What is Dogecoin (DOGE)? | Dogecoin Explained for Crypto Beginners

what is dogecoin

What is Dogecoin?

Dogecoin (DOGE) launched in 2013 by software developers Billy Markus and Jackson Palmer who met online through the online forum, Reddit. Palmer, a product manager working for Adobe at the time, wanted to create a satire around the hype that crypto was getting. So Dogecoin was created as a joke, knowing they had the skills to create their own fully functioning cryptocurrency. They created it with its own blockchain and mining process based off the Litecoin network. Within two weeks of launching Dogecoin, the value had increased by 300%.

How Dogecoin Started

Now that we’ve answered the question of “what is Dogecoin”, let’s look at how it started.

Markus based Dogecoin’s code on the now defunct coin, Luckycoin, a Litecoin fork. Dogecoin used the copied code, a Scrypt-based consensus algorithm, to initially randomize mining rewards. They later changed to a static reward in 2014. Dogecoin launched with a total supply capped at 100 billion, but not long after the developers removed the cap, transforming it into an inflationary coin. There is now no limit on the total max supply of coins. Over time, this unlimited supply of DOGE would disincentivize miners from securing the Dogecoin blockchain. In 2014 the mining process was integrated with Litecoin’s, allowing Litecoin miners to also mine Dogecoin with no additional work required at all.

The Dogecoin Founders

With the co-founders having met in the Reddit forums, it became the perfect place for Dogecoin’s peer-to-peer trading. It was most often used for online tipping over social platforms such as Reddit, where it was exchanged between users and content creators. However, not all was good in the Dogecoin camp, with Markus selling his coins in 2015, announcing he was no longer associated with the project. Palmer followed much later in 2021, with a scathing Twitter thread announcing he had departed crypto altogether. It is still unclear now if there are any Dogecoin developers and who they are, as it’s not something they disclose.

Where’s Dogecoin now?

dogecoin

Elon Musk showed support for Dogecoin in 2021 with a series of tweets and price peaking at around $0.74 shortly after he hosted the TV show ‘Saturday Night Live’ (SNL) in the US on May 8th. Elon supports the coin due to the fast transaction speeds, believing that it’s going to be a better option for a payments system than Bitcoin. A concerning factor for cryptocurrency is that 100 Dogecoin wallets currently own 65% of the total coins in circulation, meaning that these whales can facilitate pumps and dumps. Markus resurfaced at the end of 2021, announcing he bought Dogecoin for the first time in almost 8 years, having bought 221,000 DOGE. Musk announced at the beginning of 2022 that Tesla has accepted DOGE as payment for their merchandise, excluding the vehicles. 

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