||This article may require copy editing for Grammar and spelling. (February 2014)|
|Date of introduction||8 December 2013|
|Inflation||Approximately 100 billion coins to be mined by end of 2014. Thereafter, 5.2 billion new coins per year.|
|Symbol||Ð, Ɖ, D|
Dogecoin (// dohjkoyn, code: DOGE, symbol: Ð and D), is a Litecoin-derived cryptocurrency featuring a Shiba Inu from the "Doge" Internet meme on its logo. It was introduced on December 8, 2013. 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[update], over 50 billion Dogecoins have been mined. 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. 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.
Overview and history
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. 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.
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, from which it derives its randomized reward received for mining a block. In turn, Luckycoin is based on Litecoin, 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 several days later on December 11. The Dogecoin network was originally intended to produce 100 billion Dogecoins.
On December 19, 2013, Dogecoin jumped over 300 percent in value in 72 hours, rising from USD$0.00026 to $0.0095, with a volume of hundreds of Bitcoins per day. 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. 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.
On December 24, 2013, The Reserve Bank of India cautioned users of Dogecoin and other virtual currencies on the risks associated with them. 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. 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. This incident spiked Tweets about Dogecoin making it the most mentioned altcoin on Twitter. 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. By January 2014, the trading volume of Dogecoin surpassed that of Bitcoin and all other crypto-currencies combined.
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, and the Dogecoin to Bitcoin exchange rate rose by 50%. The Dogecoin community also raised funds for a second Sochi athlete Shiva Keshavan. As of 13 February 2014[update], Dogecoin has a market capitalization of USD$81 million.
Use and exchanges
Several online exchanges offer DOGE/BTC  and DOGE/LTC  trading. A single exchange, Bter, offers DOGE/CNY  trading. On January 8, 2014, AltQuick.co was the first exchange to launch DOGE/USD exchange. On January 30, 2014, Canada-based exchange Vault of Satoshi also announced DOGE/USD and DOGE/CAD trading. 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. In the first day of trading, Dogecoin was the second-most traded currency on the platform, after BTC.
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%).
|This section needs additional citations for verification. (January 2014)|
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. 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.
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. Reward is calculated using Mersenne Twister pseudo-random number generator.
|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 ||50,000,000,000||50,000,000,000|
|100,001-200,000||0-500,000 (random)||14 February 2014 ||25,000,000,000||75,000,000,000|
|200,001-300,000||0-250,000 (random)||24 April 2014 (estimated)||12,500,000,000||87,500,000,000|
|300,001-400,000||0-125,000 (random)||2 July 2014 (estimated)||6,250,000,000||93,750,000,000|
|400,001-500,000||0-62,500 (random)||9 September 2014 (estimated)||3,125,000,000||96,875,000,000|
|500,001-600,000||0-31,250 (random)||18 November 2014 (estimated)||1,562,000,000||98,437,500,000|
|600,001+||10,000 (fixed)||26 January 2015 (estimated)||5,256,000,000 per year||No limit|
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, and, on February 2, 2014, Dogecoin founder Jackson Palmer announced that the supply of coins would remain uncapped.
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