What is dogecoin?

That places dogecoin among the most popular cryptocurrencies in the world measured on market value.

As of August 2022, one dogecoin was worth about 0,5 DKK. If we rewind time six years back to August 2016, one dogecoin was worth 0,0015 DKK according to Coinbase .

That’s equal to a rise of 33,233%.

Dogecoin is a so-called memecoin. Meaning that the cryptocurrency is based on a meme - a viral internet joke - but today, the cryptocurrency has gone from being an online joke among a small group of internet users, to being one of the most popular and valuable cryptocurrencies in the world.

The popularity has especially been driven by Elon Musk, who in 2019 began making positive tweets about the cryptocurrency. That culminated in 2021, where Elon Musk and other celebrities publicly supported dogecoin, which made its value explode.

If you’re new to cryptocurrencies, dogecoin could be a great place to start, because it’s popular and well-known.

Table of contents:

• What’s dogecoin’s purpose
• How does dogecoin work?
• The dogecoin story: Who created dogecoin?
• Shiba Inu: Japanese dog, meme, or cryptocurrency?
• From unserious satire to a currency with morals
• How to buy dogecoin

What’s dogecoin’s purpose?

Dogecoin was originally created as sort of a spin-off joke based on the rising interest of trading bitcoin.

Even though the cryptocurrency was meant to be a joke, it was still developed after many of the same principles as cryptocurrencies like bitcoin and ethereum .

Dogecoin’s blockchain is based on the validation method proof-of-work. That’s the same method that bitcoin and ethereum use.

In short, proof-of-work is used to make sure that dogecoin is a safe and trustworthy payment method.

Tip: Read more about dogecoin’s use of proof-of-work here

In comparison to bitcoin and ethereum, there’s no maximum cap on the amount of dogecoins that can be in circulation. That’s one of the reasons that the value of a single dogecoin is relatively low in comparison to the other popular cryptocurrencies.

Dogecoin is typically worth less than 1 DKK while bitcoin and ethereum have values of +170.000 DKK and +12.000 DKK respectively for each coin.

And that can be attributed to the large number of dogecoins in existence. As of August 2022, there were more than 132,7 billion dogecoins, every minute, that number increases by about 10,000 dogecoins.

To compare, there’s only about 121 million ethereum and 19 million bitcoins available. Bitcoin is programmed to only produce 21 million bitcoins in total, and then it’s over, while ethereum has a maximum cap of 18 million coins per year.

Tip: Read more about bitcoin mining and ethereum mining .

The cap is a contributor to the fact that the prices on bitcoin and ethereum can rise quite quickly as the demand exceeds the supply.

The price of dogecoin is also controlled by demand, but because the demand theoretically is infinite, the price is kept constant.

When Elon Musk began tweeting positively about dogecoin in 2019, the demand for dogecoin sky-rocketed so massively that the price of a single coin managed to rise by thousands of percent.

How does dogecoin work?

Dogecoin is based on a proof-of-work blockchain. Actually, dogecoin is a “hard-fork” of the cryptocurrency, luckycoin, which is a hard-fork of litecoin, which in itself is a hard-fork of bitcoin.

In this connection, hard-fork just means that dogecoin is based on the code from luckycoin, which is based on the code in litecoin, which lastly is based on bitcoin’s code. 

In that way, there’s a direct correlation between the technical structure between bitcoin and dogecoin. Of course with significant differences on certain points - for example, there’s no maximum cap on the amount of dogecoins, as opposed to bitcoin which has a cap.

The special thing about luckycoin, upon which dogecoin is based, is the way that the reward mechanism is coded. When people work for bitcoin’s blockchain - a work that is also called bitcoin mining - they’re rewarded with a certain amount of bitcoins as compensation for their time and the resources they have used to do the work.

For bitcoin, it will always be a certain and predetermined amount of coins given as a reward. In 2022, the amount was 6,25 bitcoins, for example.

For luckycoin, and thus dogecoin, the amount is random. It could be anywhere between 0 and thousands of coins that the person will be rewarded with.

The idea was, that there was no way people would take the cryptocurrency seriously if it were random how many coins you would get when working for the blockchain.

Remember:

“working” for a blockchain is the very motor of a cryptocurrency, and without that work any cryptocurrency wouldn’t function. Read more about blockchain here .

The developers were quickly realising that the community and the support for the dogecoin project was so large, that they changed the amount from being random to being 10,000 dogecoins per transaction block.

Because dogecoin adds a new block on the blockchain every minute, that is equivalent to 5,2 billion new dogecoins being brought into circulation every year.

