Dogecoin is a peer-to-peer cryptocurrency based on a Shiba Inu dog internet meme that went viral on social media. At first, Dogecoin was created solely to poke fun at other cryptocurrency projects that were being launched at the time, but it quickly grew a devoted fan base that discovered and developed new use cases for it. It is regarded as the first "meme coin" and the first "dog coin."
Dogecoin claims to be significantly faster and less expensive than Bitcoin. For example, it can process approximately 33 transactions per second, compared to approximately five transactions per second on the Bitcoin network.
In 2014, members of the Dogecoin team started the Dogecoin Foundation, a non-profit, to provide support, governance, advocacy, and trademark protection for the token. However, the Foundation became inactive with time and was eventually dissolved. In 2021, the Foundation was relaunched with a board consisting of members of the core team and seasoned industry players, including Ethereum co-founder Vitalk Buterin, as advisors.
While the native token, DOGE, was initially developed without any specific utility, its use as a digital currency has increased over the years. As of September 2022, over 2,000 merchants across the globe accepted DOGE as payment. To this day, Dogecoin has one of the most robust and vibrant online communities in the crypto space.
How does Dogecoin work?
Dogecoin uses a Proof of Work (PoW) consensus mechanism that was cloned from Litecoin's network. It uses the Scrypt mining algorithm to validate transactions.
Dogecoin, similar to Bitcoin and other cryptocurrencies and altcoins, can be created through mining. Mining Dogecoin is a way to both support the network and gain new DOGE tokens in the process. This computationally intensive process involves computers competing to solve complex mathematical problems to verify transactions and secure the blockchain network. When miners successfully solve these problems and contribute to the network's security, they are rewarded with DOGE.
Dogecoin's blockchain network allows users to send DOGE to other users anywhere in the world without needing a financial intermediary to process the transaction. Transactions made over the network are permanently recorded and cannot be erased or reversed. Dogecoin's network can process up to 40 transactions per second, making it faster than Bitcoin's. It also has much lower transaction fees than Bitcoin.
Dogecoin has gained the support of many crypto enthusiasts as well as prominent celebrities over the years. The Dogecoin Foundation, the project's management team, has been relentlessly developing new features and maintaining the project to improve its utility. Dogecoin has also influenced many other popular cryptocurrencies in the crypto market, which are now referred to collectively as "meme coins."
DOGE price and tokenomics
Dogecoin had a max supply of 100 billion coins at first. This was later changed to an infinite supply. As a result, Dogecoin is inflationary, which means that its supply, which is currently 132 billion as of September 2022, will only grow over time.
New DOGE tokens are created in a computationally-intensive process known as mining. DOGE's circulating supply equals its total supply, indicating that all tokens are in the hands of users and the development team reserved none. Each year, 5 billion new DOGE tokens are created, giving the cryptocurrency an inflation rate of around 4 percent, a low figure compared to other inflationary currencies.
DOGE experienced tremendous popularity and was one of the most trending tokens during the 2021 bull run, cementing its position as one of the top digital assets of the year.
About the founders
Dogecoin was created by Billy Markus, an IBM software engineer, and Jackson Palmer, senior director of product management at Adobe.
Shiba dog memes had been around for a while, and the popular meme drew attention to the token. According to Palmer, the meme aided in the accessibility of cryptocurrencies at a time when Bitcoin was viewed as shady and linked to the dark web. Dogecoin sparked public interest in learning more about cryptocurrencies.
In 2015, Palmer left the cryptocurrency world and denounced the way people were making money from crypto.
The Dogecoin Foundation is a non-profit organization dedicated to promoting the use and development of the Dogecoin network. While the foundation was initially formed in 2014, it has since gone through several changes and periods of inactivity. In 2021, members of the Dogecoin community revived the foundation and began working on a range of initiatives aimed at improving the network's functionality and expanding its user base.
In 2021, they began working on a staking mechanism in partnership with Vitalik Buterin, one of the founders of the world's second-largest cryptocurrency by market capitalization, Ethereum.
The foundation has not officially worked with billionaire celebrity Elon Musk, but Musk's tweets and public statements about Dogecoin have helped to boost the coin's popularity and price. Some members of the Dogecoin community have expressed hope that Musk will become more directly involved with the foundation in the future.
Dogecoin and Elon Musk
Celebrity entrepreneur and billionaire Elon Musk has often publicly displayed his strong interest in and support for Dogecoin. Elon Musk, known to be an avid fan of memes, has endorsed the project several times, often sparking massive user interest and optimism, along with wild speculation. He usually takes to Twitter, where he has a sizable following, to express his positive views and hope for the meme coin.
The "Dogefather," as he is called, began showing his support for Dogecoin in late 2020 in a tweet and has continued to tweet and talk about Dogecoin ever since. Due to Musk's status and popularity, the price change of Dogecoin is usually significant (as much as a 100 percent spike in one case) whenever he mentions it.
Musk has not only expressed favorable views of the project but has even taken steps to promote it. For example, he heralded the acceptance of Dogecoin by Tesla, the world's largest automaker – a company he runs. Another one of his companies, SpaceX, also announced that they would be funding a rideshare mission to the moon entirely in Dogecoin, making the mission the first of its kind
On top of that, he crowdsourced ideas for the development of Dogecoin and even promised to work with Dogecoin's development team to improve the blockchain. His actions could also be said to have inspired other famous celebrities and influential people, such as Mark Cuban and Snoop Dogg, to support Dogecoin.
Musk's actions, however, have not been welcomed by all. He has often been accused of manipulating Dogecoin with his tweets, including by Jackson Palmer, the co-founder of Dogecoin, who left the project in 2015.
What is Dogecoin's GigaWallet project?
The Dogecoin team has often reiterated its commitment to ensuring that Dogecoin has utility beyond just being a popular meme. As such, they have embarked on several projects to improve the usefulness of the meme coin. One of these is Project GigaWallet, which aims to build an enterprise-grade service that merchants can easily integrate to accept and process Dogecoin transactions.
What is the Dogecoin Standard?
The Dogecoin Standard refers to the specifications and rules that define how the cryptocurrency operates, including its consensus algorithm, block time, mining reward, and other technical details. It is the foundation that allows the Dogecoin network to function as a decentralized and secure system for transferring value.
What Is Dogecoin's Libdogecoin?
Libdogecoin is an open-source software library that provides developers with the tools and resources they need to build decentralized finance (DeFi) applications and services that interact with the Dogecoin network, without the need for them to have extensive knowledge of how Dogecoin works. It is essentially a collection of programming code and libraries that simplify the process of building new software that utilizes the Dogecoin Standard. With Libdogecoin, developers can easily write code that interacts with the Dogecoin network, creating new applications that allow users to send and receive Dogecoin, manage their wallets, and interact with other users on the network.
DOGE adoption by Tesla, SpaceX, and the Dallas Mavericks
In January 2022, automaker Tesla began accepting DOGE payments for merchandise in its store, as announced a month earlier by CEO Elon Musk. The price of DOGE spiked 11 percent before the feature went live. Musk has also announced on Twitter that its supercharging station in Santa Monica will soon accept DOGE.
He has also announced that aerospace company SpaceX will begin accepting DOGE payments for their merchandise and will fund a mission to the moon called DOGE-1 with DOGE. Several notable companies, like AMC, have followed suit in their acceptance of Dogecoin.
Similarly, in March 2021, billionaire Mark Cuban announced that the popular NBA team, the Dallas Mavericks, would accept DOGE for ticket and product purchases. In just two days, the Mavericks carried out a record-breaking number of over 20,000 transactions in DOGE.
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