Why You Should Love Dogecoin

A cuddly cryptocurrency with a heart of gold

Dogecoin - to the moon!

Bitcoin isn’t the only cryptocurrency in town. There are serious competitors like litecoin, next-generation cryptocurrency ecosystems like NXT, and then there are bizarre coins that developed for no particular reason other than, apparently, to give people a good laugh. Welcome to the world of dogecoin.

Remember lolcats, the cat-themed photo craze that took the Internet by storm a few years ago? Consider dogecoin to be its cryptocurrency equivalent.

Started in December 2013, it was effectively a joke. At the time of writing, its market capitalization was almost $12.5 million. Some joke!

Dogecoin was originally created as a fun cryptocurrency by two people on either side of the world from each other: Australian Adobe employee Jackson Palmer and Billy Markus, an IBM programmer in Oregon. The idea was to produce an alternative to bitcoin, and get away from some of the incumbent cryptocurrency’s bad reputation.

A $12.5 million dog meme

The whole thing is a meme; a joke, easily to mimic and pass along to others, often with slight tweaks. Doge came from Homestar Runner, a niche online show, in which one of the characters spelled the word ‘dog’ as ‘doge’ by mistake. Someone took the word and used it along with pictures of Shiba Inu, a small breed of Japanese dogs. Then they started putting bizarre internal ‘thoughts’ over the pictures. In Comic Sans font.

Why? Only the Internet knows.

However it started, it soon escalated. The price began to rise, from 1 doge to 0.00000066 bitcoins just before Christmas 2013, spiking at 0.00000234 bitcoins in February. The price has since dropped, and at the time of writing rests somewhere near its beginning, but given that the coin was invented from nothing, as a gimmick, without much thought, it’s impressive.

Dogecoin is also a lot easier to mine than bitcoin. Its code is based on litecoin, which is one of the most popular currencies after bitcoin, and which is based on a different mining algorithm, called Scrypt. This favours CPU-based miners, making it difficult for well-funded investors to take over mining operations by purchasing expensive ASIC mining equipment.

Laughing all the way to the bank

Why has dogecoin been so successful? One reason is its accessibility. Anything that people can laugh at on the Internet has a chance of becoming popular. Bitcoin isn’t the cuddliest of cryptocurrencies, and many people won't engage with it simply because it is difficult to understand. But a meme with a dog on it, that you can pay for? That’s half the Internet signed up, right there.

The viral success of the meme is reflected in the community that has built up around it. Whether or not you get its quirky sense of humour, it’s difficult to deny the good that it has done. The community that quickly build up around dogecoin created a nonprofit foundation to use it for charitable fundraising.

The dogecoin operation may have started as a joke, but it has become pretty sophisticated, with its own wallets running on a variety of mobile and desktop platforms.

It also recently merge-mined with litecoin, meaning that litecoin miners can now also process doge transactions.

Dogecoin even has a business directory or two now, and shows no sign of going away. More than a year after it first began, it still has people laughing, which is probably why it’s done so well. It may not be considered a tool for serious long-term investors, but there are some surprisingly big names accepting it, including property giant RE/MAX. The link to litecoin is sure to help here.

So far, the dogecoin community has sent the Jamaican bobsled team to the Winter Olympics by raising $30,000, and raised the same amount to build a well in the Tana river basin in Kenya. It scared up $55,000 to sponsor a NASCAR driver, too, and has raised money for flood relief in Kashmir - all of it funded in dogecoin.

Who can’t get behind a cryptocurrency like that? Especially one with such a cute, fluffy tail?