All About Crypto World

A Compete Guide To Dogecoin

That’s right, Dogecoin is a cryptocurrency based on one of the most famous memes of all time. Remarkably, its comedic nature hasn’t harmed its survival. It boats a dedicated community of users who have raised funds for a number of initiatives over the years.


The arrival of Bitcoin in 2009 opened the floodgates for digital currencies. Since its launch thousands of cryptocurrencies (or altcoins) have emerged to accommodate a vast range of use cases. A try to secure themselves as money, while others aim to fuel smart contract platform like Ethereum.

Among the earlier coins, Dogecoin is perhaps one of the most unique offerings. It has captivated cryptocurrency enthusiasts since 2014. And in this article, we’ll explain why.

A concise history of Dogecoin

Founding and launch

Dogecoin (DOGE) is an open-source peer-to-peer cryptocurrency stemming from a fork of the Litecoin codebase. As the name suggests, its largely based on the Doge meme that took the Web by storm in 2013. The original image depicts a dog of the Shiba Inu breed, whose inward monolog is shown in comic sans text font.

Billy Markus, a programmer from Oregon, initially came up with the idea for a sort of “joke” cryptocurrency. He reasoned that a more lighthearted coin would have a better chance of attracting mainstream attention than Bitcoin. Around a similar time Adobe’s Jackson Palmer expressed that he was “Investing in Dogecoin, almost certain it’s the next big thing” in a now-erased tweet.

Following some encouragement, Palmer proceeded to create When Markus stumbled across the website shortly after its launch, he reached out to Palmer to make it a reality and began work on what’s presently known as Dogecoin.

Upon launch, the cryptocurrency rapidly spread across social media. Within months, it hit a multi-million dollar market capitalization.

Community initiatives

The Dogecoin community has earned a reputation for charitable contributions. It took off as a tipping system on sites like Reddit, where users would send each other small amounts of Dogecoin to reward content creators.

This giving spirit was echoed in its more ambitious fundraisers: in 2014, it raised over $30,000 worth of Dogecoin for the Jamaican bobsled team to participate in the Sochi Winter Olympics. The team had qualified but couldn’t afford to get to Russia for the event.

In the same year, the community launched two other initiatives. Doge4Water raised another $30,000+ to drill wells in Kenya, and Dogecoin enthusiasts later sponsored NASCAR driver Josh Wise with over $50,000 in the cryptocurrency. As a result, Wise famously painted his car with the Dogecoin logo.

Tesla CEO Elon Musk has previously tweeted that Dogecoin might be one of his favorite cryptocurrencies. Following a community poll, he was jokingly declared the CEO of the coin.

The TikTok pump

In mid-2020, a viral video on the video-sharing application TikTok created a chain reaction, causing the DOGE price rise significantly. A user called for others to join him in purchasing Dogecoin, stating that they would all get rich by buying coins and selling them once the price hit $1. The hyped snowballed, causing Dogecoin to trade at over 2.5x what it had in the weeks earlier. However, the pump was short-lived , and prices began to sharply decline afterward.

Note that this kind of activity could be considered a pump and dump. This type of scheme is illegal in traditional markets due of the threats to investors. Promoters purchase large amounts of an asset before generating hype around it, causing others to FOMO into the investment. As a result, the price rises significantly (the pump). Then, promoters sell their holdings, leading the dump with such high sell pressure, the price plunges as later investors are left with huge losses. As usual, do your own research into prospective investments.

How does Dogecoin perform ?

Dogecoin is based on a fork of Litecoin (LTC) called Luckycoin. However, notable changes have since been made to the protocol. Let’s see how it works.


Similar to Bitcoin Dogecoin uses a blockchain, where blocks are appended via Proof-of-Work. Network participants install opensource software onto their machines so they can act as full nodes. For those unfamiliar with blockchain technology, this means that each participant maintains a full copy of the database “which contains all transactions”

The system is decentralized because there’s no administrator that controls it. Instead, users send information directly to each other and rely on cryptographic techniques to tell whether their peers are acting honestly.

Mining and supply

In Proof-of-Work blockchains like Bitcoin a process called mining is used to create new coins. Participants should demonstrate to the network that they’ve done “work,” which you can think of like revealing an answer to acomplex puzzle.

The puzzle is solved by hashing data until the user can provide a result that the network will accept as valid. An solution can’t be feasible produced by hand, so users instead dedicate electricity and computing power to try to find it.

One major difference among Bitcoin and Litecoin is that the last doesn’t use the SHA-256 hash function for mining. This was an internal decision Litecoin instead ralies on Scrypt, an ASIC-resistant Proof-of-Work algorithm.

In plain English, this means that the purpose built machines used to mine Bitcoin wouldn’t have the option to contend with standard PCs and GPUs that were used to mine Litecoin. In theory, this would result in a more decentralized mining landscape. Before long, however, Application-Specific Integrated Circuits for Scrypt emerged.

As a derivative of Litecoin, Dogecoin inherited the Scrypt algorithm. To avoid any competition and to mitigate security risks, though, Dogecoin developers switched to a merged mining model, meaning that Litecoin miners could simultaneously earn Dogecoin. For an analysis of this, check out Binance Research’s Merged Mining in Dogecoin & Litecoin case study.

Dogecoin mining targets a one-minute block time and yields a block reward of 10,000 DOGE. There’s no maximum supply of units, and over130 billion are already in circulation. Enthusiasts view the removal of any limit as a good choice, as it incentivizes the spending of the coin and prevents early adopters from profiting disproportionately.

What can you do with Dogecoin?

Like many other cryptocurrencies, there are multiple ways you can acquire Dogecoin. You could mine it yourself, or accept it as payment for goods and services. The easiest method However, is to purchase it via a cryptocurrency exchange. Typically, you’ll initially have to purchase Bitcoin or one more famous coin then trade it for DOGE.

Once you have got your Dogecoin, you can use it as you would any cryptocurrency hold it for the longterm on a hardware wallet, trade it against other coins exchange it for goods, or tip others with it.

Closing thoughts

Despite being an asset whose existence revolves around an Internet meme, Dogecoin has developed a dedicated community of users. Many years later, Dogecoin managed to remain among one of the top cryptocurrencies by market cap.

It’s not entirely clear whether the market values Dogecoin as a novelty currency, a viable financial asset, or something in between. But few cryptocurrencies have had the impact that the Shiba Inu currency has – if only for its status as a meme coin.


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