Dogecoin started as a joke. In 2013, it was created by Billy Marcus and Jackson Palmer to poke fun at Bitcoin. It even chose a popular meme, doge, as its logo. However, Dogecoin became the fifth-largest cryptocurrency by market cap in 2021. The question is: how did this happen?
What is Dogecoin?
According to the Dogecoin website, Dogecoin is an open-source peer-to-peer digital currency, favoured by Shiba Inus worldwide. It sets itself apart from other digital currencies with a vibrant community made up of friendly folks just like us.
It works in the following way. Dogecoin runs on blockchain technology. All holders carry an identical copy of the Dogecoin blockchain ledger. Miners use computers to solve complex mathematical equations to process transactions and record them on the Dogecoin Blockchain. In exchange for processing transactions and supporting the blockchain ledger, miners earn additional Dogecoin.
The Joke
The joke is not the fact that there are more than 129 billion Dogecoin. The joke is that Dogecoin’s creators wanted it to be one. That’s why Dogecoin’s past is filled with well-intended publicity stunts. For example, 26mln were raised in Dogecoin to help propel the Jamaican bobsleigh team to the 2014 Winter Olympics.
Dogecoin also sponsored Josh Wise in NASCAR Cup Series races. Because of Dogecoin’s popularity, Wise was voted into the 2014 All-Star Race by fans, particularly those on Reddit.
However, Dogecoin proved to be more than just fun and memes. It exploded in value and gained more than 5,000% in 2021. How did it move from a joke to a valid investment option?
Celebrities’ Support
Glauber Contessoto claims to have become a Dogecoin millionaire on April 15. His motivation the Doge meme and, also, the endorsement of one and only, Elon Musk. CEO of Tesla and the online community’s favourite, Elon, supported Dogecoin on social media with a series of tweets.
He even called the Dogecoin the ‘people’s crypto’. On that basis, the popularity of Dogecoin is explained in the following manner: “Bitcoin is for the wealthy, Ethereum for the middle class, and Dogecoin is for the people.”
Additionally, Snoop Dogg and Gene Simmons endorsed the Doge crypto on Twitter. Snoop Dogg called himself Snoop Doge and Gene Simmons called himself God of Dogecoin. Elon Musk posted a meme from Lion King with Snoop Dogg and Gene Simmons. This alone caused the Doge crypto to jump four spots.
Dogecoin vs Bitcoin
Putting all jokes aside, Dogecoin is a cryptocurrency like Bitcoin and people invest their very real money in it. Billy Markus said that he went through Bitcoin’s coding and simply removed anywhere it said Bitcoin and added Dogecoin. This makes these two cryptocurrencies similar.
However, their aims were different as they were created. One had noble ideas of creating a financial system without relying on financial institutions, the other was born out of a joke. Also, Bitcoin has a limited supply of 21 million tokens while Dogecoin does not. What it means is that as long as miners continue to build the blockchain, more Dogecoin will continue to wink into existence.
On the other hand, Dogecoin reduced block times compared to Bitcoin (1 min to 10 min). For some, it also demonstrates a will to help those around you and bringing a more lighthearted approach to finances.
Conclusion
Dogecoin is an interesting phenomenon that seems like the perfect representation of Generation Z. The meme became a cryptocurrency. The need to criticize something became the global movement. The same joke helped many people and provided others with extra cash.
However, just like the creators intended, Dogecoin is just a funny thing to invest in when you have some spares. After all, the doge is very cute. However, more than anything, it should serve as a reminder to be more careful with our investments as they can be very unpredictable.
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