In Spaziocrypto's various Crypto Guides, we have analysed various cryptocurrencies in detail, but had not yet introduced meme-coins. Dogecoin has been discussed on many occasions, it has been the subject of numerous debates, but it has managed to become one of the most significant realities in cryptocurrency despite its ironic nature.
DOGE: When a Meme Becomes Real
It was in 2013 when a photo of the dog Kabosu went viral. Mrs Atsuko Sato could never have imagined that by sharing a photo of her dog on the Internet, she would be able to make it a real web star. In less than a year, the photo made its way around the world and even reached Jackson Palmer, a former Adobe engineer from Oregon, who decided to join the Shiba Inu meme wave by tweeting something about it too, 'I'm investing in Dogecoin, the next big thing'reported the tweet with a photo of a coin featuring Kabosu.
The Birth of Dogecoin
A little out of goliardia, a little as a provocation towards the crypto hype of the period, almost without realising it Palmer gives birth to a real cryptocurrency. It is called Dogecoin and takes its name from a Reddit meme from 2010. The word doge, in fact, originated as a misspelling of the word dog and quickly became synonymous with silly dog photos. The growing movement and success of Jackson's tweet led to the purchase of the domain dogecoin.com. Inside the site was only the image of the tweet, but this was enough to attract the attention of Billy Markus, who decided to also collaborate on the project. At the time, he was working on another cryptocurrency that became the basis of DOGE. All he did was to take the open-source code of Bitcoin and adapt it to the new currency, adding randomised rewards for miners. Already in its first year, the coin was very successful. And in January 2014, $30,000 in Dogecoin was even raised for charity, to help Bob's team participate in the Olympic Games.
The Moolah Exchange Fraud
Little later, a company named Moolah entered the Dogecoin scene, formed to become the first truly global Dogecoin exchange. It soon turned out, however, that the real purpose of the company was to get rich on the backs of others, and when the company declared bankruptcy, the money disappeared into thin air. Behind Moolah was Ryan Kennedy, a man already known for similar scams, who was later arrested and imprisoned on charges of fraud and money laundering.
Over the years, Dogecoin managed to withstand the various complications and, in 2017, gained listing on Binance, attracting a lot of visibility. Thus began the never-ending story with Elon Musk, the 'main supporter' of DOGE, who thanks to his tweets was able to influence the crypto market trend.
Performance and Technical Aspects of Dogecoin
For years, Dogecoin maintained the position of meme-coin, highly appreciated by the community with a not inconsiderable following but without financial value. In 2021, this changed dramatically when it became part of the market capitalisation in Binance. Today, Dogecoin boasts a privileged position in the crypto world. It is a peer-to-peer cryptocurrency with a Proof-of-Work consensus algorithm, similar to Bitcoin but with substantial differences. Dogecoin is an extremely fast and cheap currency, taking about a tenth as long to create a new block as BTC. Its trend remained fairly flat until 2021, when it began a vertical growth to almost touch the dollar. DOGE has thus conquered the world rankings and has firmly positioned itself among the top ten cryptocurrencies.
Blockchain Functioning
Just like Bitcoin, DOGE is based on the blockchain, a decentralised digital ledger that allows all transactions to be recorded through a network, guaranteeing transparency and traceability of each movement.
Supply Unlimited
Bitcoin was created as a deflationary currency with a limited maximum supply, whereas for DOGE there is no maximum circulation threshold. This means that coins could be minted indefinitely, a bit like fiat currencies. The unlimited supply led to the creation of a low-inflation economic model suitable for everyday transactions. In fact, there is a fixed annual issuance of 5 billion coins, and each year the inflation rate decreases relative to the total supply, in a predictable and calculated manner.
Dogecoin Algorithm
To mine Dogecoin, the Scrypt algorithm is used, a cryptographic function designed to process large amounts of data, offer cryptographic integrity guarantees and facilitate data recovery. An interesting feature is AuxPoW, Auxiliary proof of Work, which gives the ability to mine two coins simultaneously using the same computing power.
