What is Dogecoin? (DOGE)

Dogecoin is a cryptocurrency inspired by a popular meme known as Doge, a picture of a Shiba Inu dog accompanied by colorful Comic Sans phrases meant to convey its inner monologue.

Launched at the end of 2013, Dogecoin rose to popularity at a time when developers were just beginning to explore the possibilities afforded by Bitcoin’s (BTC) invention.

Indeed, its creation was an effort to bring personality and accessibility to the new technology, which helped propel Dogecoin into the center of industry conversation into 2014.

More surprising, even to its creators, is that Dogecoin continues to enjoy an enthusiastic fan base and vibrant online community. To this day, its cryptocurrency, DOGE, is still exchanged, predominantly for tipping online content creators or for crowdfunding efforts.

One reason is that Dogecoin operates much like many other cryptocurrencies in that it offers users the ability to exchange value, over the internet, without traditional financial gatekeepers.

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How does Dogecoin work?

The Dogecoin code was initially copied from an earlier now-defunct cryptocurrency called Luckycoin, itself a fork of Litecoin (LTC).

From this earlier design, Dogecoin borrowed a Scrypt-based consensus algorithm to enforce how the network of computers running its software came to consensus on its transaction history.

As with Bitcoin, anyone running the Dogecoin software can dedicate computer power to providing this service – a process often called “mining” – in exchange for the opportunity to be awarded newly minted cryptocurrency.

Dogecoin’s most notable experiment, however, was its monetary policy. For example, there is now no limit on how much Dogecoin can be minted by the software.

Initially the total supply of Dogecoin was capped at 100 billion DOGE, but developers eliminated this a few months after launch with the aim of making its money supply inflationary.

Over time, this abundance of supply would disincentivize miners from securing the Dogecoin blockchain, and in 2014, its mining process was integrated with Litecoin’s. This meant anyone mining Litecoin could also mine Dogecoin without additional work.

As of February 2018, more than 113 billion DOGE have been mined, and 5 billion DOGE continue to be released by the software each year.