One article explains Dogecoin
Author: Huo Huo
Produced by: Vernacular Blockchain (ID: hellobtc)
Cover: Photo by Kanchanara on Unsplash
The latest news on April 4th, the Twitter logo changed from a blue bird to a Dogecoin emoji. Musk then tweeted a photo with a Dogecoin emoji.
And this is not the first time Musk has pushed Dogecoin up on Twitter. His actions also brought back memories of how the billionaire’s past posts sparked wild gains in Dogecoin.
The most recent one was on November 1, 2022, when Musk tweeted a photo of a Shiba Inu wearing a Twitter T-shirt, which also pushed up the price of Dogecoin.
What is the intention of Musk's repeated intentional or unintentional waves of Dogecoin? Some people say it’s just a joke, some people say it’s a high-risk scam... Today, the vernacular blockchain will take everyone to take a look.
started as a joke
Dogecoin was born as a joke at the end of 2013. Two engineers, Jackson Palmer and Billy Markus, changed the code of Bitcoin and created DogeCoin. Its original intention was just a spoof. Unexpectedly, this move aroused great repercussions from netizens, and quickly led to the birth of Dogecoin.
The original inspiration came from a Shiba Inu. This Shiba Inu, whose real name is Kabosu, comes from Japan. The owner is a kindergarten teacher Sato. , Sato shared photos of Kabosu’s life . In one of the photos, Kabosu folded his hands and smiled triumphantly. His expression was too human. It was the expression on this photo that hit Jackson Palmer.
At that time, Jackson Palmer, an employee of Adobe, wanted to satirize the proliferation of cryptocurrencies at that time, so he added this Doge meme with encrypted asset elements to create a cryptocurrency map with a Doge head portrait. Jackson tweeted the picture and wrote: "Invest in Dogecoin! This is going to be the next big thing." This post was echoed by netizens in both the meme world and the industry. Under the instigation of netizens, I bought the dogecoin.com domain name and asked for partners on Twitter who want to develop Dogecoin together:
“Investing in Dogecoin, pretty sure it’s the next big thing.”
The message on Twitter quickly entered the eyes of IBM engineer Billy Markus, who has also been researching cryptocurrencies and has always hoped to create a cryptocurrency that people can use widely, not just for investment.
Billy contacted Jackson. Although Jackson didn't respond immediately, Billy started to build Dogecoin. He copied the source code of Bitcoin verbatim. Although he didn't understand most of it, he made some simple modifications. :
1) Change the word of Bitcoin to Doge, and change mining (mine) to digging (dig)
2) Change the currency value from 23 million to 100 billion, and greatly reduce the difficulty of digging
3) Change the font to a lively and interesting anime font (comic sans)
It is rumored that the whole process only took about 3 hours, and Billy and Jackson officially launched Dogecoin during a lunch break. It can be said that Jackson created Dogecoin.com, the official portal of Dogecoin, and then Billy developed the first 4 versions of Dogecoin alone.
2 weeks after Dogecoin was born, its daily trading volume surpassed that of Bitcoin. Less than a month after its birth, the website has more than 1 million visits! Later, in Taiwan, he once again became popular with the piece "I Suggest Breaking Up All About Emotional Issues".
In 2014, Billy and Jackson withdrew from the development of Dogecoin one after another. The reason is unknown. It may be that Dogecoin was still worthless at that time, because even the founder himself said when he was interviewed: "We think this is doomed to die. One of the great jokes," as if they didn't have any left for themselves.
A new Dogecoin core development team was formed, consisting of a team of core maintainers supported by over 40 contributors over the years, and Dogecoin has been developed and maintained by them ever since.
However, compared to investors in the "value investment" of Bitcoin in the circle, Dogecoin is a bit of a face, because it was worthless in the first few years, and then it had a market value of tens of billions of dollars. Maybe some things have value in themselves, it's just that gold needs time to shine?
The opportunity is that Dogecoin has gradually become the tipping currency of the famous American online forum Reddit. Because it is cheap, it is favored by a large number of netizens and celebrities, and it can be regarded as the first practical scenario for benchmarking.
At that time, a Reddit netizen wrote a rewarding robot. When a netizen shared a very good content, he could appreciate the robot through a tip and send 5 Dogecoins to the author to express his gratitude.
At that time, each Dogecoin was worth about $0.0005. Although the value was not much, but more importantly, it was a sense of honor. Some people even said: "Getting a tip of 5 Dogecoins is worth more than receiving 2 cents (0.02 U.S. dollars) ) is more enjoyable.”
