Dogecoin
Dogecoin is a cryptocurrency that emerged in 2013, created by software engineers Billy Markus and Jackson Palmer. It was inspired by Bitcoin and the popular Doge meme featuring a Shiba Inu dog. Unlike Bitcoin, Dogecoin has no maximum supply limit, which has contributed to its relatively lower value. Initially valued at less than one cent, Dogecoin gained significant traction thanks to social media platforms, particularly Reddit, where users began sending small amounts of Dogecoin as tips for content they appreciated.
In 2021, Dogecoin experienced a surge in popularity, partly driven by the Reddit community's efforts to inflate its price, pushing it to an all-time high of sixty-nine cents in May of that year. Despite its playful origins, Dogecoin has been used for serious purposes, including charitable fundraising. However, its value is known to be volatile, reflecting the broader trends within the cryptocurrency market. Overall, Dogecoin exemplifies the power of community engagement in the digital currency space and highlights the unpredictable nature of cryptocurrency investments.
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Dogecoin
Dogecoin is a type of cryptocurrency based on Bitcoin’s blockchain that was first developed in 2013 and gained widespread notoriety in early 2021. At that time, an individual Bitcoin was valued at tens of thousands of dollars, but an individual Dogecoin was valued at less than one dollar. However, the currency became one of the most traded and valued digital currencies on the market. The cryptocurrency was originally created by software engineers Billy Markus and Jackson Palmer. They named the currency after Bitcoin and Doge, a popular Internet meme at the time Dogecoin was created.
Dogecoin quickly grew in popularity as social media and users of the news aggregate Reddit developed software to send small denominations of the currency to one another. Though the currency was usually valued at less than one cent per Dogecoin, it was traded rapidly and in large quantities across the Internet. In 2017, the total value of Dogecoin surpassed $2 billion. In 2021, Reddit users worked to inflate the price of Dogecoin, pushing the currency’s value to sixty-nine cents per Dogecoin in May of that year. Many investors hoped to continue to inflate the cryptocurrency’s price to above one dollar per coin.
Background
Dogecoin is a specific type of cryptocurrency. Cryptocurrency is a digital currency secured by cryptography. These currencies have no physical backing or representation and instead function on blockchain technology. Blockchains are large digital ledgers maintained on a digital network distributed throughout many computers, securing them against any potential attempts at duplication, counterfeiting, or other forms of manipulation. Because cryptocurrencies exist independently of any nation or state, they are theoretically immune from direct government manipulation.
Because cryptocurrencies are difficult to control, track, or manipulate, many governments and financial institutions expressed concerns over their growing popularity. They worried that such a large paradigm shift in currency would disrupt financial institutions, and that legal restrictions surrounding the use of cryptocurrencies were not ready for its widespread implementation.
The first blockchain-based cryptocurrency was Bitcoin, launched in 2009 by an individual or group working under the pseudonym Satoshi Nakamoto. Initially, the currency commanded very little value, and large quantities of the digital coin were spent on very little. However, as the currency grew in popularity, the value of each bitcoin rapidly increased. Bitcoin soon became a household name in digital currency and remained the most popular and valuable type of cryptocurrency available. Numerous other cryptocurrencies based on Bitcoin’s blockchain technology were developed and are commonly used for different purposes. Some of these competing cryptocurrencies include Ethereum, Binance, Tether, Solana, Litecoin, and Peercoin.
Cryptocurrencies are often praised for their ability to quickly and easily transfer funds between two parties. This removes the need for a bank or other financial institution to facilitate the transaction. It can also make the transaction more difficult to track. Because cryptocurrency transactions are carried out through comparatively simple software, the fees for large currency transfers are typically small. This allows cryptocurrency users to avoid the large fees sometimes charged by banks or financial institutions for wire transfers. However, because of cryptocurrency’s deregulated, semi-anonymous nature, it gained a reputation for use in illicit transactions. These included money laundering, tax evasion, and the purchase of illegal goods, especially on the dark web. Similarly, because there is no governing body able to influence cryptocurrency transactions, anyone who suffers from a scam may never be able to recover lost money.
Overview
Dogecoin was developed in 2013 as Bitcoin was rapidly rising in value. The cryptocurrency was created by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer. Dogecoin was named by combining the name of Bitcoin, the most popular cryptocurrency, with Doge, a popular Internet meme based on an image of a Shiba Inu dog.
Prior to the release of the cryptocurrency, Palmer tweeted to advertise it. After seeing support from his followers, he purchased the domain Dogecoin.com. Unlike Bitcoin, Dogecoin had no limit to the number of coins that could eventually be produced by people mining the currency. For this reason, Dogecoin was expected to remain at a substantially lower value than Bitcoin.
Shortly after its release, and partly due to its association with the Doge meme, Dogecoin was rapidly adopted by Internet users. The currency became particularly popular on the social media and news aggregation website Reddit, where users developed software allowing them to “tip” other users in Dogecoin. For example, if one user came up with an idea that others liked, other users might send them Dogecoin as a reward. Because each individual Dogecoin still carried very little value, many of these tips were valued at fractions of a cent. However, because the value of cryptocurrency fluctuates, many users were aware that the value of their Dogecoin might significantly increase.
Though the engineers who developed Dogecoin stated that they expected users to take Dogecoin less seriously than other cryptocurrencies and that they never intended to compete with Bitcoin, Dogecoin continued to grow in popularity rapidly. In 2014, the cryptocurrency briefly became the most traded digital currency. However, Dogecoin was unable to hold that title.
In 2017, Dogecoin hit a major milestone in cryptocurrency, reaching $2 billion in the currency’s total market value. It continued to climb, experiencing a major surge in 2021. Redditors organizing on the subreddit forum WallStreetBets successfully manipulated the value of GameStop Inc.’s stock by hundreds of dollars, causing major losses for hedge funds and resulting in large profits for individual investors. Inspired by this success, Reddit users in the similar SatoshiStreetBets subreddit worked to inflate the value of Dogecoin, drastically increasing the monetary value of each Dogecoin. Users were successful in this attempt, pushing the value of a single Dogecoin from less than one cent on January 1, 2021, to a new peak of sixty-nine cents in May of that year. Investors hoped to continue pushing the value of the cryptocurrency, working to inflate its value past $1.00 per coin. Dogecoin reached seventy-four cents in early May 2021, its highest value, only to fall again once media coverage, interest from public figures such as Elon Musk, and the attention of the cryptocurrency community waned. Three years later, in May 2024, Dogecoin was worth sixteen cents. The Dogecoin experience illustrated the ability of social media to influence the public, introduced the world of cryptocurrency to many in the public, and exposed the volatile nature of cryptocurrency.
Bibliography
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