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Dogecoin (DOGE)

What Is Dogecoin and How Does It Work?

DOGE (Dogecoin) is an open-source, peer-to-peer cryptocurrency. It’s classified as an altcoin and a snarky meme coin. The Shiba Inu dog serves as the logo for Dogecoin, which was launched in December 2013.

Despite the fact that it was created as a joke, Dogecoin’s blockchain still retains value. The technology that underpins it is based on Litecoin. The low price and limitless supply of Dogecoin, which uses the scrypt algorithm, are notable aspects.

Getting to Know Dogecoin

Dogecoin’s Background

First and foremost

Dogecoin was founded in 2013 by Jackson Palmer, a product manager at Adobe Inc. in Sydney, Australia, as a way to mock the frenzy around cryptocurrencies. Palmer has been dubbed a “skeptic-analytic” observer of emerging technologies, and his earliest tweets about his new cryptocurrency venture were mocking. He purchased the domain after receiving great feedback on social media.

Meanwhile, Billy Markus, an IBM software developer who wanted to create a digital currency but was having problems advertising his efforts, discovered the Dogecoin buzz in Portland, Oregon. Markus contacted Palmer to request permission to develop the software that would power a real Dogecoin.

Markus built Dogecoin’s code on Luckycoin, which is developed from Litecoin, and had a randomized reward system for block mining until March 2014, when it was switched to a static payout system. Dogecoin is a Proof-of-Work (PoW) coin that employs Litecoin’s scrypt algorithm.

Many cryptocurrencies are based on Proof of Work (PoW), which allows for safe, decentralized consensus.

On December 6, 2013, Palmer and Markus introduced the coin. Dogecoin’s value increased 300 percent two weeks later, on Dec. 19, possibly as a result of China prohibiting its banks from investing in cryptocurrency.

Dogecoin’s Ascension

With a Shibu Inu (Japanese dog) as its emblem, Dogecoin advertised itself as a “fun” alternative of Bitcoin. Dogecoin’s laid-back presentation suited the emerging crypto community’s vibe. Its scrypt technology and limitless supply were used to argue for a speedier, more adaptive, and consumer-friendly Bitcoin.

Dogecoin is a “inflationary coin,” whereas Bitcoin and other cryptocurrencies are deflationary due to a limit on the amount of coins that may be minted. The amount of Bitcoin released into circulation via mining incentives is halved every four years, and the inflation rate is also halved, until all coins are issued.

The Dogecoin community donated 27 million Dogecoins, or about $30,000, in January 2014 to help pay the Jamaican bobsled team’s trip to the Sochi Winter Olympic Games.

The Dogecoin community gave $11,000 worth of Dogecoin to build a well in Kenya in March of that year, and $55,000 worth of Dogecoin to sponsor NASCAR driver Josh Wise.

Dogecoin had a market capitalization of $20 million and a devoted following before its first birthday.

Dogecoin Gets a Kick Out of Controversy

In 2015, Dogecoin’s carefree joy began to lose some of its merriment as the crypto community as a whole became increasingly serious. The resignation of Jackson Palmer, who claimed that a “toxic environment” had sprung up around the coin and the money it was earning, was the first indicator that all was not well in the Dogecoin community.

Alex Green, a.k.a. Ryan Kennedy, a British citizen who founded the Moolah Dogecoin exchange, was one of the members of that toxic community. Alex Green (his alias) was renowned in the neighborhood as a generous tipper who allegedly paid $15,000 to the NASCAR fundraiser instead of $1,500. 9

Green’s exchange persuaded members of the community to donate substantial sums to assist support the establishment of his exchange, but it was later revealed that he had used the funds to purchase more than $1.5 million in Bitcoin, which he used to fund a lavish lifestyle. Kennedy was found guilty of multiple counts of rape in 2016 and sentenced to 11 years in prison.

Dogecoin During and After the 2017-2019 Crypto Bubble

Dogecoin’s value soared together with the rest of the cryptoverse during the end-of-2017 bubble, and then collapsed along with the rest of the cryptoverse in 2018.

During the cryto bull run of 2017/18, Dogecoin’s market capitalisation topped $1 billion for the first time.
In the summer of 2019, Dogecoin, like the rest of the crypto market, saw another increase in value. Dogecoin supporters were overjoyed when Binance listed the cryptocurrency, and many believed Tesla, Inc. (TSLA) CEO Elon Musk had backed the coin in a cryptic tweet.

Dogecoin in the Twenty-First Century

The infrastructure of Dogecoin has not been a major priority for the coin’s developers, who are still volunteers. However, its lively community of miners is one reason it continues to operate and trade. As CryptoIQ’s Zachary Mashiach puts it:

Dogecoin (DOGE) is still preferred by many Scrypt miners over other Scrypt PoW cryptocurrencies. The hash rate of Dogecoin (DOGE) is approximately 150 TH/s. This is somewhat lower than the 170 TH/s hash rate for Litecoin (LTC), owing to the fact that Dogecoin (DOGE) can be merge mined with Litecoin (LTC), allowing miners to mine both cryptos at the same time. Essentially, almost everyone who mines Litecoin (LTC) also chooses to mine Dogecoin (DOGE) since merging the two boosts profitability.

In 2021, Musk has remained a strong supporter of Dogecoin, tweeting in May that he was working with the coin’s developers to increase transaction efficiency. The SpaceX creator even conducted a social media poll earlier this year, asking if Tesla should accept Dogecoin as a means of payment. AMC Entertainment Holdings, Inc. (AMC) announced in October that it would accept Dogecoin for digital gift card purchases by the end of the year, giving the meme-based cryptocurrency even more utility.

Dogecoin’s market cap ranking was 10 as of Oct. 8, 2021, with a market capitalization of $31.9 billion, significantly higher over its year-ago position of 48 and market value of $339 million.
Dogecoin began as a joke, but it quickly grew in popularity after its launch. By late 2017, it had become a participant in the cryptocurrency bubble, which saw the value of numerous coins skyrocket. 1 Dogecoin’s value plummeted when the bubble broke in 2018, but it still maintains a following of traders and users who use it to tip content on Twitter and Reddit. 2

On digital currency exchanges, users can purchase and sell Dogecoin. They have the option of storing their Dogecoin on an exchange or in a wallet.

What do you think?

Written by Winston Williams

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