Dogecoin

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Dogecoin
Dogecoin logo.pngDogecoin alternate logo.png
ObverseReverse
Date of introduction8 December 2013; 3 months ago (2013-12-08)
User(s)International
InflationApproximately 100 billion coins to be mined by end of 2014. Thereafter, 5.2 billion new coins per year.
SymbolÐ,[1] Ɖ,[citation needed] D
NicknameDoge
PluralDOGE, Dogecoins
 
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Dogecoin
Dogecoin logo.pngDogecoin alternate logo.png
ObverseReverse
Date of introduction8 December 2013; 3 months ago (2013-12-08)
User(s)International
InflationApproximately 100 billion coins to be mined by end of 2014. Thereafter, 5.2 billion new coins per year.
SymbolÐ,[1] Ɖ,[citation needed] D
NicknameDoge
PluralDOGE, Dogecoins

Dogecoin (/ˈdɡkɔɪn/ dohgkoyn,[2][3] code: DOGE, symbol: Ð[1] and D), is a Litecoin-derived[4] cryptocurrency featuring a Shiba Inu from the "Doge" Internet meme on its logo.[5][6][7][8] It was introduced on December 8, 2013.[9] Compared to other cryptocurrencies, Dogecoin has a fast initial coin production schedule: there will be approximately 100 billion coins in circulation by the end of 2014 with 5.2 billion coins every year thereafter. As of 1 March 2014 (2014-03-01), over 50 billion Dogecoins have been mined.[10] While there are currently few commercial applications for Dogecoin, the currency is gaining traction as an Internet tipping system, in which social media users grant Dogecoin tips to other users for providing interesting or noteworthy content.[11] Many members of the Dogecoin community, as well as members of other cryptocurrency communities, use the phrase "To the moon!" to describe the overall sentiment of the coin's rising value.[12][13][14]

Overview and history[edit]

A Dogecoin paper wallet

Dogecoin was created by programmer Billy Markus from Portland, Oregon, who hoped to create a fun cryptocurrency that could reach a broader demographic than Bitcoin. In addition, he wanted to distance it from the controversial history behind Bitcoin, mainly its association with the Silk Road online drug marketplace.[15] At the same time, Jackson Palmer, a member of Adobe Systems' marketing department in Sydney, Australia, was encouraged on Twitter by a student at Front Range Community College to make the idea a reality.[16]

After receiving several mentions on Twitter, Palmer purchased the domain dogecoin.com and added a splash screen, which features the coin's logo and scattered Comic Sans text. Markus saw the site linked in an IRC chat room, and started efforts to create the currency after reaching out to Palmer. Markus based Dogecoin on the existing cryptocurrency, Luckycoin,[17] from which it derived its randomized reward received for mining a block, which was later changed to a static block reward in March of 2014. In turn, Luckycoin is based on Litecoin,[4] which also uses scrypt technology in its proof-of-work algorithm. The use of scrypt means that miners cannot use SHA-256 Bitcoin mining equipment. Dogecoin was officially launched on December 8th.[18][19] The Dogecoin network was originally intended to produce 100 billion Dogecoins.[20][21][22]

On December 19, 2013, Dogecoin jumped over 300 percent in value in 72 hours, rising from USD$0.00026 to $0.0095,[23] with a volume of hundreds of Bitcoins per day.[24] This growth occurred during a time when Bitcoin and many other cryptocurrencies were reeling from China's decision to forbid Chinese banks from investing Chinese Yuan into the Bitcoin economy.[4] Three days later, Dogecoin experienced its first major crash by dropping by 80% due to large mining pools seizing opportunity in exploiting the very little computing power required at the time to mine the coin.[25]

On December 24, 2013, The Reserve Bank of India cautioned users of Dogecoin and other virtual currencies on the risks associated with them.[26] On December 25, 2013, the first major theft attempt of Dogecoin occurred when millions of coins were stolen during a hacking attempt on the online wallet platform Dogewallet.[27] The hacker gained access to the platform's filesystem and modified its send/receive page to send any and all coins to a static address.[28][29] This incident spiked Tweets about Dogecoin making it the most mentioned altcoin on Twitter.[30] To help those who lost funds on Dogewallet after its breach, the Dogecoin community started an initiative named "SaveDogemas" to help donate coins to those who lost them. Approximately one month later, enough money was donated to cover all of the coins that were lost.[31] By January 2014, the trading volume of Dogecoin surpassed that of Bitcoin and all other crypto-currencies combined.[32]

