When the “dogefather” himself, Elon Musk, played fictional financial advisor Lloyd Ostertag on Saturday Night Live’s Weekend Update, he was asked this simple question:
“What is Dogecoin?”
Ostertag replies that it’s a cryptocurrency that started as a joke based on an internet meme, but has since taken off. It’s fully digital, has a circulation of 117 billion coins, and may just be the future of currency.
“Okay,” comes the puzzled response, “but what is Dogecoin?”
For many, this meme-inspired altcoin stubbornly remains an enigma. If it’s special, it’s unclear why. If it’s valuable, it’s unclear how. And if it’s a joke, then what’s the punchline?
This article dispels some of the mystery shrouding Dogecoin (DOGE) by explaining its origins, its spectacular rise to the upper ranks of the crypto world, and where it can be purchased.
What is Dogecoin?
Dogecoin is a fork of Litecoin that runs on Scrypt. Like other cryptos, it can be held as a store of value or used as a currency by accepted providers. Mining Dogecoin is much easier and faster than some of its competitors, which gives it an edge for making transactions. Whereas new blocks are confirmed every ten minutes on the Bitcoin blockchain, for example, it takes just a minute to confirm a Dogecoin block, meaning Dogecoin transactions are ten times faster.
Another feature that distinguishes Dogecoin is its inflationary nature. Whereas Bitcoin has a hard cap on the amount of coins (21 million) that are issued, DOGE has a theoretically unlimited supply. Some say this makes it ideal as a currency, for two reasons: firstly, because its inflation rate will trend in a predictable manner, and secondly, because there’s less incentive to “hodl." In general inflationary coins are better spent than hoarded.
Why was Dogecoin created?
“It’s weird that something I made in a few hours is now part of internet culture,” said Dogecoin co-creator Billy Markus to Bloomberg in February. “It feels silly, but there’s this huge upwelling behind it.”
Markus, an engineer at IBM, teamed up with Adobe software engineer Jackson Palmer in 2013 to create the cryptocurrency, mostly in jest. It all started with a tweet from Palmer. At the time, altcoins were springing up left and right, which he found excessive.
There was also an internet meme of a Shiba Inu dog called ‘Doge’ that was making the rounds, which he found funny. So naturally Palmer put the two together: he bought the domain “dogecoin.com,” photoshopped Doge on a gold coin, and tweeted “Investing in Dogecoin, pretty sure it’s the next big thing.”
It was a joke. Not only was it a joke, it was just a joke -- there wasn’t an actual cryptocurrency behind the name. It’s only when Markus saw the tweet and contacted Palmer that the two joined forces and created the coin, and even this was tongue-in-cheek. “I just wanted to show that I wasn’t a noob and I could actually make coins,” Markus told Money Inc. “This wasn’t some weird master plan that we had.”
Is Dogecoin still a joke?
There are a few reasons why DOGE has taken off the way it has. Elon Musk is one of them. Gene Simmons is another. But perhaps the biggest driver has been Reddit and the Doge community. Everyone has witnessed how “the front page of the internet” can drive real world trends. In January, the GameStop short squeeze that sent tidal waves through financial markets was due entirely to a little-known subreddit called WallStreetBets. It’s no different with DOGE, which has a loyal base on subreddits such as r/dogecoin and r/SatoshiStreetBets.
“This wasn’t some weird master plan that we had.” - Billy Markus, Dogecoin co-creator
TikTok and Twitch have played their roles, too. And so have Snoop Dogg, Jake Paul, and Mark Cuban. But the important question is not who or what is driving Dogecoin, but why? Is it serious or is it still just a joke?
The answer may be that it doesn’t really matter -- enough people are taking it seriously that even if it’s still a joke for some (especially its critics), there’s no denying its value. Currently Dogecoin is the eighth largest cryptocurrency by market capitalization, so as the saying goes, “the numbers speak for themselves.”
Another explanation is that DOGE is less of a joke with time. An interesting argument that proponents are using in Dogecoin’s favor is a theory called the “Lindy Effect”, which states that the life expectancy of something non-perishable (e.g., a cryptocurrency) increases the longer it has been around. In other words, as long as people know about it, Dogecoin is here to stay.
Where to buy DOGE
You can buy DOGE directly on MoonPay or through one of our many partner wallets using a credit card or bank transfer. MoonPay's simple widget allows you to purchase Dogecoin quickly and securely, using your preferred payment method and is soon to be supported for our US customers as well.