What Is Dogecoin

Written by

Tamara T.

Crypto Analyst

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What is Dogecoin?

Many people still don't know, so you’re not alone in asking, “what is Doge?”

Altcoins are complicated for people who want to learn more about them and compare their features to the best crypto of all time, Bitcoin.

Our guide is here to provide all the information you need to grasp the basics of Doge before using it in real life.

On this page, we will introduce even more details about the popular coin, including:

  • Dogecoin history
  • Features that provide Dogecoin with value
  • Benefits and drawbacks of the coin
  • Scope of application

Let’s get started!
 

What Is Dogecoin: A Quick Explanation

Before we move to the essence of this guide, we want to know. What is Dogecoin cryptocurrency? 

The answer is quite simple - it is a peer-to-peer crypto with open source protocol. 

It belongs to the group of altcoins, and it emerged in December 2013. Initially, it featured an image of a Shiba Inu as its logo.

But who created Dogecoin?

The founders of Dogecoin are Jackson Palmer and Billy Markus.

The most popular features of DOGE are the scrypt algorithm, low price, and limitless supply.

The technology behind Dogecoin is proof of stake, the same one used by its predecessor, Litecoin.

Dogecoin stands out with a loyal community, and many people use it for different transactions.
 

History of Dogecoin 

You have already discovered who invented Dogecoin, but maybe you want to know more about its evolution.

DOGE has a really interesting history, so you’ll find a lot of useful information about its foundation and functions.

Let's learn more about its early days.

When was Dogecoin created? Dogecoin was created as a joke in 2013 by its inventors, Billy Markus and Jackson Palmer. 

Both of them thought that all cryptos were more jokes than serious things that could change the world.

Jackson launched the Dogecoin.com website while Billy was a software developer at IBM.

They presented Dogecoin on December 6th, 2013, taking inspiration from the popular Doge meme - an image of a Shiba Inu dog with comic sans text appearing as the “thought bubbles.”

Shortly after, Dogecoin became an instant hit and gained incredible popularity on Reddit as a tipping currency. 

Two weeks after its introduction, the token has reached more daily transactions than Bitcoin.

In addition, the first month of its launch saw over one-million unique visitors to its website!

In 2014, Dogecoin Core Development was created, which supported more than 40 contributors who have been working on maintaining and developing the coin.

Dogecoin soon gained a massive community and was the main initiator of different charitable causes.

For instance, in 2014, the Dogecoin community sent 26.5 million DOGE (about $30,000.00) to support the Jamaican bobsled team in participating in the Sochi Winter Olympics.

Then in March of the same year, the DOGE community raised more than 40 million DOGE (about $30,000.00) to support the building of clean-water wells in Kenya.

The most recent move saw the Dogecoin Foundation joining forces with YouTubers MrBeast and Mark Rober to back their TeamSeas initiative. 

The goal was to raise a combined $30 million to remove 30 million pounds of trash from the oceans.

It is also worth mentioning that many people associate the rise of Dogecoin with the online attention from Elon Musk.

The entrepreneur often tweets about this currency, and one of his posts that drew attention was a poll questioning if Tesla should accept Dogecoin.
 

How Does Dogecoin Work

Knowing when Dogecoin was created allows you to delve deeper into the essence of this token.

But “how does Dogecoin work” is one of the main questions today.

Dogecoin operates on blockchain technology that uses a distributed, safe digital ledger to store and add all transactions on the network. That's the same model used by alternative tokens in the market.

The DOGE network also utilizes cryptography to keep all transactions safe.

When it comes to Dogecoin mining, it uses the “proof-of-work” mechanism, where miners utilize computers to solve complicated math equations to process and record transfers on the blockchain. 

As a result, miners receive rewards for their activity in coins so they can sell them on popular exchanges and keep holding them in wallets. 

Understanding Dogecoin wouldn't be possible without knowing the following features of the token.
 

No Maximum Supply

Dogecoin doesn't have a max cap such as Bitcoin. Dogecoin miners get 10,000 DOGE per block, and new blocks appear every minute. 

This results in the production of 14,400,400 new DOGE coins per day, so their owners can either sell them or keep them in their wallets.
 

Decentralization

Decentralization is one of the main features of DOGE. This means that security is in the hands of the people who hold the coin.

The level of decentralization is correlated between the number of nodes on the network and the distribution of miners.
 

Currency in the Hands of a Few

If you're just getting familiar with Dogecoin for beginners, you should know that most DOGE wallets have a huge amount of tokens in circulation. 

This is an enormous risk as they have full control over prices, fluctuations, and overall liquidity. 

You should also know that about 0.002% of wallets supply almost two-thirds of all DOGE. 

This differs from Bitcoin, where you'll see an even distribution. 
 

Real Benefits of Dogecoin

Creating a Dogecoin guide wouldn't be possible without taking a look at its benefits and drawbacks.

Let’s first take a look at DOGE benefits.
 

Transaction Time & Fees

Transactions with Dogecoin are ten times faster than BTC transfers, and the fees are lower if you compare the two cryptos. 

Thanks to the decentralized nature, your transactions are not under the control of banks or other centralized authorities.  

This makes DOGE a perfect choice for investors looking to buy crypto.
 

Support from the Community

Dogecoin has a great community of users.

Many people benefit from crypto and engage in active trading on exchanges.

You will also see many of them sharing news and updates about the token and its development.

