Throwback Stories #11: Much Doge

Dominik Olech
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Although Bitcoin is the king of the cryptocurrency market, there is another coin that has won the race for the hearts of crypto enthusiasts.

In Throwback Stories, we frequently talked about various cases from the cryptocurrency world. We took a closer look at important, proud moments as well as infamous pages of the blockchain history. In the previous episode, we examined the origins of Ethereum. Today, we will also talk about the beginning of cryptocurrency – but a completely different from the Ether. Let’s see how Dogecoin has come to life.

Much coins

To better understand the origins of a Dogecoin, we have to take a look at the meme which stands behind it: the “doge.” The Japanese Shiba Inu dog took over the Internet in 2013, and since then, it has been a popular puppy of cyberspace. The image of the yellow dog, usually accompanied by a text written in so-called “broken English,” was frequently posted on social media and forums. 

This leads us Billy Markus, IBM developer, who dreamed about creating a cryptocurrency in a much lighter tone than Bitcoin. The intended project was to reach outside the then blockchain industry and not be associated with controversies related to other coins. Markus himself, however, didn’t intend to use doge at first. 

This idea appeared in the mind of Jackson Palmer, a marketer in Adobe. He got inspired by the plenty of various, copy-pasted “coins” and reserved the domain “dogecoin.com,” giving it its initial shape related to the famous meme. However, since he wasn’t a programmer himself, the Dogecoin was just a form of a joke for him at first.

Unexpected success

Eventually, Markus found out about the website created by Palmer and decided to develop the cryptocurrency for real. He based the code on an existing currency, Luckycoin (which was, in fact, based on Litecoin, inspired by Bitcoin… a practical example of the open-source idea), and launched it on December 6, 2013.

The new cryptocurrency was pretty standard from the technological site. Based on the proof-of-work algorithm, it was very similar to other coins available on the market. What made it different from Bitcoin was the lack of a fixed limit of tokens ever mined.

Dogecoin has entered the market at a very specific moment, just after the Chinese ban on Bitcoin began. What caused a problem for major cryptocurrencies, for the new coin, was rather an advantagous situation, which made it possible for it to increase by 300 percent in value in just three days,, reaching the price of $0.00095 – even if it dropped by 80 percent three days later.

However, the real turning point for the currency was the first theft of dogecoins, which happened not even a month after the release. A hacker managed to get access to the platform Dogewallet and steal millions of coins. But the theft had a positive impact, making Dogecoin popular among crypto enthusiasts to the “SaveDogemas” initiative, which managed to completely compensate for losses.

Stable place on the market

Further story of Dogecoin isn’t full of surprises. The cryptocurrency, thanks to the correlation with a famous meme, became a popular trend among crypto enthusiasts. Some of them started to believe that Dogecoin is able to become a successful project, even competitive to Bitcoin. Most of its fans, however, took it only as a funny curiosity in the blockchain industry.

At the beginning of 2014, the trading volume of Dogecoin surpassed all other cryptographic currencies for a short time. But with a low market capitalization, this achievement wasn’t proof of anything besides the popularity of Markus and Palmer’s coin. The latter abandoned the project one year later.

The brightest moment in Dogecoin’s history was, no surprise, the cryptocurrency bubble at the turn of 2017 and 2018. During that time, the currency achieved the highest price for a coin in history, $0.017, with a market capitalization of $2 billion. Of course, it didn’t last long, and like every other crypto, it noticed a major fall at the end of 2018.

1 Doge = 1 Doge

Today, Dogecoin mostly resembles an inside meme of the cryptocurrency industry. Everybody who starts to delve into the blockchain world will sooner or later find out about the coin with a famous Shiba Inu on its logo. What made this currency not forgotten, despite the lack of technological or economic potential?

The reference to a well-known joke was surely meaningful. The more casual feeling of this currency and the lighter tone was surely a perfect escape from the routine of the blockchain industry: both in times of its development, and in the very current moment. It has allowed the coin to gather plenty of supporters because it doesn’t request anything in exchange.

But probably the best answer for Dogecoin’s success is the fact that this currency simply wasn’t intended to achieve anything. It was created partly as a joke (form Palmer’s side), and partly as an answer to the worsening opinion of the cryptocurrency industry. Dogecoin meant to show another side of the blockchain technology: not focussed on economic income, not related to criminal activities, but simply enjoyable. And when many traders are worried about the eventual price fall, Dogecoiners may sleep peacefully. After all, 1 Doge is always worth a 1 Doge – and with such a simple economy, it will surely reach the moon.

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