By Wendy Clack, Andrew Hayward and Stephen Graves
7 min read
What happens when a joke gets taken seriously? In 2013, Dogecoin (DOGE) was created as a way to poke fun at the crypto industry; now it's one of the world's biggest cryptocurrencies. How did it get to this point?
Dogecoin is a cryptocurrency that takes its name from the "doge" Internet meme. It started as a way to mock the industry, but quickly built up a lively community of enthusiasts.
It has come a long way since 2013, briefly hitting a market cap of $88 billion during its May 2021 price surge.
Jackson Palmer, an Adobe employee, couldn’t believe the huge number of altcoins that were popping up in 2013. As a joke, he sent out a tweet saying he was investing in Dogecoin—a fake coin based on a popular meme featuring a Shiba Inu dog.
Even though he tweeted in jest, several people thought he was on to something. They said the industry really needed a light-hearted token that could counter the more controversial coins on offer. So Palmer teamed up with Billy Markus, a programmer, to make Dogecoin a reality.
“It was always like a hobby project, like a side project thing,” Palmer told Decrypt in 2018. But a community quickly formed around the cryptocurrency, and took it much further than Palmer had anticipated.
The upside of Dogecoin’s never-ending supply of tokens is that the price stays relatively stable. The downside is that the price usually remains very low. Most people get into the crypto world as an investment. They hope that if they hang onto certain tokens long enough, they can sell for a profit.
Not so with Dogecoin. Since the token supply is high and the price is low, it’s not attractive to investors looking to hold onto their currency. The result is a highly liquid, free-flowing peer-to-peer digital currency.
A key use of Dogecoin is as an online tipping system. If you like what someone posted in the Dogecoin Reddit community, throw them some Dogecoin. It’s part of what gives the community its friendly reputation.
You can also trade it for other cryptocurrencies on several exchanges, which has made the currency an unlikely medium by which people hop from one exchange to another.
For something that started out as a joke, Dogecoin has established a legitimate reputation. The community's philanthropic endeavors quickly caught the attention of the media; Dogecoin fans sponsored NASCAR driver Josh Wise in 2014, funded the Jamaican bobsled team at the 2014 Winter Olympics, and later raised thousands for a Kenyan water charity.
Co-founder Jackson Palmer isn't a fan of how seriously people take Dogecoin; he left in 2015, after scammers fleeced the fun-loving members of the Dogecoin community. At the time, he said too many people were jumping in with a ‘get rich quick’ mentality, missing the token’s purpose.
When Dogecoin briefly hit a $2 billion market cap in January 2018, Palmer remained critical. He stated, “I think it says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn’t released a software update in over 2 years has a $1B+ market cap.”
Dogecoin picked up steam once again in 2020; partly thanks to the emergence of a new social media platform that traffics in memes. In July 2020, a viral TikTok challenge encouraged users of the app to invest in the cryptocurrency, briefly causing the price to soar—to the point where the official Dogecoin account had to weigh in, cautioning people to "Stay safe. Be smart."
At the same time, Dogecoin found a celebrity fan in billionaire Tesla CEO Elon Musk, who began tweeting about the cryptocurrency—though he later clarified that he was talking in jest. After one tweet in December 2020, the price of Dogecoin shot up by 17%, from $0.0039 to $0.0046.
Perhaps inevitably, Dogecoin's success has inspired imitators. Other so-called "meme coins" have sprung up, including SafeMoon (SAFEMOON), Shiba Inu Coin (SHIB) and Baby Doge (BABYDOGE), the latter of which was (possibly inadvertently) boosted by a tweet from Elon Musk. And those are just the headliners; the meme coin pack is buoyed by the likes of Doge Cash, Akita Inu, Dogelon Mars, Baby Doge Cash (which can be considered a spin-off of a spin-off) and even Floki Inu (named after Musk's pet Shiba Inu), all fuelled by an ecosystem of influencers.
While Dogecoin's devs are knuckling down to the long-term goal of turning the meme coin into a fully-functioning everyday currency, many latterday meme coins are open about the fact that they're taking a more trial-and-error approach; in SHIB's case, it bills itself as "an experiment in decentralized spontaneous community building."
Others don't see the funny side; in June 2020, Thailand's Securities and Exchange Commission ordered crypto exchanges to delist meme coins (alongside NFTs and social tokens), defining them as tokens that have “no clear objective or substance or underlying [value],” and whose price relies on social media trends.
Whether Dogecoin itself is here to stay—or whether it's destined to flame out as it did after its 2018 peak—is open to debate. But, as the Dogecoin community says, in the end one thing is immutable: 1 DOGE = 1 DOGE.
Throughout its lifespan, the Dogecoin community has remained active and loyal. If Elon Musk's goal of turning Dogecoin into a bona fide (or 'bona fido', perhaps?) currency for transacting in, it could very well stick around long into the future. Wow.
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