Dogecoin (DOGE): how the joke becomes a worldwide popular cryptocurrency

Dogecoin is the first example of a joke becoming a working currency and keeps holding on the market over a decade. Let’s dive into the history of this crypto and review its preferences and disadvantages.

Actual Dogecoin(DOGE) definition

DOGE was released to the market in December 2013 as a peer-to-peer and open-source coin. It was presented as an alternative cryptocurrency to Bitcoin, also known as altcoin. This coin has the image of Kabosu - a Shiba Inu dog which became popular from a meme. DOGE’s blockchain is based on Litecoin technology. In addition, DOGE uses the Scrypt algorithm which provides you with a low cost and unlimited amount of coins. Take a look at the comparison of SHA-256 and Scrypе:

DOGE principles of work

Dogecoin is a good example of several factors combining with each other to evolve into an efficient operating system. Let’s review these important parts:

1. Proof-of Work (PoW) consensus mechanism which provides miners with a competition for an ability to propose new blocks. SHA-256 was switched on the Scrypt algorithm in 2014 which gave the opportunity to mine DOGE with other coins.
2. Unlimited amount of coins. It rarely occurs with cryptocurrencies, but Dogecoin is an exception. The principle is based on a motivation to use the currency with microtransactions and tipping.
3. High rate of transactions and low fees for them.
4. Community. Even though this crypto has several advantages, it wouldn’t work out if there wasn’t such a committed community. People often use DOGE in charity donations and other social projects which, in fact, improves the crypto state.

DOGE background

In the beginning, Dogecoin was simply a joke.

Billy Marcus and Jackson Palmer decided to link two most discussed topics throughout the net at the time of late 2013: Bitcoin and the “doge” meme of Shiba Inu dog.

But unexpectedly, DOGE became hugely popular with millions of users right from the start. Irony of Dogecoin is about being a full-fledged crypto, operating on its own blockchain and being conceived as a joke.Cost of DOGE is statistically low and is still now: around $0.40 per one coin. In addition, take a look at the coin’s price chart for the last 5 years.

Dogecoin mining process

Miners use a Dogeminer to mine DOGE. It presents a node in the Dogechain( DOGE blockchain).The Dogecoin blockchain releases a specific and constant number of coins per minute. Consequently, the fastest miner who makes these calculations will get the reward. The list below shows the necessary equipment for mining this coin:You have 3 ways to mine Dogecoin:

1. Solo mining.
2. Mining pools. By joining a group of miners. It will increase the possibility of a block reward, but reduce it because the group will split the profit among every participant.
3. Cloud mining. An online data center which becomes available after buying a monthly or a yearly subscription.

Ecosystem

DOGE’s target is to be a fast, low cost, protected and reliable way to transfer assets. The transparency of the system is at maximum levels. The ecosystem of DOGE consists of several important parts:

1. The community. It is the moving force of this coin and people are very interested in future developments. For instance, creating apps for DOGE, which can provide various transactions (payments, charity donations, e.t.c.).
2. The list of available wallets: hardware, desktop, mobile.
3. Many crypto exchanges are able to provide the transactions with Dogecoin.

Reasons to buy Dogecoin

There are several causes to invest in DOGE:

1. Peer-to-peer transactions. High-rate and direct execution of the transfer.
2. Can be used to pay for transaction fees. A good complement which works within the Dogecoin ecosystem.
3. Cashless transfers.
4. Widening of the long-term trading strategies. DOGE can be an addition to the risk management system.

Ways to use DOGE

It’s time to take a look at ways to use Dogecoin:

1. To buy online. Many merchants, companies and retailers get used to this crypto and adapt to the ability of using this coin as a payment method.
2. To tip content creators. Reddit, X (formerly, Twitter), Twitch and e.t.c. are open to this crypto as a donation.
3. To transfer funds to charities and projects.
4. To become a part of an online community. Participants can be rewarded for the executed work or contribution in the social media field.

Comparison of Bitcoin (BTC) and Dogecoin (DOGE)

First of all, DOGE was created as a joke and was imagined to be a light and more friendly version of BTC. Bitcoin has limited supply which is converse to Dogecoin: unlimited supply. It is as good as bad, because DOGE is impacted by inflation. On the other side, BTC is not, because of this limit and consistent halvings which keep the price at the level.However, Dogecoin’s Scrypt algorithm and unlimited supply increase the speed of the transactions which is a good advantage. Even the 3-year old table below of statistics shows that, even though, DOGE is affected with inflation, the overall market cap is not so far from the BTC despite the fact that Dogecoin is a memecoin.

Pros & cons

Now, let’s review the advantages and disadvantages of Dogecoin. Firstly, pros:

1. Volatility of the cost which can benefit if you are intelligent enough.
2. Huge community. It is widely supported.
3. Periodic promotions which have an influence on the valuation.
4. DOGE is respected for its participation in many charity events.
5. Unlimited supply with access to everyone.

Secondly, cons:

• Being a meme. Even now it strongly depends on the popularity and relevance factors. For example, after this single tweet of Elon Musk the price significantly jumped:

• It is affected by inflation because of unlimited supply. The following chart views it:

• The Dogecoin ecosystem improves only digital coin trading.

Concerns about DOGE

Main concern about Dogecoin lies in the assumption: this coin has no utility. It is supported by this crypto initially being just a meme with no blockchain utility whatsoever. In addition, the coin almost always is used as a payment for the blockchain fees.

Q&A

Will DOGE ever be worth $1

It is possible, but there is no guarantee. Dogecoin’s rise and fall are equally possible.

Functions of Dogecoin

It can be used as a payment method with a variety of merchants. Also, DOGE can be a way to tip content creators on several platforms. In addition, a lot of businesses accept Dogecoin.

Realistic potential of DOGE

It is still unknown due to the dependance on several factors: coin developments, market conditions, tendencies and the individuality of the investor.