Dogecoin, the joke that became serious

 

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Much crypto, such wow

Started as an innocuous experiment, cryptocurrency, created by enthusiasts for enthusiasts, managed to conquer the world, survive three crypto booms, keep its price and prospects for development. Today, Dogecoin is one of the oldest currencies in the crypto world, unrelated to smart contracts, controversial solutions, constant hostility in the community, and uncontrolled forks.

How DOGE was able to achieve such popularity and what it represents from a technical point of view?

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Part meme, part functional token, part legend in the cryptocurrency community, Dogecoin is an interesting case study.

Dogecoin is like the classy comedian who was thrown out of school to make jokes that still became a billionaire.

While it’s easy to dismiss Dogecoin as a joke, its supportive community, and massive capitalization are hard to ignore.

The Dogecoin community has over 100,000 subscribers on Reddit.

Dogecoin: What is it

Dogecoin is a peer-to-peer digital currency, just like Bitcoin and Litecoin. It was founded in 2013 by Jackson Palmer and ” Shibetoshi Nakamoto “(Billy Markus).

The site and project are intertwined with tributes to its mascot, the Japanese dog Shiba Inu.

For those unfamiliar with the meme, “doge” comes from “dog”, and memes often revolve around expressions of simple emotions such as “very wow,” “very crypto” and “such a moon” in Comic Sans characters.

History

The history of the “dog blockchain” is unpretentious and simple. It was one of many Bitcoin and Litecoin forks created between 2011 and 2014. During the first crypto boom, when BTC grew more than $100 per unit, Australian Jackson Palmer came up with an unusual idea – to create a positive image of crypto projects in the eyes of people who are not interested in the world of cryptocurrencies at all.

Then, together with American Billy Markus, they decided to create a simple-to-understand cryptocurrency with a cheerful logo. Given the peak popularity of the meme in 2013, the choice was obvious.

Interesting fact: with the second advent of the meme, the popularity of the project for a short time has grown several times. After that, his graph returned to its original values.

Since at that time, the enthusiasts had no mathematical background, they chose the model of litecoin as the basis.

The release took place on December 6, 2013, and a full-fledged announcement, with a wallet, Scrypt algorithm, and mascot dog was released two days later – December 8, 2013.

Community

The DOGE community is recognized as one of the friendliest in the crypto world. First of all, they are known for their charitable actions aimed at resolving the consequences in cities affected by environmental disasters, working in social networks, changing the infrastructure of the Internet.

Moreover, it is actively used and informally integrated into the social network Facebook. It is used to pay content makers. The low cost combined with the fixed transaction fee in 1 DOGE has made it one of the most popular coins with the friendliest community.

The Dogecoin Foundation

The Doge community has created a non-profit organization (now seemingly defunct) called the Doge Foundation to “facilitate the use of Dogecoin through positive, promotional, and charitable initiatives.”

The Foundation openly extends its arms to those who “want to spread the love using the magic of doge”.”

This Foundation also claims to “make huge efforts to help people whether they are on the Moon or Earth.”

The Foundation has an inactive Reddit profile (last post over 2 years ago) and a Twitter profile.

The most famous activities include:

  • Support and funding of the Jamaican bobsleigh team that participated in the 2014 Winter Olympics.
  • Funding for NASCAR driver John Wise.
  • Combating environmental woes in Kenya by creating water wells.
  • Humanitarian and financial assistance to Kashmir to deal with the floods of the region.

The activity of the community and the significance of all that is confirmed not only by the charitable activities of the built company but also by the fact that the token, created initially just for fun is now traded on almost all known crypto sites, including decentralized exchanges.

Besides, we should not forget about periodic updates in the kernel code, connecting smart contracts, trying to solve the problem of scaling, fixed rate of coin emission, and so on. With unlimited coin generation, they avoid uncontrolled price increases and do not require a drastic increase in the complexity of decryption for mining.

How does Dogecoin work?

The coin is based on the modified litecoin protocol. Initially, DogeCoin fully copied the parent cryptocurrency in the construction of a chain of blocks, confirmation of mining, and was a typical fork.

The main difference was the uncharacteristic attitude of the community towards it. Created as part of a meme associated with the dog, it quickly gained popularity, and proved valid.

During the crypto-boom of late 2017, the price tripled the historical maximum and even became a financial refuge after dumping ERC-20 tokens. However, after the decline of the crypto boom, the quotes returned to the standard indicators and fully returned in correlation with the parent cryptocurrencies.

The system uses the Proof-of-work standard. This means that it has all the drawbacks of the first generation blockchain:

  • The problem of controlling the network by creating 51% of computing power.
  • Blockchain has problems scaling.
  • Transaction processing time grows with usage

Mining DOGE

In terms of mining costs, it is inferior in efficiency to LiteCoin about 1000 times. And yet enthusiasts do not despair, as they continue to count on serious pumping and expansion of the entire infrastructure of the project, as a result of which they want to get their X, which has already happened in 2018.

Before 2014, the size of the award was determined at random. After the growth in popularity, the community decided to fix it.

The award was set in 2014 and is 10,000 Doge, equivalent to approximately 29 USD at current cost. The speed at which blocks are found using the powerful Bitmain LTC, which is sharpened under the Scrypt algorithm, is approximately 1 block per minute when combined into pools. The reward is distributed in proportion to the amount of computing that is invested.

