In 2013, two friends set out to invent a ‘parody crypto-currency’. They wanted to make it as jokey and ridiculous as possible, and ‘memed’ it with a popular internet meme of a Shibu Ina, a Japanese dog breed. Despite its intended comical value alone, the coin has increased over 10,000% in value since its inception.
Jackson Palmer and Billy Markus had a lot of fun when, in December 2013, they formed Dogecoin. A Shibu Ina ‘memed’ crypto currency (the choice of the Japanese dog being a wink to Bitcoin’s Satoshi) was technically worth nothing and their plan was to keep it that way. In order to achieve this, they chose to be purposely random in its block reward. Crypto currencies have to be validated and authenticated in blocks (see our article on Blockchain) and miners are remunerated in the currency they mine. But the founders of Dogecoin were deliberately vague about how the remuneration for mining Dogecoin would work, meaning miners could be paid in zero or thousands of coins. The vagueness and randomness of their approach was to purposely deter miners from mining it, so the joke would remain a joke.
Dogecoin and its website were launched on the popular forum Reddit, where memes rule and followers often tend to act as one. It was the right place for it as they amassed 19,000 users on the platform in just two weeks, with the coin rising 300%. People on the platform totally loved the comical side of it and perceived it as a breath of fresh air; those wanting to play with crypto currencies could do so without spending more than some lunch money.
Community counts
The Dogecoin following on Reddit started calling themselves the ‘shibes’ community. They pulled together very early on when the site was hacked and coins were stolen from a small group of users. After a spontaneous fundraiser, they donated 15mln coins to those who had lost out.
Although Dogecoin was not a crypto that could be used for anything at the time, it was clear, after the hack, that it had community value. And so, the fundraising through Doge donations continued. A fun fact is that the ‘shibes’ raised about $30,000 (in only a few hours) to send a Jamaican bobsled team to the Winter Olympics in Russia in 2014. Other projects included guide dogs for children with special needs and a water aid project in Kenya. These charitable activities caught the attention of mainstream newspapers and gave Dogecoin exposure to an even wider audience. It was lauded as the “people’s crypto”.
It was given a further boost, recently, by both Elon Musk and Snoop Dogg (of course), who started tweeting about Dogecoin. Elon Musk announced he was going to put a literal Dogecoin on the moon with SpaceX, and the entrepreneur and Shark Tank panellist Mark Cuban said that Dogecoin has the “best entertainment value” (and expects it to go to $1 per coin).
Dogecoin currently, in April 2021, is worth $0,27 per coin (Bitcoin is at $50,000) and – despite its jokey image – has a total market capitalisation of $48bln.
Dogecoin has come a long way and is surely more grown up today than was the intention in 2013, but it has not lost its humour and sense of fun. But early investors also have a 10,000% return on investments to laugh about. Not bad for a joke.
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