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Dogecoin (DOGE) was founded in 2013 as a sarcastic joke against a “hyped” crypto industry. Its logo comes from a very well-known meme, which was popular in 2013, and just memes, and humor is something that permeates the entire history of cryptocurrency.
It is a controversial cryptocurrency that has been criticized for, among other things, “not having a unique function” and based on the fact that Elon Musk is considered to have “too great an impact on the price”. But Dogecoin clearly shows that no technical innovations are required for a cryptocurrency to succeed – a sarcastic joke that goes viral may suffice – spiced with the currency being advocated by a couple of celebrities…
The total value of Dogecoin in September 2021 was USD 35,720,702,589 and the currency was then the seventh largest cryptocurrency in terms of market cap. In terms of its primary function (micropayments), it was the largest currency. This is before currencies such as Litecoin and Monero.
The purpose of Dogecoin is to offer fast, secure and cheap transactions over the internet. The currency has also become synonymous with memes, tweets and the opportunity to tip via social media.
Investments in Dogecoin can be made in the long term with the hope that the currency will become an obvious alternative for payments in shops and e-shops and that more people will use the currency on social media.
But investments can also be made in the short term with the aim of exploiting the great volatility of the currency. The fact that many choose that path is shown, for example, by the fact that Dogecoin has during some periods been the most traded currency on the American platform RobinHood.
What is Dogecoin?
Dogecoin is a cryptocurrency that can be easily and cheaply sent between its users. It is hardly unique from a technical perspective as the same function can be found in, for example, Bitcoin Cash, Litecoin and Dash.
Although there are some technical differences between Dogecoin and its “competitors”, it is not technical innovations that have made the currency so successful – rather a dedicated community with a humorous focus.
Dogecoin should therefore not be explained primarily on the basis of its technology or original goals (secure, fast payments) but rather on the basis of how its community uses the currency and how its popularity has increased over time.
We use Etoro.com to trade and invest in this cryptocurrency. On Etoro you can buy or take a short position in stocks, indicies, commodities, cryptocurrencies etc in a very easy way both directly in the asset or using CFD:s with or without leverage.
Technology and Mining
Dogecoin is developed based on Luckycoin (which is based on Litecoin), which means proof-of-work via script technology. In short, this means that mining must be performed with, for example, dedicated ASIC units.
From the beginning, the reward for mining was random, but this changed relatively quickly to become static. Thus, 10,000 Dogecoin are produced per block and one block takes about 1 minute.
History – Created on a joke
The first step to Dogecoin was taken in 2013 by Jackson Palmer. From the beginning, it was a humorous joke project that satirically wanted to demonstrate the hype that then existed around cryptocurrencies. But that would result in something completely different…
He bought the domain Dogecoin.com and soon began collaborating with Billy Marcus who had contacted Jackson after he discovered the “buzz” that had arisen around Dogecoin on social media. Together, they developed the cryptocurrency, which was launched on December 6, 2013. Already during the first two weeks, the value had increased by 300%, which was largely due to the “buzz” that has characterized the currency ever since.
Memes and community
Dogecoin is characterized by a very large, dedicated and humor-inspired community. The currency logo (Shiba Inu) was widely used in memes before the currency was launched and this memes culture then joined its community.
When Dogecoin is mentioned on Twitter, Discord or Reddit, it is jokes, memes and humor that characterize the posts rather than serious discussions about technological development and new features.
“A fun and friendly internet currency!“
By linking special Dogecoin wallets to bots, it is possible to tip in the cryptocurrency on, for example, Reddit and Twitter. This provided, of course, that the recipient also has such a wallet. It is a function that is used to a very large extent and is used to show appreciation instead of just giving a “like”.
There are very few cryptocurrencies that have had such an impact on a single person as Dogecoin. Through positive statements about the currency in, among other things, social media, Dogecoin has received extremely great attention in both social media and traditional media. Above all, there have been memes where Dogecoin has been hinted at “go to moon” (expression of very strong value development).
Another example is that Elon Musk, in May 2021, chose to tell via a Tweet that his space company SpaceX would start accepting Dogecoin as payment for space travel.
What started as a joke…
What started as a sarcastic joke in 2013 has developed into an accepted cryptocurrency with almost cult status. A currency that is among the ten largest in the world, which is “marketed” by Elon Musk and several American celebrities and which has become the obvious currency to use on Reddit. The small currency, which has endured massive criticism over the years, has become so large that it can no longer be explained away as “a joke”.
