The users themselves call it “joky”. One of the most popular uses of the coin is the reward of Internet users for interesting and quality content created or shared by them. It was introduced on December 8, 2013.
Compared to other cryptocurrencies, Dogecoin has a fast initial coin production schedule: there will be approximately 100 billion coins in circulation by the end of 2014 with an additional 5.2 billion coins every year thereafter.
While there are currently few commercial applications for the coin, the currency is gaining traction as an Internet tipping system, in which social media users grant Dogecoin tips to other users for providing interesting or noteworthy content.
Many members of the community, as well as members of other cryptocurrency communities, use the phrase “To the moon!” to describe the overall sentiment of the coin’s rising value.
What is Dogecoin?
Like in Bitcoin and Litecoin, in Dogecoin the public key cryptography is used, where a user generates a pair of cryptographic keys: a public one and a closed one. Only a closed key can decode the information encrypted with a public key; this is why the keys’ owner can freely publish the public key without worrying about the encrypted data.
The mining differs from Litecoin in several parameters. A new block in the Dogechain is created in 1 minute unlike 2.5 minutes for Litecoin. Today, the mining complexity is reappointed once per block and the reward for miners is fixed. However, from the very beginning, the complexity was changed once per four hours and the reward was a random number between 0 and the maximum determined by the block parameters.
In the course of time, the approach to the emission of coins has been changed as well. First, they wanted to limit it to 100 billion tokens but then the issue of new coins became non-limited.
Dogecoin was created by programmer Billy Markus from Portland, Oregon, who hoped to create a fun cryptocurrency that could reach a broader demographic than bitcoin. In addition, he wanted to distance it from the controversial history of other coins, mainly bitcoins. At the same time, Jackson Palmer, a member of Adobe Systems’ marketing department in Sydney, Australia, was encouraged on Twitter by a student at Front Range Community College to make the idea a reality.
After receiving several mentions on Twitter, Palmer purchased the domain dogecoin.com and added a splash screen, which featured the coin’s logo and scattered Comic Sans text. Markus saw the site linked in an IRC chat room and started efforts to create the currency after reaching out to Palmer. Markus based Dogecoin on the existing cryptocurrency, Luckycoin, which features a randomized reward that is received for mining a block, although this behavior was later changed to a static block reward in March 2014. In turn, Luckycoin is based on Litecoin, which also uses Scrypt technology in its proof-of-work algorithm. The use of scrypt means that miners cannot use SHA-256 bitcoin mining equipment, and that dedicated FPGA and ASIC devices used for mining are complicated to create. Dogecoin was officially launched on December 6, 2013. The Dogecoin network was originally intended to produce 100 billion tokens, but later, it was announced that the Dogecoin network would produce infinite tokens.
On December 19, 2013, Dogecoin jumped nearly 300 percent in value in 72 hours, rising from the US $0.00026 to $0.00095, with a volume of billions of coins per day. This growth occurred during a time when bitcoin and many other cryptocurrencies were reeling from China’s decision to forbid Chinese banks from investing Chinese Yuan into the bitcoin economy. Three days later, Dogecoin experienced its first major crash by dropping by 80% due to large mining pools seizing the opportunity in exploiting the very little computing power required at the time to mine the coin.
On December 24, 2013, The Reserve Bank of India cautioned users of Dogecoin and other cryptocurrencies on the risks associated with them. On December 25, 2013, the first major theft attempt of the coin occurred when millions of coins were stolen during a hacking attempt on the online cryptocurrency wallet platform Dogewallet. The hacker gained access to the platform’s filesystem and modified its send/receive page to send any and all coins to a static address. This incident spiked Tweets about the coin making it the most mentioned altcoin on Twitter. To help those who lost funds on Dogewallet after its breach, the Dogecoin community started an initiative named “SaveDogemas” to help donate coins to those who lost them. Approximately one month later, enough money was donated to cover all of the coins that were lost. By January 2014, the trading volume of the coin briefly surpassed that of bitcoin and all other crypto-currencies combined, Dogecoin has a market capitalization of USD 13.5 million. April 2015 Jackson Palmer announced he is taking an “extended leave of absence” from the cryptocurrency community.
Dogecoin Blockchain and Block schedule
Block numbers Per-block reward First block Expected coins produced (approx.) Expected total circulation (approx.)