Elon Musk is one of the most popular supporters of DOGE. He regularly tweets about it, pushing the token's price even more.

Mark Cuban and the Dallas Mavericks (NBA team) have also supported the token.
 

Wide Availability

Dogecoin is a widely available option on crypto exchanges, so you can trade and invest in it.

The purchasing process is simple, so you can immediately start with the first transactions.

As DOGE prices fluctuate, you can trade crypto by checking the charts and price trends and earn profits.
 

Real Drawbacks of Dogecoin

Dogecoin is, undoubtedly, one of the best coins in the market.

However, it isn’t perfect, so paying attention to its drawbacks makes sense.
 

It Relies on Fun Rather Than Innovation

When you hear news about Dogecoin, you won't learn anything new.

Everything revolves around the initial joke, which was the main motive for the Doge's creation.

The price depends on how many fans wish to trade the crypto.

All these should be warning signs for people looking to invest in cryptocurrency.
 

Manipulation of the Price

Dogecoin price is under the influence of different factors. This includes manipulation via pump-and-dump schemes, volatility, and tweets. 

Many people still consider it a joke, which makes it an even more speculative option.

Pumping is an activity where a group of people buys a large number of coins. 

This pushes the price of assets. As soon as the assets reach a significantly higher value than they've paid for, holders release coins to other customers to get returns.

People should also be aware that Dogecoin still faces some scalability issues, despite being more competitive than BTC in terms of fees and transaction costs.
 

Unlimited Supply

Dogecoin doesn't have a maximum supply like Bitcoin.

There is an indefinite amount of coins that you can mine or purchase.

The coin's inflationary nature means it's not the best option to store value.
 

Dogecoin Price History

When looking at the  elements that affect Dogecoin going up or down, its value depends on different factors such as news, developments, market situation, the flow of cryptocurrency on popular exchanges, and the global economic situation. 

Thanks to the increasing adoption of DOGE, more people will start to use it as a payment option, and the overall demand will rise even more. 

This will also boost the coin's price and total market cap

Do you wonder, “what is the current price of Dogecoin?” 

At the moment of writing, the Dogecoin price is $0.08978128, and its 24-hour trading volume is $ 523.76M.

But how has the price of the coin changed in the past?

The crypto’s price went up over 300% after appearing in 2013. The same trend continued in the upcoming years and reached $0.0170 at the beginning of 2018. 

This was the first time the coin crossed a market limit of $2bn.

In early 2021, the coin’s price rose more than 8,600% between January and May. 

The reason for this was the incredible attention from social media alongside the mentions from industry leaders such as Elon Musk and Mark Cuban. 

DOGE hit an all-time high of $0.7376 on May 8 2021, resulting in a market cap of more than $70bn.

Dogecoin's price rose 30% to $0.2175 in December 2021 after Musk unveiled that his company Tesla would start accepting the token as a payment option.

2022 started very well for the coin, which quickly rose over 57% between January 10 and January 14. 

However, the rise was temporary, and Dogecoin lost 45% of this value to reach the current price.

The value of Dogecoin continued to decrease in 2022, as the war between Russia and Ukraine caused fear and uncertainty in the cryptocurrency market.

As soon as Elon Musk decided to acquire Twitter for $44 billion in October 2022, DOGE rose 150% from $0.06 to $0.015.

All these figures show how volatile this token can be, so you may want to think twice before choosing it for future transactions.

How Many People Own Dogecoin?

After you've learned “what is Dogecoin” and “how does it work,” you may want to know how many people hold this coin.

The decentralized nature of crypto means it is hard to say who is the biggest owner of the DOGE.

However, we can find information about the largest Dogecoin wallets.

According to data by intotheblock, we can find seven top holders of the popular coin as of 29 July 2022.

The same source says that the biggest DOGE owner holds 30.16% of the total crypto supply.

At the time of writing, the top balance of the top holder was 38.43 bn DOGE coins, and the address with this amount is DPDLBAe3RGQ2GiPxDzhgjcmpZCZD8cSBgZ. 

The second biggest owner of the coin holds 5.35% of the total supply or 7.56bn DOGE coins at the time of writing.

What Is Dogecoin Used For? 

If you are ready to use Dogecoin for daily transactions, you should learn about possible ways to do this:

  • Direct payment to merchants that accept DOGE online or in-person
  • Using DOGE like cash via cards
  • Purchase gift cards with Dogecoin and use them at leading companies such as Amazon or Walmart
  • Send P2P payments through the crypto wallet

As for the companies that accept Dogecoin as the regular payment method, you can use it for services from Twitch, ExpressVPN, NameCheap, Sling TV, Air Baltic, Tesla, and many more.

What Is the Future of Dogecoin?

So, what is the future of Dogecoin?

While Dogecoin was considered a parody of other more valuable cryptos, it has become incredibly popular and earned massive capitalization.

The DOGE network will continue to be the onramp for people seeking investment opportunities. It will also continue to popularize meme coins among potential investors.

Regarding DOGE price predictions, we should remember that cryptocurrencies are extremely volatile.

This makes it difficult to predict the future price of tokens both on a short-term and long-term level.

Even if we see different forecasts from analysts, we should take them with reserve. 

Finally, before you decide to invest in crypto, you have to do research!

Check the latest crypto trends, news, technical analysis, and expert opinions, and make decisions based on all these factors.

Past results are not a guarantee of future gains!

All in all, we can't deny DOGE's potential, but it still needs to prove its worth and get more traction from the community.