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From The Olympics to NASCAR … Why is Dogecoin so Popular?
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The recent events that led to the astronomical growth of Dogecoin ( DOGE) have undoubtedly brought popularity to the coin itself and to the community that has formed around what has been referred to as a “meme-coin”. The cryptocurrency originally created for fun and the community that formed around it have greatly influenced the development and popularization of decentralization.
In today’s article, we will talk about the reasons behind the popularity of Dogecoin and consider the impact of the events that led to the astronomical growth of the coin throughout its existence.
Why the dog(e)?
Dogecoin is a cryptocurrency founded by programmer Billy Marcus, who created a modified Litecoin wallet – dogecoin-qt, and Jackson Palmer, a former marketing manager at Adobe. According to the developers, the purpose of the coin was to enable simple, inexpensive, and speedy transactions.
Dogecoin is based on Luckycoin, which in turn was a fork of Litecoin. The cryptocurrency utilizes the proof-of-work (PoW) algorithm and has no total supply limit. The lack of a coin minting limit allows the system to maintain roughly 100 billion DOGE in circulation, which ensures constant interest towards mining and securing the blockchain.
The symbol of Dogecoin – Shiba Inu – is a Japanese breed of dog that was popularized as an online meme and represents the attitude of the creators to the cryptocurrency during the early times. The project quickly began to develop and during the six years of its existence it went up in value by more than 200 times.
The first victories
In early December 2013, DOGE rose in price more than three-fold amid China’s new policy on cryptocurrencies and the People’s Bank of China’s recommendations to financial institutions to ban bitcoin trading. After its initial explosive growth, the coin subsequently lost more than 80% of its value.
In early December 2013, the coin came into the cryptocurrency community spotlight when users of a Dogecoin wallet were hacked for about 21 million DOGE, which at the time of the event amounted to about $13,000 USD with DOGE price fluctuating around $0.0006.
After its first plunge, the coin rose in value again as early as mid-December. The increase in price was almost 600%, and the value of the coin was estimated at $0.00151.
The main advantages of DOGE are the low cost and high speed of network transactions. The network fee is always one DOGE regardless of the transferred amount. This is one of the reasons why DOGE is often used to transfer funds between exchanges.
Initially, DOGE issuance was limited to 100 billion coins; but, due to a large number of pre-mined coins and low mining requirements, the number of minted coins reached 98 billion in 2014. For this reason it was decided to get rid of the issuance limitations and today there are about 128 billion coins in circulation, while the number of mined coins rises by 5% every year.
The Dogecoin community is one of the most active in the cryptocurrency space. The Dogecoin subreddit has over 800,000 participants which actually became the basis of The Dogecoin Foundation – a nonprofit organization designed to popularize the cryptocurrency and make it accessible and attractive to use through charity events.
In 2014, the foundation managed to raise about $55,000 of the required $120,000 to support the Jamaican bobsleigh team at the Sochi Olympics. Ironically, the team ended up finishing in last 29th place.
The Dogecoin Foundation’s next project was aimed at helping a remote region of eastern Kenya affected by drought. The Dogecoin Foundation, together with the nonprofit charity organization Charitywater, was able to raise 40 million DOGE (or about $30,000 USD at the time).
Also, in 2014, the community raised about $55,000 to fund a NASCAR driver who raced a “Moonrocket” with the Dogecoin logo in a number of events.
While Dogecoin was seen as a joke in its early days, today it is:
- A coin with a market cap of nearly $4 billion;
- A community of 800,000 members;
- A cryptocurrency that is presented on the largest exchanges;
- A popular means of payments and transfers.
Along with this, the Dogecoin ecosystem consists of a huge number of wallets, coin pools, and individual miners. There have also been attempts to develop bridges to use Dogecoin with other blockchains.
Such a project was Dogethereum, a payment network that used smart contracts and made it possible to execute simple and affordable payments as well as move funds between the Dogecoin & Ethereum blockchains. Such bridges could potentially be used to scale participating blockchains.
However, with the drop of ETH’s price to $100 per token in 2018, the project ran out of funds and shut down. Currently there is no information about further developments.
The biggest dog rally
In 2017, during the ICO-boom, Dogecoin rose by 80,000 percent in a single year, reaching $0.018 on some exchanges just to lose more than 80 percent of its value thereafter.
But despite this drop, at the beginning of 2021 the price of Dogecoin set a new ATH, nearing 5 cents per meme-coin. The rise in price was attributed to Elon Musk’s tweet, which reminded his followers of his support for Dogecoin, followed by a pump from WSB subreddit participants who decided to dive into crypto after disturbing the traditional financial markets.
Dogecoin is a convenient means of paying for content on social media as well as a means of donating and initiating transfers. Moreover, it has recently gained tons of community support.
Dogecoin is certainly a project with an interesting history. The impact of the meme-based digital coin on shaping the entire cryptocurrency market has also attracted a huge amount of attention from users unfamiliar with cryptocurrencies. Dogecoin, being a joke, has become a legend of the crypto space… leaving its mark in the history of digital currencies.