Dogecoin (DOGE): Origin and Structure of the Fun and Friendly Cryptocurrency
Dogecoin’s success within internet culture has served as a conduit to other crypto initiatives, having been created as a parody of cryptocurrency and based on a joke.
Dogecoin (DOGE) began as a mockery of cryptocurrencies, namely the abundance of altcoins. DOGE’s creators have publicly declared that the currency is a joke, and it hasn’t had a substantial technological update since 2015. Despite these facts, cryptocurrency has survived due to market forces.
It was never about the value of DOGE, according to the founders, but rather about providing people with an approachable introduction to the world of cryptocurrencies through a face that many already recognized from an online meme – Doge.
The founders aimed to eliminate the hurdles to access that Bitcoin and other cryptocurrencies face, such as news of hacks and frauds, as well as technological complexity.
To that purpose, they devised a playful coin to welcome beginners to the cryptocurrency world.
Dogecoin (DOGE) was forked from Litecoin in 2013. Billy Markus and Jackson Palmer, the coin’s inventors, theorized that by capitalizing on a popular online joke, Dogecoin would be able to reach a wider audience than Bitcoin. It was also meant to be a satire of the plethora of altcoins that were flooding the bitcoin market at the time.
Dogecoin is named after a popular internet meme called “Doge.” The meme includes a Shiba Inu — yep, the Japanese dog breed — with scattered text shown in Comic Sans font and intentionally written in bad English. Pseudonyms like “such wow,” “very shock,” and “so astound” are frequently used in the text (written in the dog’s voice).
Most altcoins’ only competitive advantage over Bitcoin is usually some kind of unique structural advantage (usually of a technical nature) in an area where Bitcoin is seen to have a constraint. The majority of altcoins only gain momentum when they have a defined use case.
With Dogecoin, however, this is not the case. Its popularity and value are solely based on an online inside joke, making it a unique cryptocurrency.
Despite the jokes, Dogecoin has garnered a sizable internet following.
Dogecoin was increasingly bought and sold in online crypto marketplaces by people wishing to add an unusual currency to their crypto portfolios, presenting itself as the “fun and friendly” cryptocurrency.
It became a popular way of tipping online content creators as well. It grew at a breakneck pace in the months following its launch, temporarily surpassing the aggregate trading volume of all other cryptocurrencies (including Bitcoin) in January 2014.
Dogecoin continues to defy the odds by achieving a billion-dollar market cap without a whitepaper or any practical use cases, reinforcing its parochial status in the cryptocurrency ecosystem.
Market volatility is a feature of cryptocurrencies in general. Dogecoin is no stranger to volatility, and due to how much its performance is influenced by social media, it may endure even more than its fair share (a potentially volatile structure in its own right).
Elon Musk, for example, declared on Twitter in April 2019 that Dogecoin “maybe my favorite cryptocurrency.” It’s a lot of fun.”
The price of the cryptocurrency skyrocketed as a result of the announcement. Similarly, the price of Dogecoin increased by about 200 percent between May and July 2020 (from $.001571 to $.004398) due to a push from users on the social media platform TikTok to push the DOGE price to $1.
The Structure of DOGE
Dogecoin is a scrypt-based cryptocurrency that is developed on top of the Litecoin blockchain.
The Litecoin protocol employs the Scrypt mining algorithm. It’s not the same as the Bitcoin protocol’s SHA-256 mining method. It does, however, use a Proof-of-Work (PoW) consensus process for mining and validating new blocks on the network, similar to Bitcoin’s SHA-256.
DOGE is an inflationary coin, which means that the number of DOGE coins that may be mined is unlimited.
Despite the absence of continuing Dogecoin technical development, it has a one-minute block time, which contributes to its significant market capitalization. Dogecoin, in fact, hasn’t had a significant update since 2015.