Despite its origins as a joke, the combination of low prices and ease of purchase has made it easier for anyone interested in cryptocurrencies to participate . As a result, Dogecoin's users expanded rapidly, increasing its value as a cryptocurrency. Cryptocurrency infrastructure, mining pools, and transaction services were also born at the same time. And Dogecoin quickly developed a large and passionate cryptocurrency community, doing some great causes and philanthropy.
For example, in 2014, the Dogecoin community raised 26.5 million Dogecoins (valued at about $30,000 at the time) to support the Jamaican bobsled team to participate in the Sochi Winter Olympics. In March 2014, the Dogecoin community raised over 40 million Dogecoins (worth about $30,000 at the time) to help build clean water wells in Kenya. The Dogecoin Foundation has also teamed up with popular YouTubers Mr Beast and Mark Rober on the TeamSeas initiative, raising $30 million for marine debris removal.
To this day, Dogecoin’s official website still has relevant introductions.
Dogecoin also has a very unique concept. If Bitcoin is a rebellion against the traditional financial system, then it is a rebellion against Bitcoin. One of its main features that is completely opposite to Bitcoin is: Bitcoin is a fixed amount, no For additional issuance, Doge is initially 100 billion, with an unlimited increase of 5% per year, that is, 5 billion Dogecoins are issued each year, and the supply is unlimited .
Another attraction of Dogecoin is the low entry fee. A Bitcoin is worth tens of thousands of dollars, and even a bear market is beyond the reach of ordinary people, while a Dogecoin is worth less than US$1, and the transaction fee is relatively low, which is attractive to investors with limited funds force.
In addition, with the increasing popularity of Dogecoin, more and more trading platforms have announced that they can buy, sell or host Dogecoin.
You see, Dogecoin was originally used as a reward on the famous American online forum Reddit, and later Dogecoin developed into a charity. Dogecoin can then be exchanged for other cryptocurrencies for investment on multiple trading platforms. It is worth mentioning that there are already 1400+ stores around the world that accept customers to pay in Dogecoin, and even Musk announced that he will accept Dogecoin as payment for the SpaceX mission to the moon.
Up to now, Dogecoin has jumped to become the seventh largest cryptocurrency in the world, but who would have thought that it was inspired by a photo of a Shiba Inu Kabosu that appeared on the Internet in 2010!
price jumps repeatedly
The risk of investing in Dogecoin is very high , because its price will change dramatically due to market sentiment, and it may rise sharply in a short period of time, or it may plummet, which is very speculative.
In particular, Musk’s words and deeds have a great impact on the price of Dogecoin . At the beginning of last year, he tweeted consecutively in support of Dogecoin, which caused its price to soar hundreds of times. Dogecoin’s price plummeted on claims that Dogecoin was a scam.
Here, the vernacular blockchain also brings everyone to review several violent fluctuations of Dogecoin.
- The First: The 2017 Cryptocurrency Boom
Around March 10, 2017, the first major injection of Dogecoin into the crypto market followed a massive increase in retail investment, which boosted the prices of all altcoins. Over the course of 70 days, the “funny” cryptocurrency rose more than 1,890% from $0.00021 to a peak of $0.0042. This shattered the previous ATH-All Time High of $0.0021, sending the market cap up $423 million. Shortly thereafter, Dogecoin plunged 75% in a two-week market correction, which in turn affected all cryptocurrencies.
- Second Time: Bitcoin Breaks $19,783, Boosts Dogecoin
By November 2017, the cryptocurrency market saw another strong buying momentum, with huge trading volume propelling Bitcoin to a high of $19,783. The global cryptocurrency market value reached an astonishing $830 billion, which in turn led to the parabolic growth of small market value projects such as Dogecoin.
On January 7, 2018, Dogecoin broke through $0.02, which is 380% higher than the previous high. Its current market cap is $1.6 billion. However, this rally was very short-lived, with the price falling by more than 70% in 8 days, back to $0.0047.
- 3rd time: The crypto market rebounds
On April 14, 2018, the vast majority of crypto projects saw a short-lived recovery just before the entire market entered a "crypto winter" and fell to previous lows. In three days, Dogecoin rose from $0.0020 to $0.0041, an increase of 103%. In comparison, Bitcoin is up 40% in just the same month. But it didn’t take long for Dogecoin’s market capitalization to more than halve from its all-time high.
- Fourth time: Ethereum/Dogecoin bridge test
In September 2018, the first major rally in which Dogecoin was largely uncorrelated with the rest of the crypto market, system testing of the Dogecoin/Ethereum bridge was completed.