Due to the complexity of mining, the speed of generation and decryption is reduced exponentially. Today, more than 125 billion units are in circulation.

In 2018, the company provided Dogethereum demonstration technology to convert current coins into ERC-20 contracts. According to the developers, the technology is designed to combine the first generation Blockchain with cryptocurrencies based on Ethereum.

Dogecoin wallet, which one to choose?

Getting started with Dogecoin is a fairly simple process.

New users can download the MultiDoge wallet from the site and set it up in less than 5 minutes.

Alternatively, users can keep their Doge on their exchange wallets or any other wallet that supports the Doge.

Block.io – Multi-currency wallet.

Freewallet is another multi-currency wallet.

For greater security, you can use the official Hardware wallet Ledger Nano S.

Browsing doge’s site, you’ll see how simple the onboarding process is.

Dogecoin: Should I buy dogecoin?

Like any other token, Dogecoin is susceptible to extreme volatility and speculation.

No one can predict the price of anything on the market or advise you whether or not to buy an asset.

The flow and ebb of the market could push Doge in any direction and you should be ready to lose 100% of your investment in any cryptocurrency.

That said, Dogecoin saw substantial growth in 2017 and also at the beginning of 2021.

Its capitalization broke $2 billion in January 2018, and the meme-based token began to attract media attention like never before.

Although it has a peer-to-peer payment case and a vibrant and active community, there is not enough information to enforce whether you should invest in Dogecoin or any cryptocurrency or not.

How much is Dogecoin worth?

Due to the high emission speed associated with the low complexity of computing, the price has never been high.

You can see the current DOGE/USD prices on various exchanges at the top of this post.

Transactions processing time is about 6 minutes, and at peak times additional queues and change of reward to miners can seriously increase the transaction fees.

Where can you buy Dogecoin?

A huge reason Dogecoin has managed to gain popularity and remain popular is its wide availability in trades.

The most popular exchanges for Doge are: Bittrex (over 30%) and Poloniex (20%), as well as smaller exchanges Gate.IO, HitBTC, and CoinExchange, with the most popular pairs, such as DOGE/USD, DOGE/BTC, DOGE/ETHe

Here is a list of  exchanges where you can buy DOGE:

Ps. Even if on some of then you may not buy directly DOGE, you can still buy BTC and trade for DOGE after.

Trading Dogecoin

It is worth mentioning that Dogecoin is a first-level fork that is completely correlated with BTC. It is not associated with frozen ERC-20 contracts, which allows estimating its liquidity compared to other cryptos.

Due to the low price and a large amount of currency in use, it is almost impossible to move bulk trades and create an avalanche impulse.

When trading, focus on key levels and moving averages. Consider the lag ratio of Bitcoin correlation and only trade on official exchanges.

As for the fundamental analysis in the long term, according to the development data of the project, it may have a serious inflow of capitalization with the integration of Dogethereum technology, which will allow the formation of forks and create internal infrastructure.

Since the asset is more than half funded from crypto sources, its correlation to BTC price is close to 100%.

Final thoughts

If there’s only one golden lesson we can extract from the Doge project, it’s the importance of building a community.

The token has long been dismissed as a joke by the cryptocurrency elite, yet Dogecoin is far from obsolete due to its solid community of people who simply want to see the coin succeed for success.

Dogecoin was able to accomplish something few tokens can do.

It’s been around for about 7 years, which creates some respect.

Dogecoin also adds some color to the current cryptocurrency landscape.

This simple token claims to be nothing more than what it is: a peer-to-peer digital currency.

Among the thousands of pages of white papers, complex theories, and pedantic explanations of the cryptocurrency market, Doge is a rarity — and the community loves it.

Today it is one of the most important coins on the market. Despite the small market cap, it has a stable community, high relative liquidity, good profitability from mining.

Besides, the team has excellent prospects, taking into account the possibility of integrating their project towards smart contracts, which will allow in the future to use the coin not only as a means of payment, but also to form on its basis whole subsystems.

The beauty of this cryptocurrency, which was originally conceived as a joke, now has a very serious market capitalization – about $1.3 billion at the time of writing these lines (data Coinmarketcap). This is even though for more than two years have not been released any software updates with improvements for Dogecoin.

According to the creator of Dogecoin, situations like this are a “bad sign” for the cryptocurrency market as a whole.

Jackson Palmer, who now works as a product manager at Adobe, created Dogecoin, an unremarkable bitcoin clone, in 2013. The creator of Dogecoin, which sold all its doge back in 2015, believes that this unsupported price increase is extremely speculative and it is a bubble that will inevitably burst.

“You can’t argue with the objective fact that it’s over a decade and not much has happened in the grand scheme of things. The numbers went up but the money is apparently just moving around between people who are enthusiastic about it,” Palmer said.

Recently, such statements about cryptocurrencies are heard more and more often, but more optimistic users about cryptocurrencies do not take them seriously.

Contrary to such pessimistic views, the crypto markets have exploded in late 2020 and 2021 started with a boom, Bitcoin reached a new ATH at $40k and is not impossible for DOGE to follow the same path and maybe reach $0.5 or even $1 prices.

January 29, 2021 update

In the light of recent events (Redditors buying into GME stocks and subsequently pumping Dogecoin) it appears our prediction above is close to becoming accurate. Therefore, we can only say one thing:

DOGE TO THE MOON!

 

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