What is Dogecoin (DOGE)? From meme to mega market cap

Dogecoin (DOGE) began life as a joke.

Software engineers Billy Markus and Jackson Palmer created DOGE to be a humorous currency, naming it after the Shiba Inu “doge” meme.

Eventually it grew in value, with thousands of users, and whole Internet communities emerged around sharing the currency and posting memes about the coin online.

Over time the dedicated fanbase (and Elon Musk) have helped propel Dogecoin to become one of the most recognised coins on the market.

Today's Dogecoin price

What is Dogecoin?

Dogecoin is a cryptocurrency, with some design features similar to that of Bitcoin (BTC) and Litecoin (LTC). It began as a protest, created by software engineers Jackson Palmer and Billy Markus in 2013 to demonstrate that anyone could create a cryptocurrency.

Both developers left the project in 2015, leaving it in the hands of the community who began to use it primarily for fundraising and tipping.

Dogecoin gained traction through tipping thanks to its high inflation rate and low value. Instead of tipping someone $1 of Bitcoin, which in late 2015 would have been around 0.025 of a BTC, a user could instead tip approximately 7,500 Dogecoin for an equivalent dollar value. This form of psuedo-wealth, where a larger amount of whole units is coveted, has long been a driver of Dogecoin's success.

Dogecoin has become one of the most iconic coins on the market, thanks to memes, a cult-like following, and even celebrity endorsements by self-proclaimed Former Dogecoin CEO Elon Musk.

While many other altcoins are attempting to become something bigger than a simple currency transaction platform, Dogecoin has stuck to its roots and is now primarily used on platforms such as Reddit and Twitter to tip other users for information, funny posts or whatever else is deemed tip-worthy.

Dogecoin inflation and supply

Dogecoin uses proof-of-work mining using specialised computers, similar to how Bitcoin is mined. As a fork of Litecoin (LTC), Dogecoin uses a similar Scrypt mining algorithm used by LTC.

The current supply of new Dogecoin is 10,000 coins per block, with a new block being mined every minute. This equates to an effective inflation rate of 5.256 billion coins per year. This high rate of inflation threatens the long-term stability of Dogecoin's price.

Initially, mining gave out a random amount of DOGE, but this was changed to a fixed reward in March 2014.

Dogecoin tipping and fundraising

Before becoming one of the top cryptocurrencies by market capitalisation in 2021, with a single Dogecoin costing as much as US$0.65, DOGE was historically a super cheap cryptocurrency.

Before 2021, a single Dogecoin never cost more than a cent. Thanks to such a low unit cost, DOGE became a popular way of tipping people, as it made the tips look bigger than they actually were in dollar terms.

For example, in September 2017 a single Dogecoin cost approximately US$0.0008 to purchase. Users who want to tip other users for small amounts have a much easier time doing it than with another coin. For example, using those September 2017 figures, to give someone US$0.10 would have cost 125 DOGE, but 0.000027 BTC.

Combined with the philosophy that DOGE should be used to reward other people quickly and easily, it’s a common occurrence to see Reddit and Twitter users tipping each other small amounts of DOGE for entertaining posts.

In 2014 Dogecoin won hearts and minds by raising $30,000 to send the Jamaican bobsleigh team to the Soichi Winter Olympics. In a matter of hours, the community pitched in 25 million DOGE (worth roughly US $0.00028 per coin at the time).

Where can I pay with DOGE?

Thanks to the success of Dogecoin in 2021, there are now several ways to use your DOGE to pay for goods and services. Many retailers already accept cryptocurrency payments, either natively or through the support of third-party services. Cryptocurrency debit cards are also a popular way to spend DOGE and a range of other cryptocurrencies.

Here is a short list of payment services and debit cards you can use to spend your DOGE.

• Crypto.com
• WireX
• BitPay
• LivingRoomOfSatoshi

Crypto debit cards compared

How do I purchase Dogecoin?

Use the table below to compare a list of cryptocurrency exchanges that you can purchase DOGE on.