“Dogecoin is no longer a joke. Its popularity has soared — astronomically, this year — buoyed in part by the mainstream adoption of bitcoin and other cryptocurrencies.” /CNN Business
Critical voices against Dogecoin
Dogecoin has historically had to endure a lot of criticism. On the other hand, criticism has subsided somewhat after more and more crypto exchanges have started offering currency trading and it has become one of the ten largest in terms of market value.
Does Dogecoin have a unique feature?
There are lots of cryptocurrencies that offer “fast, cheap and secure payments over the internet”. In terms of technology, Dogecoin has no unique function. In the beginning, other currencies were seen as more obvious, especially for micropayments.
But with its growing popularity, and value increase, in 2021, Dogecoin came up on the list of the 10 largest cryptocurrencies and at the same time became larger than similar currencies with the same primary function
Who owns about 30%?
The wallet that owns the most Dogecoin has close to 30% of all coins. With a price of 0.27 USD, it means a total value of the wallet of 9,995,157,914.45 USD! In addition, more Dogecoin are sent to the address almost daily.
Can a decentralized cryptocurrency really be decentralized if a single person owns about 30% and the 10 largest wallets about 40%? What would happen to the price if the person chooses to sell their holding?
What role does Elon Musk play?
Not everyone appreciates the impact that Elon Musk obviously has on the course. One example is one of the world’s oldest crypto exchanges, Bitstamp, which in the summer of 2021 indicated that Dogecoin was too closely linked to Elon Musk and that they therefore chose not to include the currency in its range.
“We won´t list a crypto that “crashes on a billionaire´s tweet” / Julian Sawyer, Bitstamp
Invest in Dogecoin
In 2021, Dogecoin gained more and more attention and popularity. It also meant that more and more crypto exchanges chose to offer trading in the cryptocurrency, including for example Coinbase.
Below are three examples of exchanges where it is possible to invest in Dogecoin.
eToro is one of the world’s largest trading platforms for stocks, CFDs, cryptocurrencies and social trading. What primarily characterizes eToro is its user-friendliness. Beginners see very quickly how buying / selling takes place in different commodities. It is as easy to bet on a decline as on a rise in the price and you can choose between trading with or without leverage.
The downside is that eToro “locks” trading to their platform. It is very complicated to take out your coins to a Dogewallet or other crypto exchange if you would like to do so. No alternative for you who want to send to friends or give as a drink.
Binance is the world’s largest exchange for trading cryptocurrencies. Registration and verification of account usually takes less than 24 hours and after that money can be deposited, for example, by card. The big advantage of Binance is the supply and liquidity. Here it is possible to exchange hundreds of cryptocurrencies for each other and investments can be made in staking, with leverage, options and a number of other financial instruments.
The downside of Binance is its ease of use. For beginners, it can be difficult to grasp how trading takes place. In addition, customer support often receives criticism for slow handling of customer matters.
The listed American crypto company Coinbase has its strength in user-friendliness. It is usually quick to register and verify an account and then it is easy to understand how the trade takes place. It is both possible to trade against fiat and make exchanges between the different currencies that the platform offers.
The disadvantage of Coinbase is the fees, which are significantly higher than at eToro and Binance. Coinbase is recommended as a “first step in the crypto world”, but then trading should take place on Coinbase Pro (use the same login information as on Coinbase), Binance or eToro.
Value development of Dogecoin
The graph below shows the value development of Dogecoin between December 2013 and September 2021. Historically, the largest price increase has taken place during the spring of 2021.
The graph, on the other hand, is somewhat misleading as on several occasions there have been extremely sharp price increases with several 100% in just a few weeks. But if this is put to the development in 2021, the value changes still look small.
What the explosive value development was due to can only be speculated on. But often one / some of the following points are mentioned.
• Elon Musk – Many have heard of Dogecoin for the first time via Elon Musk’s tweet
• Access to trading – Several exchanges introduced Dogecoin in the spring of 2021, which gave more people the opportunity to invest / trade.
• Fomo – “Fear of missing out” occurs in most cryptocurrencies with sharp increases in value.
• Social media – Dogecoin got its first “breakthrough” thanks to social media and it is still one of the most mentioned cryptocurrencies.
• “Simplicity” – Dogecoin’s success may have to do with its simple technical structure. The important thing is to have fun, send memes and tip – not to have a complicated technical cryptocurrency. Doge is, as Elon Musk has said, “the currency of the people.”