On January 19, 2014, a fundraiser was established by the Dogecoin community to raise $50,000 for the Jamaican Bobsled Team, which had qualified for, but could not afford to go to, the Sochi Winter Olympics. By the second day, $30,000 worth of Dogecoin was donated,[33] and the Dogecoin to Bitcoin exchange rate rose by 50%.[34][35][36][37][38] The Dogecoin community also raised funds for a second Sochi athlete Shiva Keshavan.[39] As of 13 February 2014 (2014-02-13), Dogecoin has a market capitalization of USD$81 million.[40]

Use and exchanges[edit]

Several online exchanges offer DOGE/BTC [41] and DOGE/LTC [42] trading. Two exchanges, Bter and BTC37, offer DOGE/CNY trading [43] trading. On January 8, 2014, AltQuick.co was the first exchange to launch DOGE/USD exchange.[44] On January 30, 2014, Canada-based exchange Vault of Satoshi also announced DOGE/USD and DOGE/CAD trading.[45][46] On February 2014, Hong Kong-based exchange Asia Nexgen announced that they would support the trading of Dogecoins in all major currencies. China-based exchange BTC38 also added their support on the Dogecoin exchange, boosting the market capitalization over 24 hours.[47][48] In the first day of trading, Dogecoin was the second-most traded currency on the platform, after BTC.[49]

On January 31, 2014, trading volume across the major exchanges was valued at $1.05 million USD. The market cap was USD$60 million. Three exchanges accounted for the majority of volume: Bter (60%). Cryptsy (23%), and Vircurex (10%). The most traded currency pairs were DOGE/BTC (50%), DOGE/CNY (44%) and DOGE/LTC (6%).[50]

Trading physical, tangible items in exchange for DOGE takes place on online communities such as Reddit and Twitter.[51][52] On December 23, 2013, Tristan Winters of the online journal Bitcoin Magazine discussed what was needed for Dogecoin to replace Bitcoin.[53]

The first Dogecoin ATM was demoed at Coinfest in Vancouver in February 2014.[54] Two bitcoin ATMs supporting Dogecoins and other altcoins opened in Tijuana, Mexico on March 17th, 2014.[55] These ATMs, operated by the firm Bitcoin42, are the first cryptocurrency ATMs in South America and the first to support alternative cryptocurrencies.[56]

On March 17th, 2014, an anonymous benefactor donated 14 million dogecoin to a campaign to provide drinking water for parts of drought-stricken Kenya via a Twitter-based tip service.[57] It was proclaimed as the "most valuable tweet in history".[58]

Dogecoin has also been used to sell a house,[59] and in the porn industry.[60]

Transactions[edit]

Like Bitcoin and Litecoin, Dogecoin functions using public-key cryptography, in which a user generates a pair of cryptographic keys: one public and one private. Only the private key can decode information encrypted with the public key; therefore the keys' owner can distribute the public key openly without fear that anyone will be able to use it to gain access to the encrypted information. All Dogecoin addresses are public key hashes; they are a string of 34 numbers and letters starting with the letter D. An example address (public key) is DJ7zB7c5BsB9UJLy1rKQtY7c6CQfGiaRLM, that belongs to Dogecoin Foundation.[61] The public key is the Dogecoin address to which other users can send Dogecoins. The private key, however, allows full access to the Dogecoin wallet; it must be kept secret and secure.

Mining parameters[edit]

Dogecoin's implementation differs from Litecoin by several parameters. Dogecoin's block time is 1 minute, and the difficulty retarget time is 4 hours. Each block rewards miners with a random number of coins between 0 and a defined maximum, given in the block schedule listed below. From block 600,001 onwards, there will be a fixed reward of 10,000.[9] Reward is calculated using Mersenne Twister pseudo-random number generator.[62]

On 12 March 2014, version 1.6 of the Dogecoin client was announced. This version has a fixed reward (instead of random) and a new difficulty algorithm called DigiShield. [63]

Block schedule[edit]

