Dogecoin (DOGE) is a peer-to-peer cryptocurrency. Like other digital currencies, DOGE allows users to send money from point A to point B without the need for a middleman. While the coin sounds like any other altcoin on the surface, it has since become an icon backed by a meme-centric community. The community has continued to support the coin since its creation in December 2013, with the image of the Shiba Inu dog paving the way.
The interesting thing about this coin is that, unlike Bitcoin, it didn’t have a compelling purpose, such as empowering the masses with their own financial freedom. Quite the opposite was true. The coin had no mission and was instead founded as a joke with no intention for Dogecoin ever to take off.
Since then, the coin has taken on a new mission: spread goodwill throughout the cryptocurrency community. The rise in popularity has even compelled more serious investors to purchase the coin as a part of their long-term holding strategy. But, where did all of this start?
The rise of Dogecoin can be attributed to a man named Jackson Palmer. Jackson was a product manager at Adobe Inc. in Sydney, Australia. Poking fun at the hype around other cryptocurrencies, Jackson jokingly introduced the concept of the Dogecoin. However, as irony would have it, the coin might just have a future as the next massively adopted cryptocurrency. The buzz around Dogecoin caught the eyes of many, including Billy Markus, a software developer at IBM. While Jackson had no intention of creating a cryptocurrency, Markus did. In fact, he was currently facing the opposite problem. He wanted to create a digital currency but couldn’t build up the attention he needed to launch his own. Hearing news of Dogecoin, Billy Markus reached out to Palmer on Twitter. In his message, he asked for permission to build the back end for the Dogecoin.
Allegedly, even before Jackson Palmer responded to his Twitter outreach, Billy began to reconfigure the publicly available Bitcoin code. It was shortly after that that Jackson Palmer agreed to an official partnership. The coin’s release was met with a level of success, including positive feedback on social media. To make things official, Jackson Palmer purchased the domain dogecoin.com.
Billy Markus stated that due to the similarities between Dogecoin and Bitcoin, it took him only three hours to create the coin by hitting “control f” to replace the terms “Bitcoin” with “Dogecoin.” While the coin is conceptually very similar to Bitcoin, you might read that Dogecoin was based on the cryptocurrency Luckycoin. Both statements are factual. Dogecoin is based on Luckycoin, a hard fork of Litecoin, which happens to be a hard fork of Bitcoin. The moral of the story is, all the coins share many similarities in their backend configuration.
Similar to Bitcoin, Dogecoin uses the Proof of Work (PoW) consensus algorithm. PoW means the network relies on miners to validate Dogecoin transactions and secure the network from parties trying to manipulate the blockchain. Litecoin, Luckycoin and Dogecoin also share the similarity that they all use the script algorithm to facilitate lower hash rates and require less energy than bitcoin’s SHA-0256 algorithm. This algorithm allows users to mine Dogecoin using ASIC and FPGA devices. Therefore, a high-powered Bitcoin mining setup is not required.
Taken together, Dogecoin follows a similar background and isn’t overly innovative from a technological perspective. The coin is rather basic in functionality and does not offer features such as staking or smart contracts, which are now common on the Ethereum platform. As is true with other coins released in this time period, the focus was on creating a secure network, which Dogecoin does provide.
The only major changes that can be identified come down to supply. While Bitcoin is deflationary and will only ever have a limited supply, Dogecoin has no limit to how many coins can be produced. Other minor changes included the name change from “mining” to “digging” in the Dogecoin network and reducing the block time to one minute. As a recap, block time is how long it takes to add a new block of transactions to the existing chain.
Despite only having minor differences from its predecessors, the coin has managed to rally quite the meme culture. Here’s where it all started.
Doge is a dog meme that gained popularity back in 2013. The meme was an image of a Japanese dog known as a Shiba Inu (pictured above). The meme includes the dog making a non-dog-like face and surrounded with speech written in Comic Sans font. The iconic words included in this meme are just phrases written in broken English. An example, in reference to mornings, the Doge meme included text like “such awake,” “wow,” “much mornings,” “many sunshine,” and “so cereal.” The meme didn’t stop at mornings. The iconic Doge is now used to describe anything from jokes about naps, diets and even the Olympic games. As a result, Doge was named the Meme of the Year in 2013 and continues to be passed around even today.
While Doge has lost some popularity since her debut, the meme is still recognized as one of the most iconic internet phenomena of all time, coined forever in its own cryptocurrency (pun intended). The iconic Doge, became the only fitting mascot for the cryptocurrency and its community.
The Dogecoin community got its start after an explosion on Reddit, which may have contributed to the market value of $8 million in 2013. Popularity arose from the Internet practice of “tipping.” Consider how you may provide a tip at a restaurant to a kind server. In a similar manner, Internet tipping became a way of paying people for good deeds performed on the web. Some examples of when a tip may be issued are if a team made an online platform accessible or if someone helped to promote your latest business idea. Rather than giving the news a “thumbs up,” users could leave their appreciation with something of monetary value.
Leading this tipping trend was Dogecoin, which became the second most tipped currency shortly after its launch. The currency continued to gain traction due to its low entry barriers, allowing any newcomer to easily explore the world of cryptocurrency.
The new Dogecoin team launched their coin on December 6, 2013. Just two weeks after the initial launch, the coin jumped 300%. Some attribute this price increase to China forbidding its banks from investing in cryptocurrencies.
