The Backstory: Dogecoin

Beginner Apr 12, 2021 · 4 min read

Doge
Key Takeaways:
— Dogecoin started life as a meme created by Jackson Palmer and it quickly blossomed into a cryptocurrency with a loyal fanbase.
— Because of Dogecoin, the Jamaican bobsledding team went to the Olympics in 2014 and a drought-stricken village in Kenya got a well with clean running water.
— Elon Musk either adores the cryptocurrency itself or the irony of how well it does in the market.
— Dogecoin shows us that cryptocurrency is more than just money; it’s about a cultural movement.

The Dogecoin backstory is a fascinating one. Much irony. Such potential.

Not many people know about the wonderfully wacky history of Dogecoin. While it made its name as a bit of a meme in the crypto market, there’s a lot more to it than meets the eye. In its simplest form, Dogecoin is a cryptocurrency. A digital asset with some cool technology behind it. But in reality, it’s oh so much more than that. Dogecoin is a symbol. An apt representation of what the heart of the cryptocurrency industry can mean and why a token that started life as a meme is worth so much more than the financial value each digital token is ascribed.

The backstory of Dogecoin

Dogecoin was created as a joke to poke fun at the cryptocurrency industry and the sudden interest the scene was receiving. Jackson Palmer, a sceptical Adobe product manager back in the day, created Dogecoin as a tongue-in-cheek dig at the hype of the burgeoning financial technology. His best way of satirising a cryptocurrency? Through a meme itself. Using “Doge”, the popular meme of the Shiba Inu dog, as literally the face of the cryptocurrency (yes, literally), Dogecoin at its essence is dripping in meme culture.

However, the idea of a satirical token quickly led to a surprising amount of support and Palmer realised he had something on his hands. With that, he bought and launched the domain dogecoin.com. At the time, Billy Markus, an IBM software engineer, was trying to build and launch his cryptocurrency (Luckycoin) but was having no luck in marketing it (the irony isn’t lost on us either). So he got in touch with Palmer, who hadn’t developed the Dogecoin coin, and asked if he could build the software.

The two teamed up and officially launched Dogecoin into the wild at the end of 2013. Two weeks later, it saw a massive 300% jump in price. Maybe it was the ever-endearing face of the Shiba Inu on the token that enticed people. Maybe it was the fact that China had just banned banks from investing in cryptocurrency. (Okay, okay, it was probably the latter.)

Either way, the coin shot up in price and Dogecoin gained even more traction. Three days later, the value faced a massive plummet but intrigue had already been garnered and the token had a name for itself in the scene.

The tech behind the token

At the first glance, Dogecoin might look like a joke form of Bitcoin, but if you pull back the curtain, you’ll see that there are different elements in the technology. At the heart of it, there are a couple of key differences which sets Dogecoin apart from the other cryptocurrencies.

The basic, most important difference between Dogecoin and other cryptos is that it has an unlimited supply whereas others (like Bitcoin and Litecoin) have a hard cap on how many coins can ever exist. This plays an important role in the price of Dogecoin – which stands as much lower (and more affordable) than Bitcoin yet runs the risk of being devalued.

Dogecoin has also been developed with a different algorithm to Bitcoin. While we won’t get into the nitty gritties of the tech here, it’s a small detail with some speedy ramifications – Dogecoin transactions are a lot faster than other cryptocurrencies. It also means that the expensive equipment used to mine or create Bitcoin isn’t necessary for the Dogecoin network, which could potentially make it less secure.

Dogecoin beyond the cryptocurrency 

From its satirical start, the Dogecoin community has set itself apart from others as a supportive group. Not only to the Doge but going beyond cryptocurrency to support causes across the world.

In January 2014, just a few months after its launch, the Dogecommunity pooled a bunch of tokens to send the Jamaican bobsled team to the Sochi Winter Olympics. The 27 million Dogecoins (which counted for around $30,000 at the time) were donated without any incentive or promotion by the founders. In fact, Palmer was at a local pub and saw the value of the token rise before realising what was happening. 

In March, the Dogecoin Foundation (yep you read that right), a non-profit that stemmed from the cryptocurrency, gathered $11,000 worth of Dogecoin to fund and build a well in Kenya. #Doge4Water raised 16.3 million Dogecoin and it continued the trajectory of a community behind a coin that has more meaning than just the value of the token.

And that’s the kicker: Dogecoin, at its root, is a cryptocurrency that stands as more than money. It stands as a point that while not taking itself so seriously, it’s given a serious amount of room to influence the scene. 

It seems to have positioned itself as a symbol to break the status quo, to rebel against authority and central control that governs finance. 

And its user-base loves it for it.

Elon Musk’s love for the Doge

Elon Musk weighed in on the irony that Dogecoin has managed to yield such a firm following, saying on social media app Clubhouse that “fate loves irony” and that the “most entertaining outcome and the most ironic outcome would be that dogecoin becomes the currency of Earth in the future.”

It’s worth noting that this particular comment comes amongst a flurry of tweets that the Tesla founder was entertaining the market with, many of which were memes themselves regarding the meme token.

Despite Musk’s tongue-in-cheek commentary of the tongue-in-cheek token, the Musk influence was astounding. At the height of his Twitter antics which started towards the end of January 2021, the price of Dogecoin rose by over 800%.

The curiosity of the Dogecoin culture

Okay, putting Musk aside, Dogecoin’s main appeal is that it is relevant beyond just the facet of finance. It’s a phenomenon that unites an eclectic group of tech nerds, digital natives and financial pundits through satire and hype with a neat bow of irony keeping it all together.

So while it may just be a speculative asset at the moment, the cryptocurrency which started life as a meme does hold value. It remains to be seen whether it will continue to grow into a genuine medium of exchange or whether volatility will prove too great an obstacle for a stable future for Dogecoin.

But for now, what we do know is that Dogecoin has already made its mark in the culture of the cryptocurrency community, giving us a taste of what money could be in the future.

Knowledge is power – so keep on learning! If you enjoy getting to grips with crypto and blockchain, check out our School of Block video 3 Ways to Earn Passive Income from Crypto.

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