By Natalie Lord
Last week we looked at the crème de la crème of the cryptocurrencies by user preference; those coins being Bitcoin, Bitcoin Cash and Litecoin. In this article we look at Dogecoin, and next week we move to explore Ethereum and BAT.
Dogecoin is recognised largely by the image of a Shina Inu dog which is derived from the “Doge” internet meme. It was initially introduced as a “joke” currency in December 2013 and quickly developed a considerable following. By January 2014 it had reached a market capitalisation of US$60 million, and four years later in 2018 it’s market cap was at US$2 billion.
Dogecoin was created by Billy Markus, a programmer from Portland, Oregon. He hoped to create a fun cryptocurrency that would reach a broader demographic than Bitcoin. Markus joined forces with Jackson Palmer, who was a member of Adobe Systems marketing department in Sydney, Australia to bring Dogecoin to market.
What makes Dogecoin different in the world of cryptocurrencies is that there is no limit on the number of coins that can be produced which makes it an inflationary coin. Originally, Dogecoin was to have a limit of 100 billion coins, which would already have been a far higher cap than counterpart cryptocurrencies were permitting. But that limit was removed at the start of 2014, with the intention being that it would produce a constant reduction of its inflation rate over time.
By the middle of 2015, there were 100 billion Dogecoins in circulation, with a further 5.256 billion coins produced every year thereafter. Where it lacks mainstream commercial application, Dogecoins have gained momentum in the internet tipping system, where users of social media grant Dogecoin tips to other users for providing noteworthy or interesting content.
Several online exchanges offer DOGE/BTC or DOGE/LTC trading, but Dogecoins are also used for trading physical items on online communities like Twitter and Reddit. To date, Dogecoins have been used to try to sell a house as well as in the poker and pornography industries.
Dogecoin is also viewed as a philanthropic choice of coin, having raised money for a plethora of good causes. In 2014, a fundraiser by the Dogecoin community raised US$50,000 for the Jamaican Bobsled Team, which had qualified for the Sochi Winter Olympics but couldn’t afford to go. On day two of the fundraiser US$36,000 had already been raised and the Dogecoin/Bitcoin exchange rate rose by 50%. Meanwhile, the Dogecoin Foundation raised funds to build a well in the Tana river basin in Kenya. A further 67.8 million Dogecoins, equivalent to about US$55,000 at the time, was also raised to sponsor NASCAR driver Josh Wise.
However, it hasn’t always been plain-sailing for Dogecoin. At the end of 2013, a theft of millions of Dogecoins took place during an online hack of cryptocurrency wallet Dogewallet. The hacker manipulated the system to send and receive all Dogecoins to a static address. Not a community to be easily deflated, a campaign called “SaveDogemas” was set up, and within about a month enough money had been donated to cover the sum of all the coins that had been stolen.
As of October 2019, Dogecoin sits in 28th position in the cryptocurrency ranking with a market capitalisation of US$335.8 million and a turnover of approximately US$41 million.