Dogecoin

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Dogecoin
Official logoAlternative logo
Date of introduction December 8th, 2013
User(s) International
Inflation Approximately 100 billion coins to be mined by end of 2014. Thereafter, 5.2 billion new coins per year.
Symbol D, Ɖ
Nickname Doge
Plural DOGE, Dogecoins
Printer Billy Markus

Dogecoin (/ˈdoʊʒkɔɪn/,[1] code: DOGE, symbol: Ɖ and D), is a Litecoin-derived[2] cryptocurrency that features the Shiba Inu from the "Doge" Internet meme on its logo.[3][4][5][6] It was introduced on 8 December, 2013. [7] Dogecoin has a fast initial coin production schedule, compared with other cryptocurrencies. There will be approximately 100 billion coins in circulation by the end of 2014. Thereafter, 5.2 billion coins will be produced per year. As of the 1st of February 2014, 40,578,746,592 Dogecoins have been mined.[8] 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.[9] Dogecoins are associated with the motto "To the moon!".[10][11][12]

Overview and history

Dogecoin was created by programmer and former IBM engineer Billy Markus of Portland, Oregon. He was originally trying to tinker with an existing cryptocurrency of Markus's called "Bells" based on Nintendo's Animal Crossing. His hopes were reaching a broader demographic than the investors who made up Bitcoin's economy and something that wouldn't be involved with the controversial history behind Bitcoin (namely its association with the Silk Road).[13]

At the same time, his friend Jackson Palmer, a worker for a marketing department in Sydney, Australia, for Adobe Systems, and the original individual who first conceived of the idea for Dogecoin, was encouraged by a student at Front Range Community College on Twitter to make the idea reality.[14] This led Palmer to reach out to Markus.[15]

After getting several mentions on Twitter, Palmer bought the domain dogecoin.com, which was shown to Markus and quickly began the partnership between Markus and Palmer, launching the coin shortly after the development of Markus' Dogecoin wallet was done.[16] Markus based Dogecoin on the existing currency Litecoin,[2] which also uses scrypt technology in its proof-of-work algorithm, meaning that miners cannot take advantage of specialized Bitcoin-mining equipment to mine at higher speeds. The Dogecoin network was originally intended to produce 100 billion Dogecoins.[17][18][19]

On December 19, Dogecoin jumped more than 300 percent in value in 24 hours, rising from $0.00026 to $0.00095,[20] with a volume of hundreds of Bitcoins per day[21] 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.[2] On the 22nd of December, 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.[22]

On December 24, 2013 The Reserve Bank of India cautioned users of Dogecoin and other virtual currencies on the risks associated with them.[23] On Christmas of 2013, the first major theft attempt of Dogecoin happened when millions of coins were stolen during a hacking attempt on the online wallet platform Dogewallet,.[24] 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.[25][26] This incident spiked Tweets about Dogecoin making it the most mentioned altcoin on Twitter. [27] By January 2014, the trading volume of Dogecoin surpassed that of Bitcoin and all other crypto-currencies combined.[28]

On January 19, a fundraiser was established by the Dogecoin community to raise $30,000 for the Jamaican Bobsled Team, which had qualified for, but could not afford to go to, the Sochi Winter Olympics; $30,000 was donated by the second day,[29] and the Dogecoin to Bitcoin exchange rate rose by 50%.[30][31][32][33][34] As of 29th January, Dogecoin has a market capitalization of 58.9 million USD.[35] The Dogecoin community has raised funds for a second Sochi athlete Shiva Keshavan.[36]

Use and exchanges

Several online exchanges offer DOGE/BTC [37] and DOGE/LTC [38] trading. A single exchange, Bter, offers DOGE/CNY [39] trading. On January 8th, AltQuick.co was the first exchange to launch DOGE/USD trading. [40] On January 30, Canada-based exchange Vault of Satoshi also announced DOGE/USD and DOGE/CAD trading.[41][42] In the first day of trading, Dogecoin was the second-most traded currency on the platform, after BTC.[43]

On 31 January 2014, trading volume across the major exchanges was valued at $1.05 million USD. The market cap was $60 million USD. 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%). [44]

Trading in real-world items in exchange for DOGE takes place on online communities such as Reddit and Twitter.[45][46]

Regulation

Unlike many popular cryptocurrencies, DOGE is primiarily traded on Cryptsy, a US-based FinCEN-regulated exchange. DOGE is the highest volume cryptocurrency traded there and rivals the volume of most large unregulated offshore exchanges.

Transactions

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[47] The public key is the Dogecoin address to which other users can send Dogecoins. The private key, however, must be kept secret and secure.

