What is Dogecoin? (DOGE)
The Beginner’s Guide
So meme. Such coin. Wow.
Dogecoin is a cryptocurrency inspired by a popular meme known as Doge, a picture of a Shiba Inu dog accompanied by colorful Comic Sans phrases meant to convey its inner monologue.
Launched at the end of 2013, Dogecoin rose to popularity at a time when developers were just beginning to explore the possibilities afforded by Bitcoin’s (BTC) invention.
Indeed, its creation was an effort to bring personality and accessibility to the new technology, which helped propel Dogecoin into the center of industry conversation into 2014.
More surprising, even to its creators, is that Dogecoin continues to enjoy an enthusiastic fan base and vibrant online community. To this day, its cryptocurrency, DOGE, is still exchanged, predominantly for tipping online content creators or for crowdfunding efforts.
One reason is that Dogecoin operates much like many other cryptocurrencies in that it offers users the ability to exchange value, over the internet, without traditional financial gatekeepers.
Who created Dogecoin?
Dogecoin was launched in December 2013 by programmer Billy Markus and marketer Jackson Palmer who created the coin as sort of a joke based on the Doge meme.
Palmer left the project in 2015, but Markus remains its lead developer even today.
Although it’s cloaked in a humorous veneer, Dogecoin’s developers have insisted over the years that they do take the project, and their responsibility to users, seriously. As evidence, the project would even embark on some notable experiments in cryptocurrency design.
Dogecoin would also highlight the importance of community in crypto money systems, as its users have been behind some high-profile crowdfunding efforts, including raising $50,000 in DOGE to help send the Jamaican Bobsled Team to the 2014 Olympic Games.
How does Dogecoin work?
The Dogecoin code was initially copied from an earlier now-defunct cryptocurrency called Luckycoin, itself a fork of Litecoin (LTC).
From this earlier design, Dogecoin borrowed a Scrypt-based consensus algorithm to enforce how the network of computers running its software came to consensus on its transaction history.
As with Bitcoin, anyone running the Dogecoin software can dedicate computer power to providing this service – a process often called “mining” – in exchange for the opportunity to be awarded newly minted cryptocurrency.
Dogecoin’s most notable experiment, however, was its monetary policy. For example, there is now no limit on how much Dogecoin can be minted by the software.
Initially the total supply of Dogecoin was capped at 100 billion DOGE, but developers eliminated this a few months after launch with the aim of making its money supply inflationary.
Over time, this abundance of supply would disincentivize miners from securing the Dogecoin blockchain, and in 2014, its mining process was integrated with Litecoin’s. This meant anyone mining Litecoin could also mine Dogecoin without additional work.
As of February 2018, more than 113 billion DOGE have been mined, and 5 billion DOGE continue to be released by the software each year.
Why does DOGE have value?
Even after the fun and amusement of the initial Dogecoin idea wore off, the network’s currency supply continues to retain purchasing power and see use in online commerce.
Like any cryptocurrency, Dogecoin has a floating exchange rate with other digital assets, and can similarly be bought, traded and exchanged for fiat currency or physical goods.
Still, Dogecoin continues to be most often used in online tipping over social networks like Reddit, where DOGE is exchanged between peers and content creators.
Kraken's Crypto Guides
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- What is Bitcoin Cash? (BCH)
- What is Litecoin? (LTC)
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- What is Stellar? (XLM)
- What is Cardano? (ADA)
- What is Monero? (XMR)
- What is Tron? (TRX)
- What is Dash? (DASH)
- What is Ethereum Classic? (ETC)
- What is Zcash? (ZEC)
- What is Basic Attention Token? (BAT)
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- What is Waves? (WAVES)
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- What is Melon? (MLN)
Why use DOGE?
Dogecoin’s biggest selling point continues to be its robust community of enthusiastic fans, known as Shibes, who often use the currency to tip content creators whose work they enjoy.
Given its limitless supply, DOGE may be less attractive as an investment, but it remains a very real cryptocurrency in that it has value that can be stored or exchanged.
As such, newcomers continue to find Dogecoin a less serious and more accessible entry point to the sometimes hostile communities that populate the cryptocurrency industry.
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