What is Dogecoin?
Dogecoin, also known as DOGE for short, is a peer-to-peer cryptocurrency derived from Litecoin. The Internet phenomenon “”Doge”” was used as the basis for design and naming. “”Doge”” is a variation of the English word dog. A doge always consists of a picture showing a Shiba Inu and a rudimentary English text. As a result, the logo of the token also shows a Shiba Inu.
The Dogecoin currency was officially launched on December 8, 2013, and was intended to parody the success of Bitcoin and other legacy coins. However, during the first few weeks of trading, the currency’s exchange rate grew rapidly, so much so that on December 19, the exchange rate between the Dogecoin tokens and the USD was almost identical.
This resulted in a market capitalization of $8.8 million, making Dogecoin the ninth-largest cryptocurrency. Since the currency is based on a copy of the Litecoin blockchain, the proof-of-work algorithm has also been copied. Due to the initial high reward and low difficulty, as early as January 10, 2014, around 25 percent of the maximum possible number of tokens could be won.
The fact that DOGE is just a fun currency does not seem to deter many investors. On January 19, the developers wanted to collect doge tokens amounting to $30,000 USD, so that the Jamaican bobsled team can participate in the Olympic Winter Games.
This marketing strategy led to a 50 percent increase in the token price, bringing the market capitalization to more than $51.5 million. This milestone placed the currency seventh in the ranking of the largest cryptocurrencies. In addition, capital is currently being raised to finance a manned moon mission. This promotion kicked off in September 2017 and fueled the currency’s price.
What is the difference between DOGE and Bitcoin?
Basically, DOGE is a copy of Litecoin, so the Scrypt algorithm is used for the proof-of-work approach. However, Doge’s block time is just one minute, so transactions are completed and executed much faster. In particular, the maximum number of tokens distinguishes DOGE from the other Bitcoin offshoots.
For example, Bitcoin has 21 million coins and Litecoin 84 million tokens. DOGE, on the other hand, has a maximum token number of 100 billion. However, on February 2, 2014, it was decided to abolish this limitation, so that the currency has an inflationary character.
Since 2015, a new token creation of 5.256 billion tokens has been decided. Thus, inflation was 5.3 percent in the first year. However, due to constant token creation, inflation is steadily declining. DOGE mining has a fixed number of 10,000 tokens when a block is successfully completed.
Due to this high reward, the removal of the token limitation was a meaningful step. Since December 25, 2015, this principle has been followed so that the market would accept this approach.
Who is responsible for the development of DOGE?
The idea behind DOGE was developed by Jackson Palmer and Shibetoshi Nakamoto. Shibetoshi Nakamoto, however, is an assumed name, as the actual developer wants to preserve his anonymity. It is known that S. Nakamoto is a software developer and developed the original Dogecoin code.
He also sees himself as a nerd and a fan of Starcraft 2 and eSports. Nakamoto is an American living in Portland, Oregon. Furthermore, Nakamoto is very active in the crypto scene and publishes the personal contact data in his own Twitter account.
This should help to establish direct contact with the community. Also, the Twitter profile is constantly releasing new ad campaigns so that followers are constantly updated on the latest image enhancement initiatives.
Jackson Palmer, on the other hand, joined in later and helped improve the source code. Palmer is a product developer and data analyst, and currently works at Adobe. In addition to his work, he is a programmer and is currently working to improve DOGE. On his personal website, he presents his personal projects and successes, and lets interested parties participate in his life.
The three pillars of Dogecoin
On the homepage of the developer’s site, three pillars are presented that are of particular relevance to the use of Dogecoin. The first pillar is the start. All you have to do is create a wallet. Subsequently, some DOGE tokens must be purchased and stored in the wallet.
The next step is the application of tokens. The tokens can be used to purchase services or goods and can be exchanged into other currencies. Subsequently, contact with the community should be made, because this is the central element of Dogecoin.
In particular, the reddit community and the hashtag #dogecoinIRC are highlighted. The forums answer all relevant questions about DOGE and introduce new projects and actions.
The last point presented is the acquisition of DOGE. Here, the developers highlight some ways to acquire DOGE tokens. Basically, DOGE can be bought, traded, gifted and mined. For example, by participating in the community, DOGE can be distributed as a reward. The simplest method is to use a faucet – this is a website that introduces the user to the currency and generates free DOGE.
What is the current market capitalization of Dogecoin?
Having already grossed more than $60 million in market capitalization in February 2014, DOGE stagnated at around $23 million by February 2017. Subsequently, a strong upward movement could be seen until July 2017, so that a record value of $309 million USD was noted.
The next upward movement took place in November, ending on January 8, with a market capitalization of $1.95 billion. Meanwhile, the currency has consolidated but is again on an upward trend.