According to its developer, Jackson Palmer, Doge presented a welcoming face to the cryptocurrency world. While Bitcoin was dealing with the stigma of being associated with illegal activities such as money laundering, drug transactions, and other nefarious activities, Dogecoin was presenting a cleaner and more modern image of a cryptocurrency. It was the currency of “generosity” from the outset, thanks to various philanthropic efforts that quickly entered the Reddit domain in 2014.
Charity and the “good” case for the cryptocurrency
The Dogecoin Foundation is a non-profit organisation based in Colorado that was founded in 2014 after actual fundraising requests began to appear on the Reddit channel r/Dogecoin.
One of the first projects was a fundraising event that raised $30,000 in Dogecoin worth to finance the Jamaican bobsled team’s participation in the Sochi Winter Olympics.
In March of that year, the community gave $50,000 in Dogecoin to Charity: Water to help fund a project to supply clean water to Kenya. The donation enabled the charity to construct two water wells in the area.
For the Reddit community, the term DOGE had come to imply “Do Only Good Everyday” by that point. Another great philanthropic story was that of Josh Wise, a NASCAR driver who was unable to enter the Talladega Superspeedway event due to a lack of cash. Over 67 million Dogecoins, or approximately $55,000 at the time, were raised in total to allow him to compete in the race. The “#98 Moonrocket” car was painted with the Shiba Inu meme, and for the first time, Bitcoin was promoted at a significant athletic event.
Tipping tool, Reddit, and Twitter
Doge TikTok Community
When a new fad erupted on TikTok in 2020, Dogecoin’s success was sealed.
Prior to the Reddit community-driven GameStop pump, DOGE followers on TikTok had previously witnessed a community’s power to pump a price when a TikToker championed a challenge by encouraging all TikTok users to pay merely $25 each to raise the coin’s price higher.
The TikTok user’s remark rapidly went viral, and the cryptocurrency’s price increased by 20% in a matter of hours. Other TikTokers followed suit, launching similar challenges to boost the price on various days.
The rise of meme coins
Following Dogecoin’s remarkable success, the cryptocurrency market has become a breeding ground for the growth of meme coins. Memes appear to be associated with a new investing notion that goes beyond corporations’ and large institutions’ thirst for money-making assets, not only in the crypto sphere but also in the stock market.
Retail trading and investments have expanded dramatically as a result of the introduction of simple trading platforms such as Robinhood and the opportunity for even non-tech-savvy small investors to finally access stock and cryptocurrency investment plans.
In the crypto and stock market worlds, Dogecoin and GameStop (GME) best exemplify the concept of “assets of the people” because they identify with “goodness” and the potential of small investors to beat the great powers, whales, and speculators when they band together.
Shiba Inu, Floki, and Safemoon are just a few meme coins that compete with Dogecoin. While these coins have yet to discover a compelling use case, Dogecoin is the long-established coin that already enables rapid and secure transactions with a purpose, making it the most desired investment of all.
The popularity of meme coins, notably Dogecoin, is unquestionably tied to successful marketing campaigns and connections with social media influencers and celebrities.
Celebrities, media, and engagement: The Elon Musk effect
Dogecoin has grown into a significant investment tool that is generally accepted by exchanges and is frequently used in institutional investment portfolios. One of the primary reasons for this is the involvement of celebrities such as Snoop Dogg, Kiss leader Gene Simmons, and Elon Musk, who has continuously tweeted about the coin since 2019, causing the cryptocurrency’s price to rise each time.
Elon Musk went from joking about being the Dogecoin CEO to taking it more seriously in a series of tweets implying he owns the cryptocurrency and is working with its developers to improve the system’s transaction efficiency.
DOGE development resumed
Elon Musk’s DOGE development tweet coincided with a rebirth of the software programming process, which had previously been carried out in fits and starts.
With the increased use of cryptocurrency, whether for trading or tipping, established DOGE developers such as Ross Nicolls, who has been working on the project for several years, have expressed concern about scalability.
The DOGE cryptocurrency is inextricably related to the development of Bitcoin Core, not only because it is an indirect fork of it but also because Dogecoin software has been built on Bitcoin technology but tailored to Dogecoin since 2014. The decision to connect Dogecoin to Bitcoin Core was made to ensure the network’s stability, and as a result, DOGE developers had to catch up on multiple Bitcoin Core releases that occurred since DOGE’s previous upgrade in 2014.
Dogecoin also has a community-donated developer fund, which developers can access via a multi-signature wallet. When two or more private keys are required to sign and submit a transaction, a multi-signature wallet can be used to increase the device’s security.
Bitcoin vs. Dogecoin
Despite being fundamentally tied to Bitcoin, Dogecoin’s creators aimed to distinguish their product from BTC, both conceptually and technologically.
Furthermore, Bitcoin’s block reward is halved about every four years. The protocol includes this characteristic, which makes the Bitcoin system deflationary, predictable, and transparent. The last halving event for Dogecoin occurred in April 2014, when the payment was cut from 250,000 to 125,000 coins per block. Later, the protocol was updated to give an infinite supply, eliminating the need for halving and reinforcing the image of DOGE as an inflationary asset.
Elon Musk lauded Dogecoin for its faster transaction speeds and greater scalability than Bitcoin. So, how do they stack up?
To improve scalability and efficiency, a network can be built on top of a blockchain’s underlying protocol, resulting in a second-layer network, also known as a third-party solution. Because Bitcoin’s blocks are generated every 10 minutes, the cryptocurrency is relatively slow and requires a layer-two network, such as the Lightning Network, to enable faster and more efficient transactions. Dogecoin, on the other hand, is more scalable due to its layer-one protocol, which eliminates the need for an additional network. The latter is thought to be superior blockchain technology that does not require a third-party solution. The fundamental blockchain architecture is referred to as layer one. Layer 2, on the other hand, is an overlaying network that sits on top of the blockchain.
Dogecoin will almost certainly never be the next Bitcoin, but it does have the required backing to become a viable payment option, despite all odds.