Block numbersPer-block rewardFirst blockExpected coins produced (approx)Expected total circulation (approx)
1-100,0000-1,000,000 (random)8 December 2013 [64]50,000,000,00050,000,000,000
100,001-144,9990-500,000 (random)14 February 2014 [65]11,250,000,00061,250,000,000
145,000-200,000250,000 (fixed)17 March 2014 [66]13,750,000,00075,000,000,000
200,001-300,000125,000 (fixed)24 April 2014 (estimated)12,500,000,00087,500,000,000
300,001-400,00062,500 (fixed)2 July 2014 (estimated)6,250,000,00093,750,000,000
400,001-500,00031,250 (fixed)9 September 2014 (estimated)3,125,000,00096,875,000,000
500,001-600,00015,625 (fixed)18 November 2014 (estimated)1,562,000,00098,437,500,000
600,001+10,000 (fixed)26 January 2015 (estimated)5,256,000,000 per yearNo limit

Currency supply[edit]

Unlike deflationary cryptocurrencies (like Bitcoin), there is no limit to how many Dogecoins can be produced. This puts Dogecoin in the same league as other inflationary coins like Peercoin. According to the current production schedule, approximately 98 billion coins will have been released by January 2015, when block 600,000 is mined. Thereafter, approximately 5.2 billion more coins will be produced per year, in perpetuity. During December 2013 and January 2014, Dogecoin's developers discussed in public forums whether this should be changed,[21][67] and, on February 2, 2014, Dogecoin founder Jackson Palmer announced that the supply of coins would remain uncapped.[68]

References[edit]