This bridge is believed to be a new update that will allow interoperability between the two blockchains. The announcement rekindled community support for the project, and the price of Dogecoin jumped 173% in 48 hours. However, it was later learned that due to the collapse in the price of Ethereum, there was not enough money to continue developing the bridge, so the update was put on hold. Since then, no one has mentioned whether the bridge between Dogecoin and Ethereum will continue. Dogecoin prices also recovered.
- The fifth time: Tiktok became popular
In the middle of 2020, a Tiktok viral video caused a chain reaction, triggering a sharp rise in the price of Dogecoin.
A TikTok netizen launched a challenge called #DogecoinTikTok#, encouraging netizens on the platform to buy Dogecoin and raise its price to $1 each. Some netizens calculated that if all 800 million TikTok users spent $25 to buy Dogecoin, then when Dogecoin rose to $1, each of them would earn $10,000.
There is no doubt that the hype of TikTok netizens has pushed up the price of Dogecoin. As the hype intensified, Dogecoin traded at more than 2.5 times what it was a few weeks ago. Then it gradually fell back.
- Sixth time: WallStreetBets madness, Musk tweets
On January 11, 2021, traditional financial markets were severely disrupted by a subreddit forum called WallStreetBets (aka WSB). These amateur stock investors decided to band together against traditional financial institutions and launched stocks that major hedge funds such as GameStop, BlackBerry, AMC, Nokia, and Bed Bath & Beyond were betting on would lose value.
On January 28, the WSB stock market frenzy spread to Dogecoin and fueled a sharp rally in the cryptocurrency. In less than two days, Dogecoin surged to an ATH of$0.087 on Binance, an increase of 1100%. The pump was fueled in part by several tweets, including one from Musk.
But then Musk said in an interview that Dogecoin is a scam, and then the price plummeted...
- Seventh time: Musk's tweet
On April Fool's Day, April 1, 2021, Musk stated that he would use SpaceX to bring a Dogecoin to the moon.
As soon as the news came out, Dogecoin rose in a straight line, rising by 15% that day. Since then, Dogecoin has started a rapid rise mode: after breaking through $0.1 on April 14, it hit an all-time high of $0.43 on April 19, and the currency price soared by 336% in just one week. Its total market capitalization reached $50 billion on April 20, according to CoinMarketCap, surpassing Ford Motor.
On May 5, the price of Dogecoin rose sharply again, surpassing $0.68 in the intraday session, and the 24-hour increase once exceeded 50%, setting a ATH. As of May, it had a market capitalization of approximately $88 billion at that time, making it the fourth largest cryptocurrency at the time after BTC, ETH and BNB . Later, its price dropped as the popularity of tweets dropped.
- Eighth time: Musk buys Twitter
Dogecoin has seen a parabolic surge in October 2022, during which time Dogecoin has climbed from roughly $0.06 to nearly $0.15, a percentage gain far exceeding Bitcoin's performance at the time.
The immediate reason is that Musk, who has long supported Dogecoin, spent $44 billion to acquire Twitter.
- The Ninth Time: Musk Changes Twitter Bluebird to Dogecoin Symbol
After becoming CEO of Twitter, Musk this morning (April 4) replaced the blue bird icon on the company's website with a picture of the digital currency symbol Shiba Inu, a move that pushed the price of the cryptocurrency Dogecoin soaring more than 30%. .
Looking back since its inception, the price of Dogecoin has soared from less than US$0.0001 in 2013 to US$0.74 in May 2021, skyrocketing thousands of times, then plummeting, and now skyrocketing. The price of Dogecoin fluctuates greatly, so it is not suitable for investors who pursue stable returns.
To sum up, Musk is indeed a key figure in Dogecoin. It can be seen that although there has been an increase between 2017 and 2020, the overall ups and downs are not large. Since Musk's intervention in 2021, Dogecoin has started a roller coaster-like price trend. If dogs are man’s best friend, then for the famous Dogecoin, the best friend must be Musk.
problem that cannot be ignored
In a huge market of more than 5,000 cryptocurrencies, Dogecoin is a special existence. We know that the birth of Dogecoin is completely a black humor. It just originated from Billy and Jackson's cottage on Bitcoin in 2013, and then accidentally exploded. But I didn't expect that because of the price, it would become the "behemoth" it is today.
If the price fluctuation is a major attraction of Dogecoin, and it is an advantage, then these existing problems may give you a more comprehensive and clear understanding of Dogecoin.