The initial Dogecoin rally only lasted about three days before the price of Dogecoin retraced 80%. A couple of days later, a hacker stole millions of dollars from Dogecoin from Dogewallet, the platform’s native wallet. This was later determined to be the work of a hacker who modified the wallet’s send and receive page to send Dogecoin to their own address. Rather than let the Dogecoin project end here, the meme community stepped in with a donation campaign by the name of “SaveDogemas” to help replace the stolen coins. The Dogecoin community proved to be so powerful that all the lost coins were replaced within the campaign. The community continued to get behind other causes, starting fundraising campaigns for the Jamaican bobsled team, in which they raised $25,000, a campaign for clean water in Kenya and another one to train assistance dogs for autistic children.
Although all of these campaigns were met with a measure of success, Dogecoin engineers still shared no plans to compete with Bitcoin. Even without competing, in January 2014, the Dogecoin trading volume did surpass Bitcoin for a brief moment.
Dogecoin later gained credibility, as the coin was listed on the exchange Moolah thanks to a Reddit user named Alex Green. A few years later, in 2017, Dogecoin reached a new all-time high of $0.017 along with the crypto bubble that sent many other altcoins to increase in price.
Approximately one year after Dogecoin made trading history, Jackson Palmer decided it was time to take an “extended leave of absence” from the company after feeling that the community had “turned toxic.” But this wasn’t the end of the Dogecoin community or its active followers on Reddit. In the following years, the subreddit, SatoshiStreetBets, shared their message to send the coin “to the moon,” AKA to $1 per coin. This community quickly gained the support of the Tesla CEO, Elon Musk. As the world’s richest man and iconic social media user, Musk has a history of influencing the masses with his social media platforms. Although Musk announced that he would stay off Twitter for a while, he broke that silence to tweet about a few things, Dogecoin included.
Among the most notable tweets were,
“Dogecoin is the people’s crypto” – February 4, 2021
“No highs, no lows, only Doge” – February 4, 2021
These tweets proved to be massively powerful, pumping up Dogecoin’s price and greatly moving financial markets. This same meme-centric community was able to drive the share price of video game retailer GameStop from US$20 to over US $350 in just a few short days. Similar events occurred when Musk changed his Twitter biography to include “#bitcoin,” causing prices to hit a new high of $38,000 the following morning.
Why invest in Dogecoin? As evidence from the efforts of a Reddit community, memes move markets. The combination of these events, largely driven by Elon Musk, raised each Dogecoin’s value to $0.052, tripling its value in only one day. That said, the coin still has a long way to go before “it reaches the moon.” However, Dogecoin’s meme-fuelled rally does prove the power of passionate online communities as the coin did join the top ten most valuable cryptocurrencies. Increased attention on this memecoin has caused developers to revisit the Dogecoin software with future plans for upgrades.
The coin can also be used for secure money transfers anywhere in the world in a very similar way to Bitcoin. As the network has grown, more vendors, including the Latvian airline, airBaltic, have begun to accept the cryptocurrency as well.
Currently, it is completely legal for Canadian citizens to hold, mine, and trade Dogecoins. Therefore, those looking to join this meme community really have nothing holding them back. The currency is still gaining traction, and although not found on as many exchanges as Bitcoin or Ethereum, it is still easy to purchase.
Users can leverage an online cryptocurrency exchange like Bitbuy to buy currencies that are available in trading pairs with Dogecoin. Some of the most common pairs are Bitcoin/Dogecoin and Ethereum/Dogecoin. Bitbuy is easy to use and will require users to set up an account with a username and password and answer a couple of basic questions as a part of Know Your Customer (KYC) compliance. From there, users have to select one of the funding methods such as an Interac eTransfer or bank wire to load their accounts with funds. After purchasing Bitcoin on Bitbuy, users can use their Bitcoin address to send coins to the platform, Binance.
On Binance, users will follow a few similar steps as when buying Bitcoin. Once this account is set up, users can trade BTC for DOGE. Although this process is currently multi-step, it is one of the simplest ways to buy DOGE in Canada. That said, Bitbuy platform has suggested that they may begin offering Dogecoin as a direct listing for customers in the near future.
News of Canadian exchanges offering direct pairings with Dogecoin suggests it might just be time to join the DOGE game. After all, if other Canadian platforms begin offering DOGE, the price might take off, giving it appeal to both investors who want to hold on for dear life (HODL) and those who just want to participate in the meme culture.
Buying the coin is only the beginning. To invest for the long haul, users must continue to keep assets safe in a digital wallet. The Jaxx wallet is one of the most highly recommended ways to store Dogecoin and is available to both Apple and Android users at no cost. However, wallets can take a few forms, including software, hardware or even a piece of paper. Storing any cryptocurrency, Dogecoin included, will require users to understand their goals as an investor and successfully identify a wallet that will support their currency of choice. For those planning to hold the coin for a long time, hardware or paper wallets are the safest choices since they keep a user’s coins offline. Currently, the Ledger Nano S and Ledger Nano X both support DOGE.
Dogecoin has had a remarkable journey so far, from being a currency for tipping to donating thousands to worthwhile causes to becoming an icon in meme culture. The next Dogecoin rally may be on the horizon. Although some still consider this coin a risky investment, rest assured that a powerful community will be there to catch you if it falls.