Key facts about Dogecoin (DOGE):
- Dogecoin is a cryptocurrency that was created in 2013.
- Though Dogecoin originated as a joke and internet meme currency, it has since become a serious cryptocurrency.
- Dogecoin is based on the cryptocurrency protocol Litecoin and uses a Proof of Work consensus mechanism to verify transactions and generate new coins.
- DOGE has an active and dedicated online community that often supports donation campaigns and other social initiatives.
- In recent years, Dogecoin has achieved a number of successes, including a strong price performance in 2021.
- Dogecoin stands out with a relatively large coin supply of nearly 130 billion coins, in contrast to cryptocurrencies like Bitcoin that have a fixed coin supply.
About Dogecoin (DOGE)
Dogecoin (DOGE) is an open-source and peer-to-peer digital currency based on the viral "DOGE" meme. The cryptocurrency was founded on December 6, 2013, by Billy Markus and Jackson Palmer and quickly developed an active community. Dogecoin is primarily used as a tipping currency on Reddit and Twitter to reward exceptional content on social media. The community-owned Dogecoin Foundation regularly participates in charitable events.
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What is Dogecoin (DOGE)?
Dogecoin (DOGE) is a cryptocurrency that emerged in 2013 as a humorous parody of other cryptocurrencies like Bitcoin. The name of the cryptocurrency and the Shiba Inu emblem are based on a well-known internet meme.
In contrast to Bitcoin, which is designed with a limited supply of coins, Dogecoins intentionally have a plentiful supply, with 10,000 new coins being mined per minute and no set limit on the total number of coins. Dogecoin's blockchain and DOGE cryptocurrency were created by software engineers Billy Markus and Jackson Palmer. Markus worked at IT consulting company IBM, while Palmer worked at software company Adobe. The team shared a vision of creating an entertaining and user-friendly crypto project that stands out from traditional banking systems and charges practically no fees for instant transactions.
The Dogecoin project started with the idea of creating a cryptocurrency that could be used by a broader population than Bitcoin. Palmer initiated the first step towards this goal by purchasing the domain dogecoin.com and setting up the project's official website. After the launch of DOGE and achieving millions of dollars in trading volume in the early days, the number of visitors to the official website also increased.
DOGE: A cryptocurrency takes off
Initially launched as a joke, Dogecoin combined two popular online topics at the time; the emerging cryptocurrency Bitcoin and a meme featuring a Shiba Inu accompanied by a misspelt version of the English word for "dog." To the surprise of its creators, Dogecoin quickly became a success, with dogecoin.com receiving over a million visitors in its first month. What was particularly unusual was that Dogecoin became a full-fledged cryptocurrency, with its own blockchain and a mining system similar to Litecoin's. The historically low prices (for most of its existence, DOGE could be bought for fractions of a penny) and the large quantity have made it attractive to speculators hoping for a rise in value. Dogecoin has a dedicated mining community that ensures the cryptocurrency remains active and traded. DOGE experienced a rapid increase in value during the 2017 cryptocurrency boom, with its market capitalisation surpassing 1 billion US dollars for the first time.
How does Dogecoin mining work?
Dogecoin uses the Proof of Work protocol, which allows it to be mined similarly to Bitcoin. Miners are responsible for verifying and confirming transactions to protect the network from attacks and malicious activity. One Dogecoin block is produced per minute, and the reward for mining is 10,000 DOGE per newly attached block.
Dogecoin differs from the Bitcoin Proof of Work protocol in several ways. One of these differences is the use of Scrypt technology instead of Bitcoin. With a block time of only one minute and an unlimited total supply, Dogecoin offers unlimited possibilities for mining. There are two ways to mine Dogecoin: solo or in a mining pool. Since 2014, you can also mine Dogecoin and Litecoin simultaneously, as they merge in processing (Merged Mining).