Mining parameters

Dogecoin's implementation differs from Litecoin in 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 below. From block 600,001 onwards, there will be a fixed reward of 10,000. [7]

Block schedule

Block Numbers Per-Block Reward First Block Expected Coins Produced (approx) Expected Total Circulation (approx)
1-100,000 0-1,000,000 (random) 8 December, 2013 [48] 50,000,000,000 50,000,000,000
100,001-200,000 0-500,000 (random) 14 February, 2014 (estimated)[49] 25,000,000,000 75,000,000,000
200,001-300,000 0-250,000 (random) 25 April, 2014 (estimated) 12,500,000,000 87,500,000,000
300,001-400,000 0-125,000 (random) 3 July, 2014 (estimated) 6,250,000,000 93,750,000,000
400,001-500,000 0-62,500 (random) 10 September, 2014 (estimated) 3,125,000,000 96,875,000,000
500,001-600,000 0-31,250 (random) 19 November, 2014 (estimated) 1,562,000,000 98,437,500,000
600,001+ 10,000 (fixed) 27 January, 2015 (estimated) 5,256,000,000 per year No limit

Coin supply

There is no fixed maximum number of coins. According to the 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.[18][50] On February 2nd Dogecoin founder Jackson Palmer announced that the supply of coins would remain uncapped. [51]