Elon Musk and Dogecoin
Elon Musk has become a prominent supporter of Dogecoin, influencing its value through his tweets. This relationship has lasted since 2021, when Musk began posting tweets referring to Dogecoin, making it a cult following. However, often in reference to Musk's statements, the coin has fluctuated several times. "Dogecoin is the people's crypto" was Elon Musk's tweet in 2021 that sent DOGE's value skyrocketing. The meme-coin became part of Twitter's home page for a few days, leading to a 38 per cent increase in price, but immediately went down when it was replaced by the original logo. Currently, Musk is being sued by an investor in Dogecoin for as much as $258 billion for driving up the price of Doge by more than 36,000% and then letting it crash. He is also thought to have set up a pyramid scheme and manipulated the crypto's price to make a profit. Musk's lawyers hit back at the allegations, seeking to dismiss the lawsuit.
"There is nothing illegal about tweeting supportive words or funny pictures about a legal cryptocurrency that continues to maintain a market cap of nearly $10 billion."
The Secret of Youth
If one asks oneself what the 'secrets' of this cryptocurrency might have been, i.e. what manages to move such a large market share from such a simple but also ironic idea, the answers could be many. The critical issues related to this cryptocurrency have been highlighted by Palmer himself, who fears that it could become an obsolete currency compared to its competitors because it has no technical innovations. But the initial gaiety has also given way to seriousness, and after eight years of the coin's life, a roadmap has been drawn up. Among the various projects is the creation of a Gigawallet that should facilitate transactions in DOGE and a library to enable the integration of Dogecoin in various platforms in a light and accessible way for all, LibDogecoin v0.1.
"LibDogecoin will be a complete implementation of the Dogecoin Protocols, as a C library (and set of links to popular languages) that will allow anyone to build a Dogecoin-compliant product, without having to worry about the deeper and more complicated specifications of cryptographic functions."
In addition, a collaboration has been set up with some prominent personalities, including Vitalik Buterin. The Foundation's goal is clear and stated: To eliminate the speculative meme-coin label in favour of a more stable and secure future.
Genious Marketing Trick, but also Benefit-and-Community
It can be said without a doubt that Dogecoin has been a marketing gimmick from the moment of its creation, both in terms of its logo and its name. The Dogecoin community has also engaged in social campaigns such as Doge4Water with the intention of raising funds for the construction of a water reservoir at the Tana River in Kenya. Two other fundraisers have also engaged Dogecoin, the charity initiative for the Family House association for families of children suffering from cancer or other illnesses and the one dedicated to Josh Wise, Nascar driver. Dogecoin's low and controlled inflation makes it a good cryptocurrency, known for its fast and cheap transactions, making it accessible to all and suitable for everyday transactions and potentially useful for mass adoption.
The key to its success would seem to lie in maintaining a wide supply. Much also stems from the community that has been created, a very passionate following that has helped the DOGE community to engage in charity as well. Importantly, there was no pre-launch pre-mint phase, which means that neither Palmer nor Markus kept any of the coins for themselves, both because DOGE was born in a totally ironic way and because the two had no intention of profiting from the project.
Conclusions: The Future of Dogecoin
The rise of Dogecoin from its meme origin to its current prominent position in cryptocurrencies has been an extraordinary journey. Initially born as an ironic provocation in the crypto world, Dogecoin has exceeded expectations to become a digital currency with a passionate and engaged community. Despite challenges, such as the Moolah exchange scam, Dogecoin has shown remarkable resilience over the years. Its adoption by prominent figures such as Elon Musk has helped raise its profile and made this crypto one of the most talked about and followed. With an unlimited supply and a focus on transaction speed, Dogecoin is positioned as a coin suitable for everyday transactions and has also participated in charitable initiatives, proving that behind its playful façade lies a supportive community.
And if the 2023 scenarios do not portend a good future for the crypto DOGE, in reality, it could join Bitcoin's next bull run in a bullish trend, probably starting next May 2024. Will the time come for DOGE to be presented to the world as King Simba, or have we already passed the moment?
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