What is Dogecoin?

Unlike Bitcoin, Ether, and many other digital currencies, Dogecoin started as a joke — a token created by two software engineers whose design was almost cartoonish when compared with some of the tokens on the crypto market at the time. The design of the token was based on a popular meme: a Shiba Inu dog looking into the camera with text supposedly representing its inner monologue floating around.

Though the price of the token has likewise been comically small for most of its history, Dogecoin has had its fervent supporters, like so many other projects in the crypto space. Social media posts from billionaires Elon Musk and Mark Cuban likely helped the price of DOGE surge to new all-time highs in 2021.

Overview for Fast-Readers

  • Dogecoin was created by software engineers Billy Markus and Jackson Palmer in December 2013.
  • The project was intended to be a joke, based on a popular meme at the time.
  • The price of DOGE has surged in 2021 following social media posts from celebrities and others.

Who is behind Dogecoin?

The cryptocurrency was created by software engineers Billy Markus and Jackson Palmer in December 2013. Palmer was the first to act, purchasing the domain name for Dogecoin.com and later partnering with Markus to develop the digital currency.

Doge Coin Cryptocurrency

The Dogecoin project initially intended to limit the supply to 100 billion tokens in circulation, which were all mined less than two years after DOGE’s release. Since that time, an additional 5 billion DOGE tokens have been put into circulation each year, with the supply expected to reach 130 billion in 2021.

When was Dogecoin created?

The Dogecoin project launched on December 6, 2013.

What is the purpose of Dogecoin?

Though the token can be bought, sold, and traded on popular crypto exchanges like most cryptocurrencies, the fact it was originally created as a joke makes some treat DOGE with similar levity as many outsiders did Bitcoin early in its history. For example, Reddit users offered the token as a tip for interesting stories on the platform.

However, the token has also proven to be a profitable short-term investment among crypto traders, something which may have led to additional use cases. Many crypto ATMs currently offer support for the token, and sports fans can use it to purchase merchandise from the Dallas Mavericks basketball franchise.

How much is Dogecoin worth?

At the time of writing, the price of DOGE is $0.0559. Like many cryptocurrencies, the value of the token reached a peak during the late 2017 and early 2018 bull run, reaching $0.02. For most of the time period from 2018 to the beginning of 2021, Dogecoin did not rise to more than $0.01.

Bullish factors for DOGE

Unlike Bitcoin, which is continuing to be used as a store of value by major investment firms, the limited use cases of DOGE coupled with its seeming “immaturity” as an asset has led to somewhat unusual factors causing a surge in its price.

TikTok users briefly pumped the price of Dogecoin more than 600% in July 2020 with a viral challenge to “invest just $25” in the token. The price fell shortly afterwards as attention waned from the pump, but Elon Musk revitalized it in early 2021 with a series of tweets featuring DOGE memes.

Social media attention from the billionaire amid retail investors from Reddit squeezing hedge funds’ shorts of GameStop stock likely contributed to a massive price surge. The price of DOGE rose more than 1,600% in under two months from $0.00484 on Jan. 1 to an all-time high of $0.084945 on Feb. 8.

Bullish factors for DOGE

Elon Musk’s social media posts can be used for tanking assets almost as easily as pumping them. In February, the Tesla CEO called out the unequal distribution of the tokens among HODLers on Twitter. At the time, one person held more than 25% of the DOGE supply, while another 12 controlled more than half. The tweet likely contributed to the price of the token falling more than 20% within a day.

What does the future of DOGE look like?

Some are predicting that the price of the token will eventually reach $1, giving DOGE the proving ground for more use cases in the future.

Dogecoin already has the support of Elon Musk and Mark Cuban in addition to rock and roll legend Gene Simmons. Cuban has called the token a useful tool for “teaching the economics of supply and demand and introducing people to crypto assets” while Musk’s comments are typically limited to short phrases or memes seemingly in an attempt to pump the price.

The Tesla CEO shows no signs of stopping his DOGE tweets, but given his history mentioning funding for the electric car manufacturer on social media, his actions may be under scrutiny from the U.S. Securities and Exchange Commission. In 2018, Musk settled with the regulatory body for a $20 million fine and agreeing to step down as chairman of the Tesla board.

Summary

Many crypto users have taken advantage of Dogecoin’s price surges to net short-term profits in the last year. Despite its origins as a meme, interest in the token seems to be growing, likely spurred from Elon Musk’s tweets.

Though a $1 DOGE would seem to be far from its current value, the token would simply have to have a repeat of January and February 2021, when the price surged more than 1,600% in less than two months. If the price of DOGE were to rise by the same percentage again, the token would be within reach of $1.