Summary

Dogecoin initially started as a satirical cryptocurrency and featured the likeness of a Japanese Shiba Inu dog as its logo. The dog itself became an internet meme, the ‘Doge meme’ which was widely popular at the time. The coin was officially launched on December 6, 2013 as a Litecoin-derived cryptocurrency. It quickly adopted a cult following to reach a market capitalization of USD $ 60 million by 2014. The coin became a powerful rating system aside from any real commercial applications whereby participants can ‘tip’ others with Dogecoin for posting valued content across different social media platforms.

Distribution

Dogecoin has an unlimited supply schedule, with faster block rewards than other altcoins such that by 2015, 100 billion coins had been mined. To date, the current circulating supply is around 116 billion.

Company Foundation

Mission

Dogecoin is the brainchild of programmer Billy Markus and former member of Adobe Systems, Jackson Palmer. The goal for Markus was to create a cryptocurrency with a wider demographic than Bitcoin. For palmer, the project started off as an online challenge by one of his students who approached him via Twitter to make the idea come to life. Palmer purchased the dogecoin domain and designed the interface. What started as a meme, snowballed into a project with considerable money behind it, ultimately succeeding in achieving the goal laid out by both Markus and Palmer, which was to create a widely popular cryptocurrency with adherents around the world.

Technical Design

Summary

The DOGE token is a Litecoin derived cryptocurrency that was mirrored off an existing project (Luckycoin) by developer Bill Markus. Luckycoin used a randomized reward that was received for block mining. This was later changed to a static block reward in 2014. Being a Litecoin token, it (like DOGE) also uses Scrypt technology to undergird its proof-of-work algorithm. Scrypt makes it difficult to implemented mining such as with SHA-256 bitcoin mining equipment, and that ASIC devices intended to mine Dogecoin would be difficult to create.

Algorithm and Functionality

Dogecoin is built on Scrypt like Litecoin or Luckycoin. Like Bitcoin’s proof-of-work, miners are required to solve hash functions in order to receive block rewards. Scrypt is also memory-intensive, with randomly generated numbers required for solving hash functions also stored in the processor’s RAM. This needs to be accessed non-stop before a result can be submitted. Scrypt also has a lower hash rate than the SHA-256, which is why Dogecoin has faster block rewards than other cryptocurrencies. For example, Dogecoin’s block time is only one minute, compared to Litecoin’s two and a half minutes.

Dogecoin was also built on Scrypt as a way to dissuade people from using ASIC’s to mine it. As time progressed, the ASIC-resistance of Litecoin, and projects like Dogecoin built on the blockchain has begun to dwindle away.

Economics

Summary

Dogecoin was never intended to be taken as a real currency, however it rode the crypto wave in late 2017, and by January 2018, had reached a total market capitalization of USD $ 2 billion. The popularity of the coin, along with its faster block reward made it a popular mining project for millions. Dogecoin mining profitability depends on whether you mine solo or in a pool, alongside the ASIC, GPU, or CPU miner that is used, and also the software underlying it. For example, popular miners include Bitmain’s Antminer L3, or the very high end BW L21 Scrypt Miner. CudaMiner, and Multiminer are among the most popular software for either Bitmain or Nvidia products.

Adoption

There are several notable moments throughout Dogecoin’s short life span. Among initiatives, the foundation encourages charity and involvement, with the community successfully raising almost USD $30,000 worth of Dogecoin to send the Jamaican Bobsled Team to the Sochi Winter Olympics in 2014. That same year, Dogecoin Foundation organizer Eric Nakagawa successfully campaigned to raise funds to build a well in the Tana River in Kenya before World Water Day that March. Doge4Water successfully met their goal of raising USD $40,000, with one anonymous donor reportedly giving one fourth the total amount. In 2015, the community raised around USD $55,000 to help sponsor NASCAR driver Josh Wise, who competed with a Dogecoin/Reddit sponsored helmet and kit at the Aaron’s 499 at the Talladega Superspeedway.