The Fascinating Origin Story of Dogecoin: From Joke to Legitimate Cryptocurrency

In the world of cryptocurrency, few coins have captured the public imagination quite like Dogecoin. What started as an Internet meme based on the viral “doge” Shiba Inu dog has evolved into one of the most widely-known digital currencies. So how did this joke transform into a billion dollar market cap cryptocurrency with a passionate community? Let’s explore the strange and captivating history of Dogecoin.

The Birth of Doge

The roots of Dogecoin trace back to the original “doge” internet meme. In 2010, a kindergarten teacher in Japan posted photos of her rescue Shiba Inu dog Kabosu online. The photos of the cute dog standing with a confused look on her face quickly went viral. Something about Kabosu’s expression inspired the Internet to overlay the photos with multicolored comic sans text reflecting the dog’s imagined internal monologue.

These “doge” memes exploded in popularity on websites like Tumblr and Reddit. By 2013, the meme had permeated Internet culture so deeply that Doge was voted “top meme” of the year on KnowYourMeme.com.

Turning a Joke into a Cryptocurrency

In November 2013, Adobe software engineer Jackson Palmer tweeted out an offhand joke: “Investing in Dogecoin, pretty sure it’s the next big thing.” At the time, new cryptocurrencies were popping up all the time. Inspired by Palmer’s tweet, Billy Markus, a programmer from Portland, decided to actually make Dogecoin a reality.

Markus based Dogecoin’s code on the existing cryptocurrency Luckycoin. But unlike other coins, Markus specifically tailored Dogecoin to be more accessible to the casual Internet user. He made mining Dogecoin much easier for ordinary computers, and set the initial supply of coins to be much higher than competitors like Bitcoin.

Most famously, Markus customized Dogecoin with the Japanese doge meme as its mascot. Images of the doge Shiba Inu were embedded throughout the coin’s brand and code. When users participated in Dogecoin transactions or mining, they were greeted with a randomized comic sans style doge message like “So transfer. Many currency. Wow.”

Dogecoin Takes Off

Markus released Dogecoin on December 6, 2013. At first, many dismissed the cryptocurrency as a silly parody coin. Critics argued its inflating supply made it inherently worthless compared to deflationary coins like Bitcoin. But supporters were drawn to the lighthearted absurdity of the doge meme underpinning the coin. Dogecoin’s community began using their coins to “tip” each other small amounts of cryptocurrency to express gratitude across social media.

This type of microtipping wasn’t feasible with high value coins like Bitcoin, but worked perfectly with inexpensive Dogecoin transactions. As the giving and receiving of Dogecoins became a social media phenomenon, the coin’s value started rising quickly. By the end of the first month, Dogecoin’s market cap exceeded $8 million.

Just two weeks after launch, Dogecoin experienced its first speculative boom. Markus was stunned: “I had no idea Dogecoin would blow up like it did. I don’t think anyone did.”

Going to the Moon

In 2014, the Dogecoin community sponsored the Jamaican Bobsled Team’s trip to the Sochi Winter Olympics. This act of generosity garnered global media attention, exposing millions to Dogecoin. As excitement grew, the long-running Internet joke of Doge “going to the moon” became a rallying cry among fans who wanted to dramatically grow the coin’s value.

In May 2014, the Dogecoin community successfully fundraised $50k+ worth of Dogecoins in an effort to sponsor NASCAR driver Josh Wise. Dogecoin logos appeared on Wise’s car during a high-profile, televised race at Talladega Superspeedway. Once again, the feel-good effort attracted mainstream curiosity in the meme cryptocurrency.

That year, Dogecoin became the internet’s preferred method for fundraising, powering viral charity campaigns raising money for homeless youth, clean water in Kenya, and other causes. 2014 also saw the birth of DogePal, an e-commerce platform where users could spend Dogecoins on products and services online.

