Dogecoin: A story of memes and Jamaican bobsledding

Virtual currency has gained significant popularity over the past few months. Beginning with Bitcoin, the currency that made the news with its infamous spike and crash in value, other digital currencies have emerged as well. Enter Dogecoin. A combination of the algorithms behind Litecoin and the “Doge” Internet meme, Dogecoin have spiked in popularity since their invention in late December. The price is fluctuating, but as of the writing of this article, approximately 500 DOGE is equivalent to 1 USD. In addition, last week the currency managed to become the most traded digital currency on the Internet. Despite its joking name and origin, there are now communities dedicated to trading this cryptocurrency.
Our story begins with Billy Markus, an engineer from IBM, and Jackson Palmer, an employee in the marketing department for Adobe Australia. Markus was experimenting with a digital currency he named “Bells”, a tribute to Nintendo’s Animal Crossing. Meanwhile, Palmer was observing the large number of other digital currencies that have popped up. In Palmer’s own words: “One night after work, I sat down with a beer, I had too much time on my hands, and I bought Dogecoin.com.” [1] After a humorous tweet about investing in Dogecoin as the “next big thing”, [1] Markus reached out to Palmer and showed how he could make it a reality. Thus Dogecoin was born. The currency is nearly identical to Litecoins, another digital currency made as an attempt to improve on some of the deficiencies of Bitcoin. However, there is one notable difference: Doge. Palmer attached the Doge meme to the currency because “by combining a coin with a meme, it adds a face, (the Doge face), and makes it more accessible. It’s something people can get behind. It’s no longer this shady thing that geeks in basements use.” [1]
Dogecoin may not be the most profitable currency, but they are definitely the most popular. Last week, the number of daily Dogecoin transactions clocked in at over 100,000; almost twice as many as Bitcoin. [2] This equates to about US $13.5 million in transactions every day. It is speculated that this popularity spike is due to both the currency’s stable valuation as well as its ease of use and lack of transaction fees. As the Dogecoin website says, “the point of any currency is to exchange it for goods and services, so making a pile and hiding it in a secret lair is no good to anyone.” [3] Bitcoins are usually hoarded as an attempt to use it as a commodity: buy low and sell high in order to make a profit. Dogecoin, however, have a stable value, and are made for everyday use rather than market trading.
Two days ago, Doge found its way into the news again. For those familiar with the film Cool Runnings, the Jamaican bobsled team is a notable group of individuals who managed to compete at the 1988 Winter Olympics in Alberta. However, after failing to qualify two times in a row, the team has not been present at the games since 2002. This year the team qualified, but could not afford transportation. In response, /r/dogecoin, the subreddit for the Dogecoin community, set out to raise money. In just a few days, they donated approximately $30,000. [4] Combined with two other crowd-funding campaigns that raised $20,000 and $6,000, a total of $56,000 has been raised for the team. [5] Now the Jamaican bobsledding team can participate in the Sochi Winter Olympics, in part thanks to the notorious Doge.
Dogecoin are still young, so it is yet to be seen whether their popularity will continue throughout the year. However, it proves that digital currencies can have an appropriate use in everyday spending. And it also draws away a bit of the “dark” aura attached to digital currencies because of the Silk Road and other illegal activity. Right now there is only one exchange for DOGE to USD, but that is expected to expand in the future alongside the currency’s popularity.
[1] http://motherboard.vice.com/blog/Dogecoin-founders-believe-in-the-power-of-meme-currencies
[2] http://thenextweb.com/insider/2014/01/15/dogecoin-is-the-bitcoin-worlds-most-traded-currency-but-it-wont-become-the-most-valuable/
[3] http://foundation.dogecoin.com/about
[4] http://www.reddit.com/r/dogecoin/comments/1virfc/lets_send_the_jamaican_bobsled_team_to_the_winter/
[5] http://www.theverge.com/2014/1/20/5326932/jamaican-bobsled-olympic-crowdfunding-campaigns-raising-money