Dogecoin: a Meme to the Moon
June 15, 2021
“And now, for something completely different” cit.
Dogecoin is a cryptocurrency that was created as a joke, if something as complex as a cryptocurrency can be considered as such.
A high-level meme
The name of the coin is based on a well-known meme, namely the doge: a friendly shiba inu dog whose statements in comic sans are always sarcastic.
The creators are two software engineers: Billy Markus from IBM and Jackson Palmer from Adobe, who launched Dogecoin in 2013, as a satirical response to the hundreds of altcoins that were publishing whitepapers and calling themselves revolutionary.
7 years later it is among the top 10 cryptocurrencies on the market by capitalisation and has become the second most popular cryptocurrency in the world, thanks to its honorary godfather Elon Musk, the Dogefather.
After the impressive rise in price spurred on by Dogefather, many will ask: so besides the meme, is there anything to it?
To the moon…
Before answering the question, let’s look back at what happened over the course of a year, and how Dogecoin became popular outside the Reddit and Twitter niches.
Dogecoin from 2013 to 2020 always stayed below $0.002501, ignored and dormant.
The first triggering event started out of nowhere. On TikTok in July 2020 a trend appeared with the aim of getting Dogecoin to $1. The ambitious challenge still managed to increase the price by 40% in 2 days.
In January of the following year, the GameStop pump took place, led by WallStreetBets on Reddit. The Reddit community followed suit and SatoshiStreetBets, with Elon Musk’s Tweet blessing, led Dogecoin to rise 800% in 24 hours to $0.07.
In March 2021, Mark Cuban announced that his NBA team, the Dallas Mavericks, would accept the purchase of tickets and products with Dogecoin. In 2 days, the team received 20,000 transactions in DOGE.
Tweet after tweet, on May 4th the value of Dogecoin broke through the symbolic $0.50 barrier for the first time, with an increase of over 20,000% in one year.
On May 8th 2021, despite, or perhaps because of, expectations of increased interest in Dogecoin arising from Elon Musk hosting Saturday Night Live, Dogecoin dropped 34% from $0.711 at the show’s opening. The following morning Dogecoin hit a low of $0.401, with a cumulative drop of 43.6% and a lost value by $35 billion.
Musk did not desist, and on May 10th he announced that SpaceX had paid the Geometric Energy Corporation in Dogecoin, which in 2022 will launch a satellite to the Moon called DOGE-1.
The next day, however, he published a poll on Tesla‘s acceptance of Dogecoin: 78% voted yes.
Despite the extreme volatility caused by social media, it is positive to note that both GameStop and Doge have maintained price lows visibly higher than 2020 after 6 months.
What is Dogecoin used for?
Dogecoin does not have a classic whitepaper with a visionary roadmap.
Dogecoin’s modest mission has been decided by its community over time. The currency is intended as a simple means of exchange, so much so that the header of the official website reads: 1 Dogecoin = 1 Dogecoin.
Despite the incredible speculation suffered by the innocent Shiba, it only wants to be the internet currency. The one you use to support your favourite content creator, the one you send as a birthday present for your Meme-Master friend or to give to charity in alternative ways.
For this reason, the maximum supply of DOGE has not been set either.
The important thing is not that it reaches the denomination of Bitcoin, but that there is always DOGE to use and exchange.
Dogecoin is intended as a means of exchange, and has indeed become one, both between users on social networks and for businesses. Not only does the Dallas Mavericks accept payments in Dogecoin: it has now reached over 1300 retailers.
The most famous are: the Kessler Collection hotel chain, AirBaltic and Post Oak Motor Cars, the first Rolls-Royce dealership.
How to use Dogecoin
Dogecoin has been coded on the basis of Lucky Coin, a fork of Litecoin, adopting the Proof-of-Work mechanism. As such, Dogecoin can be mined.
Dogecoin also offers an official wallet in 3 variants: Multidoge; Dogecoin Core, dedicated to those who mine DOGE; and Dogecoin Android wallet, an app with 1 million downloads.
Mining for health
There are several ways to mine Dogecoin, but the most interesting project concerning mining is Folding@Home (FaH).
It is a consortium of several universities and institutes around the world, supported by companies such as Intel, Aws, Microsoft, Nvidia.
FaH is a distributed network with a bot that gives a weekly score based on the computational work performed.
FaH particularly helps scientists studying Covid 19, Alzheimer’s, Huntington’s, Parkinson’s and many other diseases by providing them with the computational power to simulate protein folding and study it.
The Guardian reported that Folding@Home (FaH), run by volunteers, has created the world’s fastest supercomputer to combat the Coronavirus.
By participating in FaH with the dogefolders team, you can provide computational power that helps scientists find new cures and at the same time get Dogecoin as a reward based on your score.
The Dogecoin community has participated in notable causes in the past, encouraging several charity fundraisers. Here are the 2 most famous ones.
2014 Winter Olympics
On 19 January 2014, a fundraiser was set up by the Dogecoin community to raise $50,000 for the Jamaican bobsled team, which had qualified but could not afford to go to the Winter Olympics in Sochi. By the second day, $36,000 in Dogecoin had been donated and the DOGE-BTC price had increased by 50%. The Dogecoin community also raised money for a second Sochi athlete, Shiva Keshavan.
Inspired by the solidarity that emerged during the Winter Olympics and other small charitable successes, Dogecoin, led by Eric Nakagawa, launched a fundraiser to build a well in the Tana River Basin in Kenya in partnership with Charity: Water. The goal was to raise a total of $30,000 in Dogecoin before World Water Day. The campaign was successful, collecting donations from more than 4,000 people, including an anonymous benefactor who alone donated 14,000,000 Dogecoins (approximately $11,000).
The Doge’s two faces
What is clear from the current situation (June 2021) is that much of the market attracted by Dogecoin is made up of speculators or, unfortunately, people who do not know what they have bought and, caught up in the FUD, have sold at a loss after the post-SNL price collapse.
Those who probably keep the price of Dogecoin bullish are different people. They are those who have understood the true spirit of Dogecoin: to take things less seriously, not to pretend to change the world, but rather to act, to propose, to use.
Beyond the sensationalist headlines and hype, it is important to look at how this currency was born. It was certainly not created for the benefit of Markus and Palmer, who could never have foreseen the events of 7 years later.
What’s more, Bill Markus said he sold all his DOGEs in 2015, with which he bought a second-hand Honda Civic.
While in a 2014 interview, Palmer pointed out that Dogecoin can be great as a viral phenomenon, as it can stimulate more and more people to learn about cryptocurrencies. The observation applies even more so today.
Speculators and market manipulation, however, still exist and may continue to drive the price of Dogecoin. It is, therefore, crucial to keep up to date and understand the mechanics of the market before deciding when and how much to buy.