IBM software engineer Billy Markus created dogecoin from Portland, Oregon, and Adobe software engineer Jackson Palmer, who set out to create a peer-to-peer digital currency that could reach a wider demographic of Bitcoin. Furthermore, they wanted to distance it from the contentious history of other coins. Dogecoin was officially launched on December 6, 2013, and within the first 30 days, there were over a million visitors to Dogecoin.com.
Palmer is credited with bringing the concept to fruition. He was working in the marketing department of Adobe Systems in Sydney at the time. Palmer had bought the domain Dogecoin.com and added a splash screen with the coin's logo and scattered Comic Sans text. After seeing the site, Markus contacted Palmer and began working on developing the currency. Markus based Dogecoin's protocol on existing cryptocurrencies Luckycoin and Litecoin, both of which use scrypt technology in their proof-of-work algorithms. Because of the use of scrypt, miners cannot use SHA-256 bitcoin mining equipment and must instead use dedicated FPGA and ASIC devices, which are known to be more complex to produce.
On December 19, 2013, Dogecoin's value increased nearly 300 percent in 72 hours, rising from US$0.00026 to $0.00095, with a daily volume of billions of Dogecoins. This expansion occurred when bitcoin and other cryptocurrencies were reeling from China's decision to prohibit Chinese banks from investing in the bitcoin economy. Formal paraphrase Three days later, Dogecoin experienced its first major crash, dropping by 80% due to this event and large mining pools taking advantage of the small amount of computing power required to mine Dogecoin at the time.
On December 25, 2013, the first major Dogecoin theft occurred when millions of coins were stolen during a hack on the online cryptocurrency wallet platform Dogewallet. The hacker gained access to the platform's filesystem and modified its send/receive page to send any coins to a static address. This hacking incident increased the number of tweets about Dogecoin, making it the most mentioned altcoin on Twitter at the time, even though it was in response to a negative event. To assist those who lost funds on Dogewallet due to the breach, the Dogecoin community launched an initiative called "Save Dogemas" to help donate coins to those who had them stolen. About one month later, enough money was donated to replace all of the stolen coins.
Dogecoin's trading volume briefly exceeded Bitcoin and all other crypto-currencies combined in January 2014, but its market capitalization remained significantly lower than Bitcoin's. Initially, Dogecoin had a randomized reward for each mining block; however, in March 2014, this behavior was changed to a static block reward. Jackson Palmer revealed in April 2015 that he would be taking an "extended leave of absence" from the cryptocurrency group. During 2017 to early 2018 cryptocurrency bubble, Dogecoin briefly hit a high of $0.017/coin on January 7, 2018, bringing its total market capitalization near USD 2 billion.
In July 2020, the price of Dogecoin skyrocketed due to a TikTok trend aimed at increasing the coin's value to $1. In January 2021, Dogecoin increased by over 800% in 24 hours, reaching a price of $0.07, thanks to Reddit users' attention, which was aided in part by Elon Musk GameStop short squeeze. Following Musk, Snoop Dogg, and Gene Simmons, Dogecoin reached a new high price of $0.08 in February 2021. In March 2021, Dallas Mavericks owner Mark Cuban announced that his NBA team would accept Dogecoin to purchase tickets and products; within two days, Cuban announced that his team had become the top Dogecoin merchant with 20,000 transactions.
Dogecoin and other cryptocurrencies surged in April 2021, aided in Coinbase's direct listing on April 14, although that platform did not support Dogecoin trading. Its price first reached $0.10 on April 14 before reaching a new high of $0.45 on April 16 (up 400% that week), with nearly $70 billion traded in the previous 24 hours. Dogecoin's market capitalization was approaching $50 billion at the time, making it the fifth-most valuable cryptocurrency; its value had increased more than 7,000 percent year to date. Interest in Dogecoin led to an outage in the electronic trading platform Robinhood's cryptocurrency infrastructure on April 15, triggered by "unprecedented demand," prompting experts to warn of a looming speculative bubble in the cryptocurrency sector.
On May 4, 2021, the value of Dogecoin first crossed the symbolic threshold of $0.50, representing a more than 20,000 percent rise in one year. On May 8, 2021, despite, or perhaps because of, expectations of an increase in interest in Dogecoin as a result of Elon Musk's appearance on Saturday Night Live, Dogecoin fell 34% from $.711 at the start of the show to below $.470 45 minutes later. The next morning, Dogecoin had dropped to a swing low of $0.401, a decline of 43.6 percent and a loss of $35 billion.
On May 9, 2021, SpaceX announced a rideshare mission to the Moon entirely funded by Dogecoin, making it the first cryptocurrency-funded space mission. Elon Musk reported the news on Twitter. DOGE-1 will be a minor 40kg rideshare payload on Intuitive Machines' IM-1 mission in Q1 2022. Dogecoin initially had a supply cap of 100 billion coins. By mid-2015, the 100 billionth Dogecoin had been mined, with an additional 5 billion coins being added to the system each year after that. While there is no theoretical supply cap, the number of Dogecoins in circulation will only double in 20 years at this pace (the next doubling will occur in 60 years, in the year 2075). There is no hard limit on the total availability of Dogecoins. Initially, Dogecoin had a supply cap of 100 billion coins, which was much more than the top digital currencies allowed at the time. Nonetheless, Dogecoin founder Jackson Palmer announced in February 2014 that the limit would be removed to achieve a consistent reduction in the inflation rate over time. In other words, from 5% in 2015 to less than 4% in 2019, 3% in 2027, and 2% in 2035, the inflation rate gradually decreases.
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