its underlying purpose, Doge is a fan favorite. What started as a joke, eventually became a real software, and stuck around as a digital currency with an extremely active and supportive community that found innovative ways to keep it afloat.