Surviving Cryptocurrency Winters

Like many altcoins, Dogecoin’s value decreased substantially following the bursting of the 2017 bubble. Critics once again argued the inflationary cryptocurrency had no inherent value and predicted its demise.

But the Dogecoin community persisted, continuing to embrace and spread the absurdity of the doge meme that birthed it. Dogecoin survived through the subsequent crypto winters while countless other altcoins went extinct.

In 2021, a new wave of retail investors motivated by internet meme stock communities like r/WallStreetBets reignited interest in Dogecoin. The coin’s price spiked wildly as it once again became associated with get-rich-quick internet schemes.

Despite the naysayers, Dogecoin has shown impressive longevity for an altcoin despite lacking active developer support. What began as a silly meme currency has become one of the top ten cryptocurrencies by market capitalization. While Dogecoin is not taken seriously by some experts, it continues to evolve thanks to the passion of its fan community. As Dogecoin celebrates its 10th birthday in 2023, it remains one of crypto’s most captivating underdog success stories.

Is Dogecoin’s Inflationary Supply Sustainable Long-Term?

Unlike Bitcoin and many other cryptocurrencies, Dogecoin has no hard cap on the total supply of coins. Approximately 5 billion new Dogecoins enter circulation every year through block mining rewards. This built-in inflation raises questions over Dogecoin's long-term viability as an investment asset. However, the currency's inflation rate actually steadily decreases over time. Is Dogecoin’s inflationary supply structure sustainable, or will it limit the coin’s upside potential relative to deflationary alternatives like Bitcoin?

There are reasonable arguments on both sides. Critics argue Dogecoin’s unlimited supply makes the currency inherently worthless. With mining rewards constantly adding billions of new Dogecoins, existing coins will face continual inflationary pressure. This could suppress prices and discourage holders from treating Dogecoin as a long-term store of value like Bitcoin.

However, Dogecoin supporters counter that the currency’s gradually decreasing inflation rate makes the unlimited supply acceptable. At launch, 100 billion Dogecoins entered circulation. New reward blocks now add around 5 billion coins per year, representing only 5% inflation. As more total coins enter circulation, this relative inflation rate will continue declining while remaining positive. Therefore, Dogecoin will face far less inflation risk over time as the currency matures.

Ultimately, Dogecoin's longevity likely depends on real transaction utility outweighing mining reward dilution. If the Dogecoin community continues finding creative uses for Doge transactions while expanding merchant adoption, the system may sustain itself indefinitely regardless of unlimited supply.

Will Dogecoin Ever Become a Mainstream Payment Network?

Dogecoin has built a passionate community around using DOGE as a tipping and crowdfunding mechanism on social media. But some critics argue the cryptocurrency lacks the utility and incentivization structure to ever become a truly mainstream payment network like Visa or Mastercard. Does Dogecoin have a chance of moving beyond its niche uses to reach widespread retail and commercial adoption?

Expanding merchant acceptance of DOGE will be key. Crypto payment processors like BitPay and CoinPayments already allow some merchants to accept DOGE. Hardware wallet maker Ledger and the Dallas Mavericks NBA team take Dogecoin payments through such gateways. However, overall retail acceptance remains limited compared to older cryptocurrencies like Bitcoin.

Mainstream adoption may hinge on convenience. DOGE transaction fees are relatively low, avoiding a key pain point of high network costs for Bitcoin payments. The Elon Musk-endorsed proposal to rebuild Dogecoin using efficient proof-of-stake consensus could further optimize DOGE for microtransactions.

However, developers must prioritize usability. Easy-to-use, secure Dogecoin mobile wallets are essential for casual users. Seamless integration of DOGE payments into existing POS systems and e-commerce platforms would also drive adoption. Partnerships with major payment processors and banks could accelerate things.

If the DOGE community can fundraise to incentivize development and promote adoption, Dogecoin may stand a chance at becoming more than a meme. But critics remain skeptical given its origins. Only time will tell if Shiba Inu-branded cryptocurrency can move beyond niche status to truly rival Visa and Mastercard.