What is Dogecoin (DOGE)?

What is Dogecoin?

Dogecoin is an open-source cryptocurrency named after the doge internet meme, which features Kabosu, a Shiba Inu hunting dog from Japan.

Dogecoin is a fork of the cryptocurrency Luckycoin, itself a fork of Litecoin. A key feature of DOGE is merged mining via Auxiliary proof-of-work (AuxPoW).

The move to AuxPoW was proposed by Litecoin founder Charlie Lee in 2014 as a mechanism to increase resistance to a 51% attack for both networks. As a result, by July 2019 almost 90% of Dogecoin’s total hashrate was accounted for by the largest Litecoin mining pools.

As of April 2024, DOGE has no supply cap; fixed annual inflation is 5.2bn coins (~3.6%).

Who created Dogecoin, when and why?

The Dogecoin network launched on 27 November 2013, created by Australian Jackson Palmer, a sales employee at Adobe Systems, who set out to poke fun at the rapid proliferation of cryptocurrencies. On X he said he would invest in a new digital currency and expressed confidence in its imminent success. News of the “dog coin” began to spread online, and the author of the joke decided to act.

He bought the domain Dogecoin.com, built a basic version of the site, put an image of a coin with his favourite doge meme on the homepage and posted an appeal: “If you want to make Dogecoin a reality, get in touch”.

American programmer Billy Markus contacted Palmer, keen to create a joke cryptocurrency that would outshine Bitcoin in popularity and be distanced from the chequered history of other coins. He liked Palmer’s idea, and they decided to turn Dogecoin into a real cryptocurrency on the Bitcoin blockchain.

The genesis block was issued on 6 December 2013, and on 8 December the official Dogecoin announcement took place. Within hours of the coin’s appearance, a mining pool was created and the first block formed.

The founding duo operated under the pseudonym Shibetoshi Nakamoto. Palmer left the project in 2015.

How is Dogecoin evolving?

Soon after Dogecoin’s debut, its users began engaging in philanthropy via the Dogecoin Foundation, created in 2014. Enthusiasts raised funds to send Jamaica’s bobsleigh team to the Sochi Olympics, to drill two water wells in Kenya, to assist after flooding in Kashmir, and to sponsor NASCAR driver John Wise.

After 2019, Dogecoin’s development stalled for a year and a half. Work resumed amid a price surge in late 2020 and early 2021, spurred by Elon Musk, who actively promoted the first meme token on X.

In August 2021 the Dogecoin Foundation was revived. Advisers to the non-profit included Ethereum co-founder Vitalik Buterin; Jared Birchall, a long-time associate of Elon Musk and head of his family office; Dogecoin co-creator Billy Markus; and developer Max Keller.

In 2022 the Dogecoin Foundation published a DOGE development plan including node configuration via Starlink satellites, the introduction of staking mechanisms and the launch of L2 applications.

Community-led brand promotion also picked up. For example, in February 2024 Geometric Energy Corporation booked with SpaceX a launch to the Moon for the DOGE-1 satellite.

The network also saw technical experiments. In January 2024, Doom was deployed on the Dogecoin blockchain to mark the game’s 30th anniversary. This was made possible by the Ordinals technology.

Also notable is the emergence of new mechanisms for interacting with the network via the DRC-20 token standard, which allows new digital assets to be created on top of the “dog coin” blockchain. In May 2023 the format became so popular that daily transactions in Dogecoin exceeded 2m.