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Dogecoin versus Bitcoin
Dogecoin markets itself as a "fun" version of Bitcoin with a Shiba Inu dog as its logo. Dogecoin's relaxed presentation matched the mood of the burgeoning crypto community at the time. However, its scrypt technology and limitless supply continue to serve as arguments for a faster, adaptable, and more consumer-friendly version of Bitcoin. Dogecoin is considered an "inflationary" coin, while cryptocurrencies like Bitcoin are deflationary. Every four years, the amount of Bitcoin introduced into circulation through mining rewards is halved (a process known as "halving") and the inflation rate halves along with it until all coins are released.
More facts about Dogecoin
What you need to know about Dogecoin:
- Dogecoin was founded at the end of 2013 by two software engineers, Bill Markus and Jackson Palmer, who worked at IBM and Adobe Systems respectively.
- Dogecoin was created using the open-source code of Litecoin, which in turn was an extension of the Bitcoin blockchain.
- The main purpose of its creation was to heighten public awareness of the possibilities of blockchain technology.
- Dogecoin experienced a rapid rise in its value during the crypto boom in 2017, with the coin's market capitalisation exceeding one billion US dollars for the first time.
- Thanks to the backing of a large online community, which included Elon Musk, Mark Cuban, and Snoop Dogg, Dogecoin rose by more than 4000% in 2021 alone.
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DOGE: Price and evolution of the cryptocurrency
DOGE has experienced a rollercoaster of price fluctuations in its short history. The popular meme coin was initially worth just a fraction of a penny, but experienced a boom that saw it hit an all-time high of about 74 cents (USD) in May 2021.
Important milestones and events of Dogecoin
The most significant milestones and events of the DOGE price so far have been:
- 2013: Within the first two weeks of its launch, the price of Dogecoin rose from 0.0002 USD to 0.0023 USD
- January 2018: the DOGE price rose for the first time to 0.018 USD / DOGE with a market capitalisation of one billion US dollars
- 2020: the DOGE price started at 0.00023 USD / DOGE and reached a new peak of 0.0032 USD / DOGE in July
- In the months after this peak, the DOGE price fell until it shot up once again in November ending the year at 0.0046 USD / DOGE
- Between January and May 2021, Dogecoin rose by 9,884%, from about 0.03 to 0.74 USD / DOGE - its all-time high (ATH) to date
- 2022: the DOGE price experienced a downward trend, fluctuating between approximately 0.14 and 0.085 USD / DOGE
Development of the Dogecoin price
Even though Dogecoin has experienced some highs and lows, it has never been worth more than one US dollar. Since the supply of Dogecoin is unlimited, the value development depends on investors continuously buying new DOGE coming into circulation.
At the introduction of Dogecoin, the founders took a different approach than many other cryptocurrencies. There was no public sale or "pre-mining", but the total supply was set in advance at 100 billion coins. So anyone with a laptop or smartphone could start mining immediately.
Another special feature of Dogecoin is the block reward system. Inspired by a project called LuckyCoin, Dogecoin block rewards were randomly assigned, which meant miners could receive between 0 and 1 million DOGE for mining a single block. The available number of coins for block rewards decreased every 100,000 blocks until, in 2014, the founders decided to switch to a fixed schedule. After this, successful miners received 10,000 Dogecoin as a reward for each successfully completed block.
Crypto newcomer DOGE had a fast start
On 15 December 2013, DOGE was traded for the first time on crypto exchanges at a price of 0.0002993 US dollars. The currency quickly became popular among crypto users, and two weeks after its introduction, the Reddit channel r/Dogecoin started to attract thousands of users and contributors. Within the first two weeks after launch, the Dogecoin price rose from 0.0002 to 0.0023 US dollars, an increase of 1,061%, although the actual value of the DOGE token at the end of 2013 was relatively low compared to cryptocurrencies like Bitcoin or Ethereum.
Rising popularity of Dogecoin
Despite its increasing popularity in the first four years on the crypto market, Dogecoin experienced only two short-term spikes in its value. The first peak occurred immediately after its release, as its price rose within 15 days from 0.0002 to 0.0023 US dollars – an increase of 1,061%. The second significant increase occurred in March 2017, when the entire crypto industry entered a bull market – a period of persistently rising stock prices. During this time, the DOGE price rose to a peak of 0.004 US dollars, an increase of 1,494% – the highest price since its inception.