1. The development stagnated, and the code was not updated for a long time
Few people know that before Musk took Dogecoin on fire, Dogecoin's blockchain development was more sporadic than other blockchain projects. In the past few years, its basic code maintenance has almost stagnated. The last major development of Dogecoin dates back to November 8, 2019, and between November 10, 2015 and February 4, 2018, the project code did not have any updates. Recently until last month, it was reported that the Dogecoin development team is currently developing two major versions-core updates 1.14.7 and 1.21, but it should not be implemented yet.
2. Almost no ecology, limited application scenarios
In addition to being used as a reward medium on Reddit, Dogecoin is not widely used as a payment method. According to some reports, by 2021, only 1,300 companies will accept Dogecoin as a form of payment. way, a modest achievement that took eight years. Now, there are about 40,000 transfers on the Dogecoin blockchain every day, which is less than a fraction of the daily transactions of Visa and MasterCard.
3. Memes alone may not be sustainable
Moreover, whether Dogecoin, as a value carrier, can undertake long-term value exchange, the answer is obviously uncertain. Although it is undeniable that Dogecoin has allowed many investors to achieve jaw-dropping returns, the fact is also obvious that in a short period of time, it is extremely popular because it relies on the endorsement and platform effect of a few celebrities, and there is an obvious color of idolatry , but without any real value to back it up. In other words, it's full of invisible bubbles.
Barry Silbert, CEO of Digital Currency Group, shared his thoughts on Dogecoin and its market cap. Silbert mentioned that despite Doge ’s potential, the cryptocurrency is not worth tens of billions of dollars in market cap. This can't help but lead to thinking, is the core value of cryptocurrency only in consensus?
4. Fluctuating violently, the market risk is obvious in an irrational state
Looking at the essence through the phenomenon, the price of Dogecoin is completely driven by hype, ignorance of the facts and misinformation, with a short cycle of ups and downs and violent fluctuations.
Although it is said that rising and falling are the basic attributes of investment, and skyrocketing and plummeting are the basic attributes of crypto investment, but from the above, we can see the ups and downs of Dogecoin in crypto assets, and the ups and downs depend entirely on market sentiment. And Memecoin is especially affected by good news in the market. In the long run, it's hard to see long-term investment value without strong fundamentals and real use cases to sustain. It is not a good choice for ordinary investors who want to make stable profits.
5. Musk faces class action lawsuit over Dogecoin
On June 17, 2022, Beijing time, a Dogecoin investor sued Musk, accusing him of supporting Dogecoin by operating a pyramid scheme, or pyramid scheme, and demanding compensation of $258 billion. It is reported that the plaintiff is named Keith Johnson. In his indictment filed in Manhattan Federal Court in New York, he accused Musk and his Tesla and SpaceX companies of extortion, saying that Musk and his company first went around Promoting Dogecoin touts, driving up the price of Dogecoin, and then making its price plummet, thereby profiting from it . Some currency bulls even formed a group to “stop Elon” tweeting.
At that time, SpaceX, the space exploration technology company founded by Musk, was also in constant turmoil. Some SpaceX employees wrote to management publicly condemning Musk's actions and suggesting that the company should be separated from Musk's personal brand.
On Friday (March 31), lawyers for Twitter and Musk asked a federal judge to dismiss a $258 billion lawsuit that accused the billionaire in 2022 of manipulating the price of Dogecoin to make it rise. More than 36000%.
It seems that as best friends, since they came into contact with Dogecoin, it can be said that they have overcome all obstacles with Dogecoin. If this is not love, then what is it?
summary
Of course, there were many imitations of Bitcoin before, and many of them, like DogeCoin, just copied and pasted the code, and then changed it, and now most of them are "dead".
Dogecoin can survive for a long time. I have to say that as the most loyal friend of human beings, one of the reasons may be that this Shiba Inu dog head itself is really too cute.
In addition, based on the community attributes derived from the dog's own meme culture, coupled with the characteristics of short transaction time, low price and more down-to-earth, the audience is wider, and there is a booster effect from the celebrity Musk, thus giving the dog Currency brings different global Liquidity.
Before Musk acquired Twitter, many Dogecoin investors also had high hopes for Musk, and some people suggested that Twitter supports users to reward creators with Bitcoin and Ethereum, but did not issue cryptocurrency wallet products. At that time, some insiders said that Musk might develop an encrypted wallet on Twitter and integrate Dogecoin into the development of Twitter in some form.
Although what is waiting now is not the wallet, but the Dogecoin image has replaced the blue bird, it has to be said that it is also a very obvious signal.
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