Dogecoin is ridiculous, and that’s the whole point. The cryptocurrency that started out as a joke is now a meme come to very lucrative life, with nearly $50 billion worth of dogecoins in circulation today. In fact, the quirky cryptocurrency is red hot, and its value has skyrocketed more than 6,000% this year, making it the fifth most valuable cryptocurrency in the world.
The joke started on December 6, 2013, when a pair of software engineers decided to lampoon bitcoin, which keeps itself and its creator shrouded in mystery and takes itself and the enigma extremely seriously. In contrast, dogecoin was intended to be open and accessible for the masses. To celebrate this lowbrow everyman sentiment, the creators named their cryptocurrency after the doge meme that was ruling the internet back in those halcyon days of yore.
And now, what began as a meme-branded internet jokes has become a bona fide crypto asset, all thanks to an active and enthusiastic internet fan base centered around an oddball Reddit community that has championed the cryptocurrency and carried out dogecoin fundraisers for a huge and hilariously diverse number of causes from charitable giving to crowdfunding a dogecoin sponsorship for Nascar driver Josh Wise.
"Dogecoin is not so much an alternative deflationary numismatic instrument as it is an inflationary leisured exploration of community-building around a crypto asset," economist Usman Chohan wrote in an academic paper about dogecoin. In other words, much playful, very community.
But now the popularity of dogecoin has spread beyond the message boards of Reddit and into the wider crypto community--and it is red hot. Part of the cryptocurrency’s newfound popularity is just thanks to a generalized enthusiasm for crypto assets as currencies like bitcoin have become increasingly adopted by the mainstream. Part of it is just more internet ridiculousness. Cue Elon Musk’s twitter profile. Related: Iran Says It Welcomes Talks With Saudi Arabia
Musk is easily the most influential advocate of dogecoin, and he has been extremely and erratically vocal about it on twitter. “One of his bizarre tweets to his 50 million followers can send the crypto surging,” reports CNN Business. And that’s exactly what happened just this Friday, when Musk sent the currency’s value surging and tweeted an extremely poignant economic analysis of the social and financial benefits of dogecoin. Just kidding. The tweet that sent dogecoin through the roof read "Doge Barking at the moon" accompanied by an image of Joan Miró’s painting titled "Dog Barking at the Moon." In a true celebration of the ridiculousness of doge and the internet, the single absurdist tweet literally doubled the value of dogecoin and even briefly brought down Robinhood's cryptocurrency trading system thanks to a huge spike in demand for dogecoin.
But while dogecoin is easy to dismiss as frivolous, silly, and fleeting, it’s become increasingly clear that the cryptoasset is very, very real. Dogecoin, in addition to proving itself on the market, has also become an increasingly impactful contributor to cryptocurrencies’ major carbon footprint. Mining cryptocurrencies, which involves huge amounts of computing power to solve complex puzzles to establish “proof-of-work” requires a truly staggering amount of energy. But while dogecoin is no exception, it’s actually one of the most energy-efficient cryptocurrencies thanks to the algorithm that it uses for mining.
While bitcoin mining requires the ultra-complex SHA-256 algorithm, dogecoin is mined using Scrypt, which is several times more energy efficient, not to mention a lot quicker. The drawback is that it’s not as safe as the ultra-secure SHA-256. But the benefits of dogecoin’s lower greenhouse gas impact and quicker mining process shouldn’t be understated, as cryptocurrencies are increasingly adoped and their environmental impact becomes more important and more widely scrutinized. Not to mention the fact that dogecoin’s efficiency and accessibility for amateur miners and environmentally conscious crypto-enthusiasts falls in line with dogecoin’s ethos of being a cryptoasset by and for the people. Long live the doge.
By Haley Zaremba for Oilprice.com
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