Dogecoin: A Joke That Became A Promising Cryptocurrency
There have been a lot of anecdotes in the tech industry where small non-serious experiments have turned out to be great inventions. But not many would believe that jokes or mocks can too lead to something amazing and promising. That’s the story of Dogecoin– one of the coins that have shown promise to stay.
A brief history of the coin tells us that Dogecoin was initially created as the result of a joke made by Jackson Palmer in November 2013. Following this joke is when programmer Billy Markus contacted Palmer, they decided to turn Dogecoin into a reality. While putting together Dogecoin, Palmer and Markus envisioned to design this coin to be a friendly, more approachable form of cryptocurrency that could reach every user across the globe and eventually would take over users that put off by the cold complexity of Bitcoin.
The Dogecoin community in its process of growing went on to become one of the most active communities and went on to frequently raise funds for charitable causes – from the 2014 Winter Olympics to NASCAR. In 2014, Dogecoin also goes its first ATM, with a launch in Vancouver.
All went well till 2015 (at least we assume it to be) before Jackson Palmer announced he is taking an “extended leave of absence” from the cryptocurrency community. Calling the ecosystem “toxic”, Palmer used the occasion to blast aspects of the industry, while encouraging users of dogecoin not to lose sight of its fun and playful roots.
What is Dogecoin
Dogecoin is a cryptocurrency based on or you may say forked out of Luckycoin (which is, in turn, based on Litecoin). Dogecoin was originally designed to be a more approachable alternative to Bitcoin, Litecoin and other cryptocurrencies. Apart from the vision to be a common and user-friendly cryptocurrency there aren’t any groundbreaking features that set Dogecoin apart from the pack.
The coin’s development has remained stagnant and hasn’t seen any changes or updates since Jackson Palmer left in 2015, but has significantly benefited from improvements to the Litecoin code.
While the development has not been a differentiator for the coin, what actually sets it apart and adds value to Dogecoin is the strong, lively, vibrant and the most active community which has sprung up around it and has kept the fire of Dogecoin alive.
Dogecoin Inflationary Characteristics
Code wise, Dogecoin may not differ much from others but characteristically, Dogecoin does separate itself from most other cryptocurrencies. The coin is an inflationary one, rather than deflationary a cryptocurrency. Bitcoin and many other cryptocurrencies are designed with a hard supply cap of coins. The potential problem with this is that once the cap is reached it may no longer be profitable for miners to continue to sustain the system. This would either lead to unacceptably high fees in order to encourage miners or very long transaction times as there would be no incentive to process network transactions.
Dogecoin’s creator, being late entrants in the game, sought out to solve this problem by ensuring that miners would always be rewarded with new Dogecoin and so there would always be an incentive to mine more coins. An inflation-based approach was also designed to replace lost coins and keep Dogecoin at a stable 100 billion coins.
To give an idea about Dogecoin being inflationary Jackson Palmer wrote in 2014:
“The goal for the currency is to keep approximately 100 billion coins in circulation – thus after 100 billion Dogecoins are created, rewards will continue at 10k each block. This will help maintain mining and stabilize the number of coins in circulation (considering lost wallets and various other ways coins may be destroyed) at 100 billion.”
Dogecoin Mining Differentiators
The main reason that so many users mine this particular cryptocurrency is that it does not need a powerful computer. Any personal computer easily turns into a getter of treasured coins. For most miners, calculating one block takes about three minutes. The process of mining itself is no different from the production of other cryptocurrencies. To get started, a miner just needs to have a Dogecoin wallet and install special software. It is recommended to download it from trusted sites – this way they can protect not only the computers but also the wallet itself.
Dogecoin Use Cases
Dogecoin has caught peoples interest because, of its whole history and journey of being meant to be satirical and just for fun coin to becoming an important mainstay in the cryptocurrency world. Because of this popularity, people have been using Dogecoin for a variety of reasons.
- As Dogecoin has incredibly low transaction fees and fast transaction times, as well as relatively stable value, some traders are using it as a means of exchange. For example, if someone wants to withdraw money from a cryptocurrency exchange, it may be very expensive to do so if the currency is in bitcoin. Therefore, some traders may choose to first trade their bitcoin for Dogecoin and then withdraw their currency as Dogecoin before later converting again into something else.
- As the price of each unit of Dogecoin is so low, a lot of people use it purely for speculation. It’s possible to purchase many millions of units without spending a fortune, and any small price increase can lead to reasonable market gains.
- Dogecoin is also very widely accepted at almost every major exchange as well as several instant exchange services such as Shapeshift and Flyp.me. Because Dogecoin is integrated into Shapeshift, it can be used to pay for a wide variety of services and goods that have the Shapeshift API built-in.
What Drives the Dogecoin Prices? | Dogecoin Review
Even after being relatively stable, Dogecoin has been highly volatile and prone to large surges and big dips in its own ways. Dogecoin, in particular, has experienced a fairly turbulent history and is prone to quite abrupt price changes.
Over the past three months, the coin has seen a rise of nearly 20% which is a mixture of its fundamental and technical indicators. Its mining efficiency, greater intrinsic value, lower price are al fundamental components that make Dogecoin interesting.
Why Dogecoin Can Rise in the Future?
Inflationary Currency: It may seem counterintuitive to call inflation a good thing as it makes individual DOGE worth less than if there was scarcity; however, it is a feature that may well ensure Dogecoin’s survival into the future. A large number of coins can be lost or damaged as a result of users losing hardware, forgetting wallet passwords, etc. This is especially true for a cryptocurrency, like Dogecoin, where users regularly spend their coins. An inflationary coin can help ensure a constant supply and that mining will also be at least semi-profitable.
Strong Community: Dogecoin without any doubt has one of the best communities out there in the crypto world. They have also raised money for charities, are trying to put a physical Dogecoin on the moon and regularly send Dogecoin as tips to other users as a reward for entertaining or informative content making them approachable, friendly and helpful. This community is what has allowed Dogecoin to survive this long and it means that the cryptocurrency is unlikely to die anytime soon, so you are unlikely to ever lose your entire investment.
1 Doge will always be 1 Doge: A common refrain among the Dogecoin community is that no matter what the price increases to in dollar terms, 1 DOGE will always be equal to 1 DOGE. In essence, they are saying that they want to use the coin as a transactional currency, rather than a speculative asset. This is actually a very good thing from a trader’s point of view. It means that even though Dogecoin might not have cutting-edge technology behind it, it is being treated as a proper currency by many users which means that it has a utility purpose.
In case, you have decided to buy the Dogecoin, then you should have a look at our guide on – where and how to buy the Dogecoin.
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Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.