What started as a playful joke between two software engineers in 2013 has now become a cryptocurrency boasting a staggering $82 billion market cap at its peak in May 2021.
Dogecoin, the quirky digital currency that features a Shiba Inu as its mascot, owes much of its success to Elon Musk.
But regardless of how it got where it is, Dogecoin has caused some serious ripples in the crypto space!
It’s classed as a meme coin - any coin that is based on a meme.
Dogecoin is based on the Doge meme that first became popular around 2013.
Other meme coins include Shiba Inu, Floki, and GM Wagmi.
Interestingly, all of the top meme coins by market cap are based around the doge theme, with Dogecoin as the current king.
Even more incredibly, it's the 8th biggest cryptocurrency overall.
But that is all about where it is now... what about in the past?
Let’s do a brief dive into Dogecoin history
So in 2013, Jackson Palmer, a product manager from Adobe, posted a tweet.
It was a light-hearted swing at the crypto-craze back in those days.
His point was about how easy it would be to launch a cryptocurrency and how literally anybody could come up with one.
By tweeting about this not-yet-existing coin, he started something that soon took on a life of its own.
Shortly after that tweet, he bought the 'dogecoin.com' domain name.
He then photoshopped a picture of the doge meme on a coin for the logo.
It quickly went viral on Reddit and caught the eye of Bill Markus, a software engineer from IBM.
He reached out to Jack, and together, they launched Dogecoin.
Little did they know that a few years later, the then-richest man on the planet would start casually hyping up their coin.
But more on that in just a bit.
Now, let's talk about how Dogecoin works
The founders of Dogecoin didn't put too much thought into the tokenomics of the system - or how tokens were to be created in the project.
This is because, as mentioned before, it was intended to be a joke.
It started off with 100 billion coins in total.
Today, there are around 140 billion Dogecoins currently in circulation.
Every year 5.5 billion more coins are added!
This makes the supply limitless and is known as an inflationary model.
Producing such a large number of coins is why the price of Dogecoin has always remained under a dollar.
At this point, Dogecoin would need to have a market cap of around $150 billion to cross the $1 mark, about 15 times its current market cap.
And even though Dogecoin may be hyped right now, it's going to need a tonne more to ever get anywhere near that figure.
But that raises a curious question about Dogecoin’s fame...
Why is Dogecoin so popular anyway?
The short answer is two words: Elon Musk.
Sure, it may be a little simplistic, but it's not too far from the truth.
If you look at the price chart for Dogecoin, it usually goes up or down because of two things:
The first is Elon's tweets and comments about cryptocurrencies and Dogecoin in particular.
And the second is the overall situation of the crypto market.
As such, it could be argued that Elon is the primary reason Dogecoin is as relevant as it is today.
He started tweeting about the coin back in 2019 and hasn't really stopped influencing it since.
There’s a great example of this in 2023.
In early April 2023, Elon changed the Twitter symbol from the iconic blue bird to the Dogecoin symbol.
Understandably, this caused a significant rise in the price of Dogecoin.
Elon has also done other random things, like posting a picture of a rocket with the Doge symbol edited on it, again moving the Dogecoin market.
He even allowed people to use Dogecoin to buy Tesla products.
All of this makes it clear why Elon Musk a huge force behind where Dogecoin is today.
Of course, other than Elon's support, Dogecoin's popularity among ordinary people is probably because of its meme-ology.
Most people seem to like the fact that it can be treated as more of a joke than something serious.
So, that's the gist of why Dogecoin is where it is in terms of popularity.
But what does it actually do besides being a meme?
Here are some of Dogecoin’s Utility Cases
Strictly speaking, Dogecoin was not supposed to be a functional currency.
It did not act as a medium for gas fees or help with smart contracts or anything like that.
Those are all features that you would expect from a currency designed to have actual utility.
But as the coin became popular, there are some uses that popped up as its ecosystem developed.
The first utility is simply for Dogechain transactions.
Dogechain is a blockchain layer built for the sole purpose of adding more utility to the Dogecoin ecosystem.
It is built on Polygon, the same network that has provided scaling solutions for Ethereum, Dogecoin's parent blockchain.
However, it is not a project of the Dogecoin Foundation or its founders.
Instead, it indirectly uses Dogecoin to enable smart contracts.
If you use Dogechain in any way, you can use your $DOGE to pay for transaction fees and operate on the chain.
Another way Dogecoin is used is for making payments online.
Like every other cryptocurrency, people can use Dogecoin to make payments if vendors support it.
Some Tesla products, as we mentioned, do allow users to pay via Dogecoin.
Other popular companies that allow payment via Doge are Twitch and Microsoft.
There's also the even the Doge Card, a Visa Card that gives you Dogecoin rewards on every purchase!
At the moment, the project is even trying to get Starbucks to accept Dogecoin as a payment method.
One more further usage is Dogecoin Investment.
Cryptocurrencies are famous for making people rich kind of overnight.
The majority of investors do it hoping that they will benefit from it later.
A popular example of this from Dogecoin is the "SlumDOGE millionaire," someone who became a millionaire off of his investment in Dogecoin back in 2021.
In this sense, Dogecoin is no different.
Investors will always look for returns - regardless of where they come from.
Another important utility is supporting projects and causes
Last but not least, the Dogecoin community has used Dogecoin to support projects in the past.
The American Cancer Society accepts Dogecoin for donations, for example.
The community has also donated tens of thousands of dollars to different charitable causes.
These include the Kenyan water crisis, sponsoring athletes from third-world countries, and more.
Conclusion
So that’s Dogecoin, starting as a playful joke in 2013 but now transformed into a huge cryptocurrency.
In this article, you saw that a major part of Dogecoin's popularity comes from Elon Musk, the tech entrepreneur who frequently endorses it.
You also learned about Dogecoin’s real-world utilities, making it more than just a fun internet phenomenon.
It's used for transactions on Dogechain, making online payments, and even as an investment asset.
Lastly, one of the unique aspects of Dogecoin is its charity efforts.
The Dogecoin community continues to show how digital currencies can make a positive impact in the world.
Dogecoin's story shows you that humor and internet culture can blend with the world of finance in unpredictable but significant ways.
From its start as a meme to a major cryptocurrency, Dogecoin is a fascinating part of digital currency history.
That’s it for this article. Hope it proved useful - and I’ll talk to you soon!