References

  1. ↑ Stephen Hutcheon. "The rise and rise of dogecoin, the internet's hottest cryptocurrency". Sydney Morning Herald. Fairfax Media. Retrieved 23 January 2013. 
  2. ↑ 2.0 2.1 2.2 David Gilbert (20 December 2013). "What is Dogecoin? The Meme that Became the Hot New Virtual Currency.". International Business Times. Retrieved December 2013. 
  3. ↑ Andrew Couts (12 December 2013). "Wow. Dogecoin is the most Internet thing to happen, ever.". Digital Trends. Retrieved December 2013. 
  4. ↑ Brittany Hillen (10 December 2013). "Dogecoin digital currency takes on Bitcoin with a bit of meme flair". Slashgear. Retrieved December 2013. 
  5. ↑ "Dogecoin Order Book". coinedup.com. Retrieved 2013-12-19. 
  6. ↑ "Cryptocoin Market Capitalization". coinmarketcap.com. Retrieved 2013-12-19. 
  7. ↑ 7.0 7.1 "Dogecoin - very currency many coin". Retrieved 30 January 2014. 
  8. ↑ "Dogechain - The official dogecoin blockchain!". Dogechain.info. Retrieved 2014-01-25. 
  9. ↑ "An Interview With The Creator Of Dogecoin: The Internet’s Favourite New Currency". Junkee.com. Retrieved 2014-01-22. 
  10. ↑ Andrew Couts (December 19, 2013). "To the moon! Dogecoin fetches 300 percent jump in value in 24 hours". Digital Trends. Retrieved January 22, 2014. 
  11. ↑ Andrew Couts (January 20, 2014). "Dogecoin users raise $30,000 to send Jamaican bobsled team to Winter Olympics". Digital Trends. Retrieved January 22, 2014. 
  12. ↑ Derek Ross (December 31, 2013). "Much application. Such coin. Very Android. Dogecoin Wallet now available on Google Play". Phandroid. Retrieved January 22, 2014. 
  13. ↑ Patrick McGuire. "Such Weird: The Founders of Dogecoin See the Meme Currency's Tipping Point". Motherboard. Vice Media. Retrieved 23 December 2013. 
  14. ↑ Jason Mick (18 December 2013). "Dogecoins and Its IBM Developer Ride Meme to $130M+ Fortune". DailyTech. Retrieved December 2013. 
  15. ↑ Rob Wile (19 December 2013). "What is Dogecoin?". Business Insider. Retrieved December 2013. 
  16. ↑ Ashe Schow (19 December 2013). "Internet gold: Doge + Bitcoin = Dogecoin". Washington Examiner. Retrieved December 2013. 
  17. ↑ Danny Vega (9 December 2013). "Dogecoin: 5 Fast Facts You Need to Know.". Heavy.com. Retrieved December 2013. 
  18. ↑ 18.0 18.1 "Not actually capped at 100 billion?". 
  19. ↑ Miles Klee (10 December 2013). "With its own cryptocurrency, Doge has officially conquered 2013". The Daily Dot. Retrieved December 2013. 
  20. ↑ Andrew Couts (19 December 2013). "To the moon! DogeCoin fetches 300 percent jump in value in 24 hours.". Digital Trends. Retrieved December 2013. 
  21. ↑ Nekomata (25 December 2013). "2014: The Year of Dogecoin? And where to buy DOGE.". KonNeko.com. Retrieved January 2013. 
  22. ↑ Rob Wile (22 December 2013). "Dogecoin Prices Crashed This Weekend". Business Insider. Retrieved December 2013. 
  23. ↑ "RBI cautions users of Virtual Currencies against Risks". 24 December 2013. Retrieved December 2013. 
  24. ↑ Ashley Feinberg (26 December 2013). "Millions of Meme-Based Dogecoins Stolen on Christmas Day". Gizmodo. Retrieved December 2013. 
  25. ↑ Catherine Shu (25 December 2013). "Such Hack. Many Dogecoin. Very Disappear. So Gone. Wow.". TechCrunch. Retrieved December 2013. 
  26. ↑ Salvador Rodriguez (26 December 2013). "Millions of Dogecoins, currency based on a meme, are reported stolen". Los Angeles Times. Retrieved December 2013. 
  27. ↑ Ofir Beigel (7 January 2014). "Please, not another coin - which altcoins are worth taking a look at". 99Bitcoins. Retrieved January 2014. 
  28. ↑ John Russell (15 January 2014). "Dogecoin is the Bitcoin world’s most traded currency, but it’s unlikely to be its most valuable". The Next Web. Retrieved January 2014. 
  29. ↑ "Dogecoin Jamaican Bobsled Team Olympics". Business Insider. 2014-01-20. Retrieved 2014-01-25. 
  30. ↑ Alex Hern. "It's bobsleigh time: Jamaican team raises $25,000 in Dogecoin | Technology". theguardian.com. Retrieved 2014-01-25. 
  31. ↑ Rodriguez, Salvador (2014-01-20). "Jamaican bobsled team boosts value of Dogecoin, currency based on meme". latimes.com. Retrieved 2014-02-02. 
  32. ↑ "Dogecoin Jamaican Bobsled Team Olympics". Business Insider. 2014-01-20. Retrieved 2014-02-02. 
  33. ↑ "Jamaican bobsled team raises $30,000 in Dogecoin for trip to Sochi | The Rundown | PBS NewsHour". PBS. Retrieved 2014-02-02. 
  34. ↑ Alex Hern. "It's bobsleigh time: Jamaican team raises $25,000 in Dogecoin | Technology". theguardian.com. Retrieved 2014-02-02. 
  35. ↑ "Crypto-Currency Market Capitalizations | DogeCoin 30-Day Market Cap Graph". Coinmarketcap.com. Retrieved 2014-02-02. 
  36. ↑ Devin Coldewey (2014-01-29). "Dogecoin cryptocurrency donors help send Indian athletes to Sochi". NBC News.com. Retrieved 2014-02-02. 
  37. ↑ http://www.cryptocoincharts.info/#jump-doge-btc
  38. ↑ http://www.cryptocoincharts.info/#jump-doge-ltc
  39. ↑ "Bitcoin and Crypto-currency Exchange Platform". Bter.com. Retrieved 2014-01-25. 
  40. ↑ dcmagnates.com. "AltQuick.co Becomes Man’s 2nd Best Friend: Allows Dogecoin Buying with USD". 
  41. ↑ coindesk.com. "Vault of Satoshi Rolls Out New Altcoin Support". 
  42. ↑ "Vault of Satoshi Adds New Alt-Coins and a CAD Order Book, Coin-to-Coin Trading Imminent". Yahoo Finance. Retrieved 31 January 2014. 
  43. ↑ "Dogecoin and Quarkcoin Hot, Other Altcoins Not, on First Day Vault of Satoshi Trading". Digital Currency Magnates. Retrieved 31 January 2014. 
  44. ↑ "DOGE charts and information". DOGE/BTC and DOGE/CNY. Retrieved 31 January 2014. 
  45. ↑ Nathan Ingraham (16 December 2013). "Bitcoin is so 2013: Dogecoin is the new cryptocurrency on the block". The Verge. Retrieved December 2013. 
  46. ↑ J. Duaine Hahn (16 December 2013). "Move Over Bitcoin: Dogecoin is Here". Complex Tech. Retrieved December 2013. 
  47. ↑ "Donation directory". foundation.dogecoin.com. Dogecoin Foundation. Retrieved 2014-01-25. 
  48. ↑ "Dogechain - The official Dogecoin blockchain!". Blockchain Record for Block 1. Retrieved 30 January 2014. 
  49. ↑ "Wolfram Alpha query for "2014-01-30 11:34:54 plus 21064 minutes". (Block 78936 mined at 2014-01-30 11:34:54)". Wolfram Alpha. 
  50. ↑ "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. 
  51. ↑ "Dogecoin to allow annual inflation of 5 billion coins each year, forever". Ars Technica. Retrieved 4 February 2014. 

External links

SHA-256-based
scrypt-based
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