Over the weekend, cryptocurrency hit headlines with Harvad University reporting that a student has been exploiting its supercomputers for mining Dogecoins, the resignation of the Mt. Gox CEO from Bitcoin Foundation and the dogecoin meet-up which was also followed by a dogecoin documentary.
While most people are aware of Bitcoins, Litecoins and a few other altcoins, Dogecoins appear to be all a joke. Perhaps the big question many people are asking is what is the deal with Dogecoin and is it a serious Bitcoin alternative?
In this article DOGE and Ð both refer to Dogecoin.
DOGE first came to light on 8th December, 2013, courtesy of Jackson Palmer, a marketer at Adobe, and programmer Billy Markus of Portland, Oregon. The currency is named after a dumb internet meme, and it all started with a tweet from Palmer. He tweeted, “Investing in Dogecoin, pretty sure it’s the next big thing”
I suppose you know about Doge meme. It is an internet joke that is characterized by an idiosyncratic, solicitous dog called Shibu-Inu. The dog is an agile observer of situations and makes excited statements, but it is grammatically challenged.
Palmer’s tweet received much attention with many people encouraging him to make his idea a reality. It didn’t last a week before he bought Dogecoin.com domain and with the help of Billy Markus, DOGE came to life.
The process of mining Dogecoins is referred to as digging. (Read this good article) While it is based on the Litecoin protocol, the two processes differ from each other by a number of parameters. In digging, miners are rewarded by each block with an indiscriminate number of coins, ranging from zero to a specific maximum. The rewards are calculated by a pseudo-random number generator known as Mersenne Twister.
Unlike most altcoins, which are based on Bitcoin’s source code, DOGE shares Luckycoin (Litecoin’s clone) source code with a few tweaks in place. Litecoin is considered as the best alternative to Bitcoin and is the second most valuable cryptocoin.
This currency enjoys all the theoretical appeals of cryptocurrencies, which include anonymity, apparent democratizing power and frictionless transactions. While Bitcoin remains the centre of attention, Ð is its alternative and paints a whole different picture. The Ð community presents itself as fun and communal in nature. It is out to present the better side of cryptocurrency given the criticisms of Bitcoin community, with charges of money laundering, sexism, misogyny, and criminality labelled against the latter.
Here are the basic features of Dogecoin:
Basically, Dogecoins are used in internet tipping system. Suppose you’ve read an article that has touched you, or you have come across a piece of work that you really appreciate and you want to support the person behind it. Of course, you can send that person cash via Paypal or other forms of online payment. However, Dogecoin gives you a unique way to show your appreciation. This is because it is a cyber-currency that has been developed for the kind-hearted who embrace the spirit of tipping. So you can easily grant tips to your social media acquaintances for providing special contents.
Other uses include:
In order to start using Dogecoin, you need to create a Ð wallet. The wallet is your online bank account, but it based securely on your local computer, or in the cloud. Once you have the wallet, you can start collecting coins by trading on virtual currency markets, digging (mining) them, earning them from your business, or receive them as tips from online tipping system. There also other simple ways to collect dogecoins such as sites that gives dogecoins for registering with them or forum threads that give you free coins for commenting on a thread.
If you thought Dogecoin is a joke, then you need to think again! This cryptocurrency has distinguished itself as the best option for people feeling charitable. The community raised $30,000 to support Jamaican Bobsled trip to the Sochi Winter Olympics. Also last week, the community raised 30 million Dogecoins, worth $30,000, for 4 Paws for Ability charity organization.
Dogecoin community portrays itself as the other end of the Bitcoin community. Functionally, the Dogecoin rewrites the cryptocurrency story to help people understand the need for virtual currencies.
Bitcoin is de facto leader of virtual currency, but due to its high volatility, other altcoins such as Dogecoin are emerging as alternatives in purchasing of goods and services. Nevertheless, Dogecoin has distinguished itself as a tipping currency. So instead of just liking a post or commenting on it, you can appreciate the content by an up-vote with real monetary value.
Generally, Cryptocurrencies are difficult to understand. What is even more difficult to comprehend is how an imaginary currency, which started from a simple tweet (based on an exasperating Internet meme), can grow to be worth millions. Though Palmer meant to ridicule the cryptocurrency craze, he ended up creating Ð that has since seen its value skyrocket from zero to nearly $10 million in just over a month of it existence and is currently the fifth most valued cyber-currency. This only justifies that virtual currencies are fast gaining traction as legitimate currency in the society, though Dogecoin presents another different angle to view them. So in a way Dogecoin is a big joke – a joke worth millions of US dollars!