Mining Dogecoin and Mining Pools
Dogecoin’s implementation differs from Litecoin by several parameters. Dogecoin’s block time is 1 minute as opposed to Litecoin’s 2.5 minutes. The difficulty retarget time is once per block and the reward is fixed based on the block schedule listed below. However, when Dogecoin was first introduced, the difficulty retargeting was once every four hours, and the reward was a random number between 0 and a maximum defined by the block schedule. Under the system in which a random number of coins were distributed, rewards were calculated using a Mersenne Twister pseudo-random number generator. While the original implementation of Dogecoin meant for there to be a fixed number of coins per block from block 600,001 onwards only (providing 10,000 coins per block), the algorithms in Dogecoin were changed beginning from the 145,000th block so that a fixed reward was always given (providing 250,000 coins per block until block 200,001).
On March 12, 2014, version 1.6 of the Dogecoin client was announced. Along with allowing for there to be a fixed reward per block, the new client update also introduced a new difficulty algorithm called DigiShield. The main goal of the new difficulty algorithm, adopted from DigiByte, was to prevent multipools from being able to mine (and thereby profit) off the coin, reducing the price of the coin drastically, along with forcing single-coin miners to deal with the rise in difficulty the pools left in their wake. Thanks to the algorithm’s near-instant change in difficulty, any multipool entering the Dogecoin network will immediately leave, as the difficulty of mining will spike upwards severely, causing a drop in profitability and, ultimately, an absence of multipools.
Several cases of using employer or university computers to mine Dogecoin have been discovered.
Where to buy DOGE — Dogecoin Exchanges?
Several online exchanges offer DOGE/BTC and DOGE/LTC trading. Three exchanges, Mengmengbi, Bter, and BTC38, offer DOGE/CNY trading. On January 8, 2014, AltQuick.co was the first exchange to launch DOGE/USD exchange. On January 30, 2014, Canada-based exchange Vault of Satoshi also announced DOGE/USD and DOGE/CAD trading. On February 2014, Hong Kong-based exchange Asia Nexgen announced that they would support the trading of Dogecoins in all major currencies. China-based exchange BTC38 also added their support on the Dogecoin exchange, boosting the market capitalization over 24 hours. In the first day of trading, Dogecoin was the second-most traded currency on the platform, after BTC.
On September 2014, UK-based exchange Yacuna began offering DOGE/EUR and DOGE/GBP trading.
On January 31, 2014, trading volume across the major exchanges was valued at $1.05 million USD. The market cap was the US $60 million. Three exchanges accounted for the majority of volume: Bter (60%), Cryptsy (23%), and Vircurex (10%). The most traded currency pairs were DOGE/BTC (50%), DOGE/CNY (44%) and DOGE/LTC (6%).
Trading physical, tangible items in exchange for DOGE takes place on online communities such as Reddit and Twitter, where users frequently share currency-related information. On December 23, 2013, Tristan Winters of the online journal Bitcoin Magazine discussed what was needed for Dogecoin to replace bitcoin.
The first Dogecoin ATM was demoed at Coinfest in Vancouver in February 2014. Two bitcoin ATMs supporting this coin and other altcoins opened in Tijuana, Mexico on March 17, 2014.
The coin has also been used to try to sell a house and has been used in the pornography and poker industries.
Weather forecasting mobile app, web application, and website Doge Weather’s” creators Katia Eirin and Bennett Wong request tips in Dogecoin to maintain their website.
Dogetipbot was a cryptocurrency transaction service used on popular sites like Reddit and Twitch.tv. It allowed users to send Dogecoins to other users through commands via Reddit comments; support for Twitch.tv and Twitter had been discontinued earlier. The service was launched in 2013 on Reddit. The trademark “dogetipbot” was officially registered on August 19, 2014. In November 2014, the developer team behind dogetipbot raised $445,000 in venture capital funding. In May 2017 Dogetipbot was discontinued and taken offline after its creator declared bankruptcy; this left many Dogetipbot users losing their coins stored in the Dogetipbot system.
Over the years, many different tipping services have been created.
Dogecoin wallets come in a variety of forms designed for different types of devices. There are five main types: a boot program-wallet on a computer, mobile version, web application, paper, and portable. Here is a list of wallets with a user — friendly interface and for safe storage of Doge:
- MultiDoge — Dogecoin wallet program, imported with a MultiBit Bitcoin client. This is a lightweight version of the wallet, so it only needs to be “synced” via blockchain before it becomes active for use. This instance performs the synchronization process very quickly. But the wallet should only be for normal use. There are versions for operating systems (Windows, Mac OS X, Linux).
