Dogecoin, Explained

Published on February 2, 2021

There are several cryptocurrencies that people can invest in like Bitcoin, Litecoin, Bitcoin Cash and many more. However, there is one cryptocurrency out there that recently saw its value skyrocket: Dogecoin.

Dogecoin is a peer-to-peer, open source cryptocurrency that first came to be in 2013. When you first look it up, you might recognize its mascot: an all too familiar Shiba Inu named Doge; for those who don’t know, the Doge meme became popular that same year with its use of comic sans text over the Shiba’s picture.

It’s known as an “internet currency,” and a “fun” version of Bitcoin. Additionally, it works as an inflationary coin so there is no market cap for the number of coins that are created. This is both good and bad. It keeps the price low because the coin’s demand will never really exceed its availability, but that also means it will never really take off in the way that Bitcoin and other cryptocurrencies have.

A well-known use for Dogecoin involves “tipping” people who create or share content on the internet. You can also use it to buy goods and services, or trade it for other cryptocurrencies and traditional currencies.

The History of Dogecoin

Co-founders Jackson Palmer and Billy Markus came together to make the cryptocurrency a reality.

Palmer, a Product Manager at Adobe’s Sydney, Australia office, first came up with the term “Dogecoin” as a way to satirize the popularity of rising cryptocurrencies at that time. After tweeting about it and receiving positive feedback, he bought the domain. He then left a note on the website and said that if anyone wanted to make Dogecoin a reality, they should get in touch with him.

At the same time, Markus worked as a Software Developer for IBM and created his own digital currency called Bells, based off of the currency used in the Animal Crossing video games. Like Palmer, his Bells cryptocurrency was a joke, but no one understood it. After he found out about Dogecoin and read the note on the website, he reached out to Palmer to help him make Dogecoin a reality.

Dogecoin officially launched on December 6, 2013 and on December 19, its value jumped by 300 percent after China banned its banks from investing in any form of cryptocurrency.

Dogecoin’s Recent Rise

Over the last few days, Dogecoin’s value has once again risen, all in the midst of the GameStop stock trading frenzy.

Last Thursday, its value hopped up by 800 percent. This is thanks to a recent Dogecoin resurgence by the Reddit community known as SatoshiStreetBets. One member of the group posted that Dogecoin is the “crypto GME,” with GME being GameStop’s stock ticker.

However, there is a difference between what is happening with Dogecoin versus what is happening with GameStop. With GameStop, buyers are creating a short-squeeze to force funds to cover their losses and that pushes the stock up higher. In Dogecoin’s case, people in the Reddit group want to hype up the cryptocurrency so they make more money. But in each situation, everyone contributing to the pushes is doing so just for fun.

Elon Musk also seemed to have contributed to the rise of Dogecoin in the last week. The Tesla founder tweeted a picture of a “dog version” of Vogue magazine called Dogue, which looked like he was supporting the Dogecoin movement. This was not the first time that Musk has tweeted about Dogecoin, though. Last December, his simple “One word: Doge” tweet made the cryptocurrency jump by 20 percent, while a previous July tweet made it spike by 14 percent.

Lexi Jones is an award-winning journalist and Staff Writer at Grit Daily. Based in Las Vegas, she covers startup brands in entertainment, internet and LGBTQ+ startup news. She is also an editor of Grit Daily's "Top 100" entrepreneur lists.

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