The rollercoaster ride to Dogecoin's all-time high
The DOGE price fluctuated after its increase in 2017 and fell back below 0.001 US dollars. It wasn't until November of the same year that numerous investors once again invested and Dogecoin reached another high of 0.018 US dollars in January 2018. Nevertheless, it took more than three years for Dogecoin to reach this level again, following a period of low trading activity and declining interest in the cryptocurrency.
However, the hype around Dogecoin returned at the beginning of 2021 thanks to prominent supporters such as Tesla CEO Elon Musk, which led the DOGE price to a new all-time high. Between January and May, the price rose by 9,884% and finally reached the peak of 0.74 USD.
Current forecast for Dogecoin
When developing a forecast for the Dogecoin price, experts analyse the cryptocurrency's price history and incorporate technical and societal aspects: Dogecoin is based on the Litecoin blockchain and uses scrypt technologies. Although it can process over 40 transactions per second, mining on this platform is more complex than on Proof of Work based blockchains. Dogecoin is also considered a cryptocurrency suitable for various applications due to its low transaction costs.
Experts expect that the demand for Dogecoin will increase due to its popularity on social media and its low transaction costs. Therefore, it is possible that Dogecoin could reach a price of 0.6 USD / DOGE by 2023. However, past price developments are no indication of future price developments.
How is the DOGE price influenced?
The price of Dogecoin depends on a variety of factors that influence its development. The strong and supportive community is an important factor that defines the value of Dogecoin. In addition, recommendations from celebrities like Elon Musk also influence the Dogecoin price – as was seen in the case of Elon Musk's tweet, in which he referred to DOGE as one of the most interesting digital assets.
Dogecoin also follows important global trends that influence the crypto market. The value of DOGE can change due to trends driven by assets like Bitcoin. The application possibilities of Dogecoin also play a role, as DOGE is currently primarily used as a means of transferring tips and micro payments on social media platforms. This functionality and the almost fee-free transfer of Dogecoin contribute to its popularity and can positively influence the price trend.
DOGE: The impact of social and economic conditions
The value of Dogecoin, like any other asset, depends on supply and demand. As the supply continues to grow, demand would have to increase exponentially to maintain the value at the current level.
DOGE prices experienced a strong rise in 2021, which was triggered by small investors on Reddit, including the subreddit "wallstreetbets". They worked together to drive up prices, while the general crypto boom and tweets from Elon Musk amplified the increase.
This sudden rise attracted a lot of attention in the (social) media, which in turn attracted further investments and drove the price up even further. Fear of missing out drove a wave of new investors. Dogecoin remains a very volatile (fluctuating in value) cryptocurrency and there is no guarantee of future price increases or losses - the difficult economic situation surrounding the COVID-19 pandemic and the Ukraine war ultimately affects the entire financial market.
DOGE: An inflationary coin
Unlike Bitcoin, Dogecoin has no fixed upper limit. Theoretically, an infinite number of coins can be mined. The two founders, Markus and Palmer, originally set a limit of 100 billion coins, but just one year later they decided to remove this upper limit, giving Dogecoin an inflationary character. In 2014, the inflation rate was still 5.3%, but as the annual amount of new coins remains constant, the inflation rate decreases each year. By 2025, it will fall to 3.4%, by 2035 to 2.5% and by 2050 to 1.9%. Meanwhile, the amount of coins has exceeded the originally set upper limit by nearly 30 billion coins. The amount of coins in circulation also influences the value of the DOGE price.
Publicity effect and partnerships
Dogecoin partnerships are strongly driven by the community. DOGE has become an accepted form of payment at more than 2,000 merchants, hotels, and even the AMC cinema chain. Mark Cuban uses the coin for his basketball team, the Dallas Mavericks, and Elon Musk also has plans to use it. This has made Dogecoin one of the most widely used cryptocurrencies on the market.
Overall, it appears that the DOGE price is strongly influenced by its popularity - especially for memecoins, interactions on social networks are of particular importance. The greater the popularity of the coin, the stronger the demand from investors and the higher the price of the cryptocurrency can rise.