1 - 5 of 23

Product GXFCY	Deposit methods	Fiat currencies	Cryptocurrencies	Offer	Disclaimer	Go to site
CoinSpot Exclusive	Bank transfer, Credit card, Cryptocurrency, Debit card, PayID	1	500	Get $20 in BTC when you make a deposit. T&Cs apply.		Go to site Capital at risk View details Compare	loading Fetching your data...
eToro Crypto Best Rated BrandExclusive	Bank transfer, Credit card, Debit card, PayPal, eToro Money	27	107	Get a US$50 bonus when you buy at least US$500 in crypto. T&Cs apply.		Go to site Capital at risk View details Compare	loading Fetching your data...
OKX	Bank transfer, Credit card, Cryptocurrency, Debit card	1	302	Get $20 in BTC when you trade $20 in the first 14 days after opening an account. T&Cs apply.		Go to site Capital at risk View details Compare	loading Fetching your data...
Bitcoin.com.au	Bank transfer, Credit card, Cryptocurrency, Debit card, PayID	1	30	Get $10 of Bitcoin when you verify your account. T&Cs apply.		Go to site Capital at risk View details Compare	loading Fetching your data...
Kraken Finder Award	Credit card, Cryptocurrency, Debit card, PayPal, PayID	7	295			Go to site Capital at risk View details Compare	loading Fetching your data...

Disclaimer: Star ratings are only displayed for products with 10 or more reviews.

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Transferring Dogecoin

Standard Dogecoin transfers (such as those made to pay for a product or service online) are carried out in much the same way as other altcoins, as long as you own some DOGE in a Dogecoin compatible wallet. Here’s how it works:

1. Enter the recipient’s address. Whether it’s sent as a string of numbers and letters or scanned from a QR code into your mobile wallet, you first require the recipient’s wallet address (or public key).
2. Enter an amount of DOGE to send. After agreeing on how much DOGE you are required to send, enter that amount into your wallet. Make sure you have enough funds to avoid failed transactions.
3. Send your coins. After pressing your wallet’s “Send” button equivalent, the amount of DOGE sent will be taken out of your balance and added to the recipient’s. Even though the transaction is instantaneous, it might take a few minutes for it to be validated and the funds made available for use on the recipient’s end.

Making money with Dogecoin

You can make money with Dogecoin in one of three ways:

• Get tipped. Producing good content (whether that’s free art posted online, articles or funny comments on Reddit) can result in tips being sent in from users of Dogecoin. Tips are automatically added to your wallet, and can either be used to buy products or services from others, tipping other users in return or holding onto them as an investment.
• Sell products or services. Whether you’re a website developer, writer, business adviser, jeweller or social media marketing guru, taking payment in the form of Dogecoin is as easy as taking any other form of payment via fiat currency. Lots of online cart platforms have plugins for accepting DOGE as payment alongside USD, euros, etc, and you can even get paid directly by providing your wallet’s public address to the person paying for your services.

Risks of buying Dogecoin

While it has sometimes been called the Internet’s favourite altcoin, Dogecoin is not without its cons.

• High inflation. Dogecoin has a highly inflationary supply, with approximately 10,000 new coins created every minute, equating to 5.256 billion coins per year. Typically an inflationary currency causes the value of each unit of currency (1 DOGE) to reduce over time.
• Celebrity hype. Dogecoin's astronomical rise in price throughout 2021 is largely attributed to a single person – Elon Musk. Thanks to occasional tweets of Doge related memes, Musk has single-handedly caused the profile of Dogecoin to explode in popularity. If his attitude towards DOGE ever sours, or when he inevitably becomes bored with it, the price may be affected negatively as a result.
• Joke status. Dogecoin started life as a joke and a quick visit to the coin's website is enough to reveal that this currency doesn't take itself too seriously. This has been a key factor in its survival and success. However, if you're looking for a coin to buy and hold in the hope of achieving long-term profits, you'll need to consider whether DOGE fits with your cryptocurrency strategy.

Frequently asked questions

• What is Dogecoin named after?

  Doge is an Internet meme originating in 2010 after a Japanese kindergarten teacher posted photos of her rescue Shiba Inu dog, Kabosu. One of the photos became an Internet phenomenon and soon the Internet turned it into a meme, adding (often misspelled) captions like “much wow” and “such happy” to pictures of Shiba Inu dogs.

  The meme lives on in Dogecoin, where users often share information about the coin using similar captioning.

• Is Dogecoin a joke?

  While its name is inspired by an Internet meme, and its community loves sharing memes about the coin, the technology behind it works towards being powerful, robust and secure. With a market cap (calculated by the cost of each coin multiplied by how many coins exist) of over US$89 million in September 2017, Dogecoin has led the market in tipping online users quickly and easily. It has been, and continues to be, widely adopted by merchants. Dogecoin seems to be set to stay around for a long time.

Image sources: Shutterstock, CoinMarketCap

Written by

Andrew Munro

Editor

Andrew Munro was the global cryptocurrency editor at Finder. During his time he covered all aspects of cryptocurrency and the blockchain. Before he became cryptocurrency editor, he was a content writer for Finder covering various topics over his nearly 5 years in the role. Prior to joining Finder he was a web copywriter. Andrew has a Bachelor of Arts from the University of New South Wales. See full bio