- Wowdoge — this is the Lite version of software-defined storage for coins Doge, with small-time synchronization in the Blockchain. It is functional, has a clear graphical interface and is easy to use. There are versions for operating systems (Windows, OS X, Linux) and the source code of Github.
- Dogecoin Core is the full official version of the Doge wallet. Initial synchronization with the blockchain is slow compared to lightweight versions, and it will take a lot of free space on the PC to install the Program. There are versions for operating systems (Windows, OS X, Linux, Android, Blackberry, Browser, Source, IOS).
- DogeChain is a free online version of the Dogecoin wallet. On the website, you can register and get the address of logicon. Without installation and long synchronization with the Blockchain, you can start using it.
Also, you can use hard wallets such as Ledger and Trezor, and Coinomi mobile multi-currency wallet.
Exchanges with Dogecoin listed
- Changelly (fiat and crypto)
- Kraken (fiat and crypto)
- Poloniex (crypto)
2014 Winter Olympics
The Dogecoin community and foundation have encouraged fundraising for charities and other notable causes. On January 19, 2014, a fundraiser was established by the community to raise $50,000 for the Jamaican Bobsled Team, which had qualified for, but could not afford to go to, the Sochi Winter Olympics. By the second day, $36,000 worth of Dogecoin was donated and the Doge to Bitcoin exchange rate rose by 50%. The Dogecoin community also raised funds for a second Sochi athlete Shiva Keshavan.
Inspired by the Winter Olympics fundraiser and smaller charity fundraising successes, the Dogecoin Foundation, led by Eric Nakagawa, began collecting donations to build a well in the Tana river basin in Kenya in cooperation with Charity: Water. They set out to raise a total of 40,000,000 ($30,000 at the time) Dogecoin before World Water Day (March 22). The campaign succeeded, collecting donations from more than 4,000 donors, including one anonymous benefactor who donated 14,000,000 Dogecoin (approx. $11,000).
On March 25, 2014, the Dogecoin community successfully raised 67.8 million Dogecoins (around $55,000 at the time) in an effort to sponsor NASCAR driver John Wise. Wise ran with a Dogecoin/Reddit-sponsored paint scheme at the Aaron’s 499 at Talladega Superspeedway On May 4, 2014, Wise and his car were featured for nearly a minute, during which the race commentators discussed Dogecoin and the crowdfunding effort while finishing twentieth and narrowly avoiding multiple wrecks. On May 16, 2014, Wise won a spot at the Sprint All-Star Race through an online fan vote beating household name Danica Patrick, largely due to the efforts of the Reddit community. He finished the race in fifteenth, the last car running. The following race in the Coca-Cola 600, Wise debuted a Dogecoin/Reddit.com helmet. Wise later announced he would run the car again at the Toyota/Save Mart 350 as a thank-you gift to the community and the GEICO 500. He finished twenty-eighth in the race due in part to a refueling issue; he was in twelfth place after a gas-and-go pit stop, but the gas can do not engage long enough, resulting in a second pit stop that took him towards the back of the pack. The developer of the NASCAR ’14 video game announced that they are looking into adding the Dogecoin car as a drivable car in an upcoming DLC.
Unlike deflationary cryptocurrencies (like Bitcoin), there is no limit to how many Dogecoins can be produced. This puts Dogecoin in the same league as other inflationary coins. According to the current production schedule, approximately 98 billion coins have been released by February 2015, with block 600,000 mined on February 25. Thereafter, approximately 5.256 billion more coins will be produced per year, in perpetuity. This represents an inflation rate of 5.256% (in 2015), that will decay over time due to new coins being introduced into the economy (e.g. in 2025 yearly inflation rate will be 3.4%, in 2035 2.5%, etc…).
During December 2013 and January 2014, Dogecoin’s developers discussed in public forums whether the inflation rate should be changed and, on February 2, 2014, Dogecoin founder Jackson Palmer announced that the supply of coins would remain uncapped, resulting in the constant reduction of its inflation rate over a long time.
This work is licensed under a Creative Commons Attribution-ShareAlike 3.0 Unported License.
Originally published at https://cryptonomad.info on June 20, 2019.