Dogecoin Explained By A Basement Dweller
11Dogecoin Explained By A Basement Dweller
Dogecoin (/ˈdoʊʒkɔɪn/ DOHZH-koyn or DOHJ-koyn,[2] code: DOGE, symbol: Ð) is a cryptocurrency invented by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system that is instant, fun, and free from traditional banking fees. Dogecoin features the face of the Shiba Inu dog from the "Doge" meme as its logo and namesake.[3][4][5] It was introduced on December 6, 2013, and quickly developed its own online community, reaching a market capitalization of US $70,355,561,773 on April 16, 2021.[6][7]
History
Dogecoin was co-founded by IBM software engineer Billy Markus from Portland, Oregon and Adobe software engineer Jackson Palmer, who set out to create a peer-to-peer digital currency that could reach a broader demographic than Bitcoin. In addition, they wanted to distance it from the controversial history of other coins.[8] Dogecoin was officially launched on December 6, 2013, and within the first 30 days there were over a million visitors to Dogecoin.com.[9]
At the time, Palmer was a member of the Adobe Systems Marketing Department in Sydney and is credited with making the idea a reality.[10] Palmer had purchased the domain Dogecoin.com and added a splash screen, which featured the coin's logo and scattered Comic Sans text. Markus reached out to Palmer after seeing the site, and started efforts to develop the currency. Markus had designed Dogecoin's protocol based on existing cryptocurrencies, Luckycoin and Litecoin,[11] which use scrypt technology in their proof-of-work algorithm.[12] The use of scrypt means that miners cannot use SHA-256 bitcoin mining equipment, and instead must use dedicated FPGA and ASIC devices for mining which are known to be more complex to produce.[13][14]
On December 19, 2013, Dogecoin jumped nearly 300 percent in value in 72 hours, rising from US$0.00026 to $0.00095,[15] with a volume of billions of Dogecoins per day. This growth occurred during a time when Bitcoin and many other cryptocurrencies were reeling from China's decision to forbid Chinese banks from investing into the Bitcoin economy.[11] Three days later, Dogecoin experienced its first major crash by dropping by 80% due to this event and to large mining pools exploiting the small amount of computing power required at the time to mine Dogecoin.[16]
On December 25, 2013, the first major theft of Dogecoin occurred when millions of coins were stolen during a hack on the online cryptocurrency wallet platform Dogewallet.[17] The hacker gained access to the platform's filesystem and modified its send/receive page to send any and all coins to a static address.[18][19] This hacking incident spiked tweets about Dogecoin, making it the most mentioned altcoin on Twitter at the time, although it was in reference to a negative event. To help those who lost funds on Dogewallet after its breach, the Dogecoin community started an initiative named "SaveDogemas" to help donate coins to those who had them stolen. Approximately one month later, enough money was donated to cover all of the coins that were stolen.[20]
In January 2014, the trading volume of Dogecoin briefly surpassed that of Bitcoin and all other crypto-currencies combined, however, its market capitalization remained substantially behind that of Bitcoin. Initially, Dogecoin featured a randomized reward that is received for each mining block, however, in March 2014 this behaviour was later updated to a static block reward.
In April 2015, Jackson Palmer announced he is taking an "extended leave of absence" from the cryptocurrency community.[21][22]
During 2017 to early 2018 cryptocurrency bubble, Dogecoin briefly reached a peak of $0.017/coin on January 7, 2018, putting its total market capitalization near USD 2 billion.
In July 2020, the price of Dogecoin spiked following a TikTok trend aiming to get the coin's price to $1.[23]
In January 2021, Dogecoin went up over 800% in 24 hours, attaining a price of $0.07, as a result of attention from Reddit users, partially encouraged by Elon Musk and the GameStop short squeeze.[24] In February 2021, Dogecoin hit its all-time-high price of $0.08 following Twitter encouragement from Musk, Snoop Dogg and Gene Simmons.[25] In March 2021, Dallas Mavericks owner Mark Cuban announced his NBA team would allow purchasing tickets and products with Dogecoin; within two days, Cuban had declared his franchise had become the top Dogecoin merchant, having carried out 20,000 transactions.[26]