  1. ^ a b "README.md". Dogecoin Integration/Staging Tree (Source code). 5 February 2014. Retrieved February 17, 2014. 
  2. ^ How to Mine Dogecoins on YouTube
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  4. ^ a b c David Gilbert (20 December 2013). "What is Dogecoin? The Meme that Became the Hot New Virtual Currency.". International Business Times. Retrieved December 2013. 
  5. ^ Andrew Couts (12 December 2013). "Wow. Dogecoin is the most Internet thing to happen, ever.". Digital Trends. Retrieved December 2013. 
  6. ^ Brittany Hillen (10 December 2013). "Dogecoin digital currency takes on Bitcoin with a bit of meme flair". Slashgear. Retrieved December 2013. 
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  8. ^ "Cryptocoin Market Capitalization". coinmarketcap.com. Retrieved 2013-12-19. 
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  13. ^ Andrew Couts (January 20, 2014). "Dogecoin users raise $30,000 to send Jamaican bobsled team to Winter Olympics". Digital Trends. Retrieved January 22, 2014. 
  14. ^ Derek Ross (December 31, 2013). "Much application. Such coin. Very Android. Dogecoin Wallet now available on Google Play". Phandroid. Retrieved January 22, 2014. 
  15. ^ Patrick McGuire. "Such Weird: The Founders of Dogecoin See the Meme Currency's Tipping Point". Motherboard. Vice Media. Retrieved 23 December 2013. 
  16. ^ Rob Wile (19 December 2013). "What is Dogecoin?". Business Insider. Retrieved December 2013. 
  17. ^ http://www.seattlepi.com/technology/heavy/article/Dogecoin-5-Fast-Facts-You-Need-to-Know-5079680.php
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  19. ^ Dogecoin - https://bitcointalk.org/index.php?topic=361813.msg3872986#msg3872986
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  21. ^ a b "Not actually capped at 100 billion?". 
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  30. ^ Ofir Beigel (7 January 2014). "Please, not another coin - which altcoins are worth taking a look at". 99Bitcoins. Retrieved January 2014. 
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  33. ^ "Dogecoin Jamaican Bobsled Team Olympics". Business Insider. 2014-01-20. Retrieved 2014-01-25. 
  34. ^ Alex Hern. "It's bobsleigh time: Jamaican team raises $25,000 in Dogecoin | Technology". theguardian.com. Retrieved 2014-01-25. 
  35. ^ Rodriguez, Salvador (2014-01-20). "Jamaican bobsled team boosts value of Dogecoin, currency based on meme". latimes.com. Retrieved 2014-02-02. 
  36. ^ "Dogecoin Jamaican Bobsled Team Olympics". Business Insider. 2014-01-20. Retrieved 2014-02-02. 
  37. ^ "Jamaican bobsled team raises $30,000 in Dogecoin for trip to Sochi | The Rundown | PBS NewsHour". PBS. Retrieved 2014-02-02. 
  38. ^ Alex Hern. "It's bobsleigh time: Jamaican team raises $25,000 in Dogecoin | Technology". theguardian.com. Retrieved 2014-02-02. 
  39. ^ Devin Coldewey (2014-01-29). "Dogecoin cryptocurrency donors help send Indian athletes to Sochi". NBC News.com. Retrieved 2014-02-02. 
  40. ^ "Crypto-Currency Market Capitalizations | DogeCoin 30-Day Market Cap Graph". Coinmarketcap.com. Retrieved 2014-02-02. 
  41. ^ http://www.cryptocoincharts.info/#jump-doge-btc
  42. ^ http://www.cryptocoincharts.info/#jump-doge-ltc
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  44. ^ dcmagnates.com. "AltQuick.co Becomes Man’s 2nd Best Friend: Allows Dogecoin Buying with USD". 
  45. ^ coindesk.com. "Vault of Satoshi Rolls Out New Altcoin Support". 
  46. ^ "Vault of Satoshi Adds New Alt-Coins and a CAD Order Book, Coin-to-Coin Trading Imminent". Yahoo Finance. Retrieved 31 January 2014. 
  47. ^ coindesk.com. "Asian Exchange Additions Drive Dogecoin Price Surge". 
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  50. ^ "DOGE charts and information". DOGE/BTC and DOGE/CNY. Retrieved 31 January 2014. 
  51. ^ Nathan Ingraham (16 December 2013). "Bitcoin is so 2013: Dogecoin is the new cryptocurrency on the block". The Verge. Retrieved December 2013. 
  52. ^ J. Duaine Hahn (16 December 2013). "Move Over Bitcoin: Dogecoin is Here". Complex Tech. Retrieved December 2013. 
  53. ^ http://bitcoinmagazine.com/9109/will-dogecoin-replace-bitcoin/
  54. ^ Hajdarbegovic, Nermin (18 Feburary 2014). "DIY Dogecoin ATM Demos at CoinFest Vancouver". Coindesk. Retrieved 17 March 2014. 
  55. ^ Hajdarbegovic, Nermin (17 March 2014). "Mexico’s First Bitcoin ATMs Will Also Deal in Altcoins". Coindesk. Retrieved 17 March 2014. 
  56. ^ "Press Release: Bitcoin42 ATM’s are opening next week at the BIT Center in Tijuana!". Bitcoin42. Retrieved 17 March 2014. 
  57. ^ Coldewey, Devin (17 March 2014). "Tweet Instantly Sends Charity $11,000 - In Dogecoin". NBC News. Retrieved 17 March 2014. 
  58. ^ Gilbert, David (17 March 2014). "'Most Valuable Tweet in History' Donates $11,000 Worth of Dogecoin to Kenyan Water Charity". International Bussiness Times. 
  59. ^ Imam, Jareen. "Man selling home for $135,000 in Dogecoins". CNN. Retrieved 17 March 2014. 
  60. ^ "Fox on Reddit: Porn star looks to accept virtual currency Dogecoin". FoxNews.com. 27 February 2014. Retrieved 17 March 2014. 
  61. ^ "Donation directory". foundation.dogecoin.com. Dogecoin Foundation. Retrieved 2014-01-25. 
  62. ^ "Dogecoin C++ code for generating block rewards". 
  63. ^ "Dogecoin1.6 - It's ready. All you need to know inside.". Reddit. Retrieved 12 March 2014. 
  64. ^ "Dogechain - The official Dogecoin blockchain!". Blockchain Record for Block 1. Retrieved 30 January 2014. 
  65. ^ "Dogechain - The official Dogecoin blockchain!". Blockchain Record for Block 100000. 
  66. ^ "Dogechain - the official Dogecoin blockchain!". Blockchain Record for Block 145000. Retrieved 17 March 2014. 
  67. ^ "You should all be aware of this: Current algorithm increases the supply by at least 5,256,000 D yearly for eternity. The devs plan to make the supply fixed". Reddit. Retrieved 30 January 2014. 
  68. ^ "Dogecoin to allow annual inflation of 5 billion coins each year, forever". Ars Technica. Retrieved 4 February 2014. 

External links[edit]