So, if you’re planning to buy dogecoins you need to consider the fact that dogecoin technically is built to decrease in value over time.

Just like other cryptocurrencies , the value of a dogecoin is determined by supply and demand. But because dogecoin’s supply is so large, it would take huge amounts of demand to get the value to increase. Opposite is the built in structure in bitcoin, which is made to have less and less bitcoins over time. 

Historically speaking, there have also been periods with large demands on dogecoin, where the value also increased by thousands of percent.

Buy dogecoin

Cryptocurrencies can rise and fall

When you trade cryptocurrencies, you need to be aware that it carries a large risk. The value of your cryptocurrency can both rise and fall , and you can risk losing the entire amount you’ve invested in cryptocurrencies. 

Cryptocurrency trading is done through Lunar Block. Lunar Block is not regulated by the Danish Financial Supervisory Authority (Finanstilsynet). That means you won’t have the same protection as when trading e.g. stocks or other regulated assets.

The dogecoin-story: Who created dogecoin?

Dogecoin was created by the developer Jackson Palmer in 2013, where he worked at Adobe Inc. in Sydney, Australia. Palmer’s reason to develop dogecoin was originally satirical. He wanted to poke fun at the newfound hype that cryptocurrencies saw already back then.

Perhaps a bit unexpectedly, dogecoin was welcomed by crypto communities with open arms, and Palmer then decided to buy the domain dogecoin.com .

On the other side of the world sat developer Billy Markus, who at the time was working for IBM. He had ambitions of developing his own cryptocurrency, but didn’t succeed in gathering a community around his projects.

Markus noticed the beginning hype surrounding dogecoin, and reached out to Palmer and asked if he could develop the software being an actual dogecoin.

They began working together, and what started as a satirical internet joke, has since developed into a billion dollar business.

Shiba Inu:  Japanese dog, meme, or cryptocurrency?

Dogecoin’s logo portrays a dog - more precisely a Japanese dog of the race Shiba Inu (Japanese for “small dog”). The image of a Shiba Inu is a reference to a popular internet joke - or meme. The joke goes by the name “doge ”, which is where dogecoin gets its name.

That Palmer chose to use a Shiba Inu as the logo for his cryptocurrency once again highlights that it was all meant as a joke from the very beginning.

From unserious satire to currency with morals

The wide community that blossomed around the dogecoin project meant that the cryptocurrency gained actual value.

In the beginning, the dogecoin community was mainly made up of completely regular people, who found each other via internet-based message boards such as Reddit, Twitter and TikTok.

The community has historically been great at joining forces on different charity projects, where dogecoin has been used as a payment method.

In 2014, the dogecoin community helped the Jamaican bobsledding team get to the Winter Olympics in Sochi. Here, the dogecoin community donated 27 million dogecoins to the bobsledding team, which is equal to 30,000 dollars.

That same year, a member of the dogecoin community donated dogecoins equivalent to 11,000 dollars to set up a well in Kenya, so the population in that community could have clean drinking water.

Very much in line with dogecoin morals, the cryptocurrency has adopted the unofficial tagline: Do Only Good Everyday (DOGE).

In contrast to that story, Palmer chose to leave the project indefinitely in 2015, since he felt that the dogecoin community had developed into a “toxic community”.

Today, dogecoin is one of the largest cryptocurrencies in the world, and on their website there’s still references to the doge-meme, charity, community and humour.

How you can buy and sell dogecoin

With Lunar Block it’s easy to get started trading dogecoin. All you have to do is download the Lunar app and sign up to Lunar Block.

You need to take a test in connection to your sign up, where we’ll ask questions about the risks of cryptocurrency . You can get to know the risks in the Lunar app before you take the quiz. Once you’re approved, you can trade dogecoin right away.

Cryptocurrencies can rise and fall

When you trade cryptocurrencies, you need to be aware that it carries a large risk. The value of your cryptocurrency can both rise and fall, and you can risk losing the entire amount you’ve invested in cryptocurrencies.

Cryptocurrency trading is done through Lunar Block. Lunar Block is not regulated by the Danish Financial Supervisory Authority (Finanstilsynet). That means you won’t have the same protection as when trading e.g. stocks or other regulated assets.

We do not counsel

We do not advise on currencies and do not make recommendations for either buying or selling. We can provide factual information about the different currencies, but past price developments are not an indication of future developments.

No information from Lunar Block should therefore be considered as recommendations and all decisions are up to you alone.