The role of inflation in the popularity of Dogecoin. History of Dogecoin. Dogecoin today.
The role of inflation and coin supply in the popularity of Dogecoin
Inflation and large coin supply have played a large role in the success of Dogecoin. Because the currency has over 100 billion coins in circulation and the supply is growing, one Dogecoin costs much less than one Bitcoin and less than many of the other coins. This made the entry barrier to purchasing and transacting in Dogecoins very low. This is also one of the reasons why Dogecoin became “digital tipping currency of the Internet” while Bitcoin turned into “digital gold.” Being digital tipping currency, Dogecoin carved its place in the world of cryptocurrencies in 2014, with users sending small payments in Dogecoin to each other. In the beginning of 2014, the daily average number of transactions surpassed 100,000. It went down by April of 2014, yet stayed somewhat steady at between 10,000 and 20,000 transactions per day. You can see a Dogecoin Transactions Historical chart since the inception of the network here: https://bitinfocharts.com/comparison/dogecoin-transactions.html
Transaction fees on the Dogecoin network have also remained extremely low during the entire time of the network existence. While the fees did go up as the popularity of the network increased in the end of 2017, they remained extremely low. For example, the average transaction fee on the Dogecoin network on 12/27/2013 was USD$0.0002. On 11/13/2017 the fee was USD$0.0016.
History of Dogecoin
In 2013, Billy Marcus, a software developer from Portland, Oregon, was thinking about developing a cryptocurrency that would have a broader market appeal and feel more fun than Bitcoin. The idea of Marcus was to create someone that would capture the interest of younger demographic and distance the coin from many controversies that surrounded cryptocurrencies at the time, such as Mt. Gox hack [Mt. Gox launched in 2010 and by 2013 has become the largest cryptocurrency exchange, responsible for over 70% of bitcoin transactions in the world. In 2014, the company started bankruptcy proceedings because it had over 850,000 bitcoins stolen from its accounts].
At the same time, Jackson Palmer, a marketing professional working for Adobe Corporation in Australia, was following the developments of cryptocurrencies and the trends that were occurring on the Internet. One of the trends was the popularity of memes that included sayings of inner dialogue deliberately written in broken English in Comic Sans font and an image of Shiba Inu dog. Someone named the dog in the memes “Doge.” Popular saying included “so scare,” “wow,” “such awake,” “much morning,” “so cereal,” and others. This inspired Palmer to post a tweet that said “Investing in Dogecoin, pretty sure it’s the next big thing.”
To the surprise of Palmer, he started receiving messages that encouraged him to create a coin named Dogecoin. Reddit became a center of discussions about Dogecoin. This led to Palmer registering the website www.Dogecoin.com
Marcus visited Dogecoin.com a few days after the website went live. He found the website to be extremely funny and decided that he wanted to name his future coin Dogecoin. He contacted Palmer and Dogecoin project was born.
Several weeks after Marcus and Palmer launched the network, Dogecoin became the most popular online tipping currency. Users were sending dogecoins to each other as a way of thanking creators of content and websites. Because of the popularity of the currency, the community behind it started using slogan “To the moon!” to show their enthusiasm about the currency and its future. The culture that formed around Dogecoin was the force that drove it forward. The culture led to the creation of a number of serious projects.
Winter Olympics in Sochi, Doge4Water, and Nascar
In January of 2014, Liam Butler has created a fundraising campaign called Dogesled. The goal of the campaign was to help Jamaican athletes Winston Watt and Marvin Dixon participate in the Winter Olympic Games in Sochi, Russia. The athletes have qualified to participate in the games but later learned that their country didn’t have enough money to send them to the games. This was the reason why they turned to the Internet to seek donations.
Dogesled took off very quickly and the Dogecoin community raised over $35,000 for the athletes. The community was raising funds in Dogecoin, which was one of the reasons why the price of the coin went up 50% within less than half a day during the campaign.
Inspired by the success of the Dogesled campaign, Dogecoin community started another project, called Doge4Water. The community ran the project in cooperation with Charity:Water, a non-profit foundation that provides clean water to people in developing countries. The foundation was created in 2006 and as of January of 2018 has helped over 7 million people in 24 countries.
The goal of the Doge4Water campaign was to collect 40 million Dogecoins, which was about USD$30,000 at the time. The campaign did accomplish the goal and had over 4,000 donations. One of the donors has donated over 14 million dogecoins, which in 2014 was around $11,000.
After running Doge4Water, Dogecoin community has decided to become a sponsor of a NASCAR driver Josh Wise and his car. The community raised about $50,000 in Dogecoins in March of 2014 and became an official sponsor of Wise.
Also in 2014, DogeCoin started a project together with RevUp Render, a company that provides graphics-related designer services in the cloud. The challenge was called Lunar Iditarod and was supposed to have multiple stages with the final goal of having three rovers compete in a nine-meter-long race on the surface of the moon.
Dogecoin in 2018
In December of 2017, Dogecoin has surpassed $1 billion in market capitalization and had a trading volume above $100 million on certain days. This led to Jackson Palmer expressing concerns about the cryptocurrency market and Dogecoin. At the same time, Dogecoin developers were very optimistic and excited about the future of the coin. According to them, the growth of Dogecoin price was a sign of market interest and proof that not every cryptocurrency needs a lot of innovation or features to be successful.