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Dogecoin Turns 10: A Decade of Pawsitively Doge-tastic Moments

Last Updated December 9, 2023 2:12 PM
Teuta Franjkovic
Last Updated December 9, 2023 2:12 PM
Key Takeaways
  • Dogecoin marks its 10th anniversary with a substantial double-digit surge.
  • Traders are advised to exercise caution despite substantial market capitalization, given the highly volatile nature.
  • The open interest for Dogecoin (DOGE) has exceeded $700M, signaling a growing interest in the derivatives market.

The Dogecoin (DOGE) community was experiencing a significant double-digit increase in price  as the meme coin, holding the top spot in market capitalization, commemorated its 10th anniversary.

In an unexpected twist, Dogecoin (DOGE) commemorated its 10th anniversary with a remarkable celebration, surpassing the coveted $0.01 mark  and solidifying its rank as the ninth-largest cryptocurrency, boasting a market capitalization of $14.62 billion.

From Meme to Market Leader

As the community commemorated this milestone, DOGE enthusiasts closely watched the charts, witnessing a nearly 10% surge in the token’s value. The real magic, however, lay in the steady growth over the past two months, culminating in an impressive 70% gain since mid-October.

Credit: CoinMarketCap

Originally conceived as a joke  on December 6, 2013, Dogecoin has evolved to become the emblematic figure of the meme coin genre. Despite its initial humorous origins, its popularity has steadily risen, securing its position as the 9th largest cryptocurrency by market capitalization.

Dogecoin was created by software engineers Billy Marcus and Jackson Palmer. The cryptocurrency’s logo, featuring the misspelled word “doge” to describe a Shiba Inu dog, was branded by Palmer, drawing inspiration from a popular meme at the time.

Pat White, CEO of Bitwave, noted  that “Doge was really started to poke fun at Bitcoin.” During its initial stages, a community of enthusiasts organized various publicity stunts to boost Dogecoin’s visibility. Examples include raising funds to send the Jamaican Bobsleigh team to the 2014 Olympics  and sponsoring a NASCAR driver.

From Reddit Hype to Musk’s Twitter Takeover

In early 2021, Dogecoin achieved cult status on Reddit’s WallStreetBets message board, known for its involvement in the GameStop affair in January. Enthusiasts on the subreddit had pledged to drive Dogecoin’s value “to the moon” before cryptocurrency discussions were banned on the platform.

In May 2021, Dogecoin experienced a significant surge, reaching a peak of $0.68, a remarkable increase from its value of just under one penny at the start of the year. The substantial growth was attributed, in part, to Tesla CEO Elon Musk, who played a role by expressing Dogecoin as his favorite cryptocurrency. By mid-2021, Dogecoin consistently ranked among the top five cryptocurrencies by total market capitalization.

Subsequently, the value of Dogecoin experienced a notable decline, reaching a low point of around $0.05 in June 2022. However, after Elon Musk adopted the Dogecoin Shiba Inu as the new logo for Twitter , DOGE quickly regained momentum, returning to the top ten cryptocurrencies by market capitalization.

Unveiling the Meme Coin’s Inner Workings

Dogecoin, the cryptocurrency featuring the iconic Shiba Inu dog, operates on a dedicated blockchain similar to other major coins. This digital ledger keeps a record of all transactions, secured by robust cryptography.

Dogecoin employs a “proof of work” consensus mechanism, where miners dedicate computing power to solve complex mathematical puzzles. These puzzles validate transactions and add them to the blockchain, rewarding successful miners with newly minted Dogecoins.

While Dogecoin can facilitate payments and purchases, its lack of a fixed supply limit renders it a less-than-ideal store of value. Unlike Bitcoin, which has a finite issuance schedule, Dogecoin’s mining rewards millions of new coins daily, contributing to its inflationary nature .

This continuous influx of new Dogecoins presents a significant obstacle to sustained price growth, making long-term speculative investments less attractive.

In essence, Dogecoin’s technology is similar to many established cryptocurrencies, but its inflationary design and meme-based origin distinguish it from the pack.

Dogecoin vs. Bitcoin: A Tale of Two Cryptocurrencies

While both Dogecoin and Bitcoin operate on blockchain technology, they differ in fundamental ways. Here’s a breakdown of their key differences:

Transaction Speed:

  • Dogecoin boasts faster transaction processing times compared to Bitcoin. Solving the mathematical puzzles required for new blocks takes only a minute for Dogecoin, while Bitcoin requires 10 minutes, according to Gary DeWaal, Chair of Katten’s Financial Markets and Regulation group.

Supply Cap:

  • This is a crucial distinction. Bitcoin has a fixed lifetime cap of 21 million coins, limiting the total supply and potentially contributing to its value appreciation over time. Conversely, Dogecoin has no such limit, allowing for continuous creation and inflation of the currency.

Mining Difficulty:

  • Due to Bitcoin’s limited supply, the process of mining new coins becomes progressively more challenging over time. This incentivizes miners to invest in more powerful computing hardware. Dogecoin’s lack of a cap translates to easier mining, but also a less predictable value proposition.

Investment Potential:

  • Bitcoin’s limited supply and established history make it a more attractive option for long-term investors seeking potential value appreciation. Dogecoin’s inflationary nature and meme-based origin make it less suitable for long-term investment strategies.

Use Cases:

  • Both currencies can be used for payments and purchases. However, Bitcoin’s established status and high value often position it as a store of value, similar to gold. Dogecoin’s lower value and readily available supply make it more suitable for everyday transactions.

Is Dogecoin a Viable Investment?

Due to the absence of a lifetime cap on the total supply of Dogecoins and the continuous release of millions of new Dogecoins daily, there is minimal encouragement to hold the cryptocurrency for extended periods. In contrast, Bitcoin’s increasing value is attributed to its capped supply.

Historically, the individual coin value of Dogecoin has remained quite low, hovering around $0.003 per coin for a significant part of 2020, making it more likely for people to distribute them. Users on various social platforms, including Reddit, Twitter, Facebook, and others, can utilize Dogecoin to reward or ‘tipping’ each other  for content contributions.

Purchasing any cryptocurrency carries inherent risks, and Dogecoin is no exception. While it may be prudent to acquire a few coins to acquaint yourself with the system, it is advisable to exercise caution and avoid investing a significant amount of your hard-earned money in a cryptocurrency that originated as a joke.

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