Dogecoin: The Founders – Part 2
On the origins of a joke
Dogecoin wasn’t meant to be a big hit. It was just a joke, started by a November 2013 tweet from an engineer in Adobe’s Sydney, Australia office, Jackson Palmer: “Investing in Dogecoin, pretty sure it’s the next big thing.”
The tweet was accompanied by a link to dogecoin.com. On it was a logo and text that read: “Dogecoin is an open source peer-to-peer parody cryptocurrency.”
The tweet caught the attention of software engineer Billy Markus. Markus connected with Palmer, and together, they turned this joke into a reality.
On December 6th, they created Dogecoin.
But it wasn’t a useful financial instrument. In Palmer’s words, Dogecoin “started as a parody of the multitude of alternative cryptocurrencies, or ‘altcoins,’ flooding the market at the time.” Dogecoin was a practical joke.
Consider the memecoin’s design. Markus explained: “I threw it together in four hours with some parameters I thought were generally ridiculous — 100 billion coins in one and a half years, for example — and a UI splattered in Comic Sans. I thought it’d be a funny inside joke to the altcoin community.”
Dogecoin ran on a system that allowed everyday gaming computers to mine (create) the coin. Palmer said that “anybody with a gaming rig could point their computer at it and mine some.” This accessibility was relatively unique: To fruitfully mine Bitcoin, for example, you needed more intense, specialized equipment.
Markus and Palmer didn’t want large money-hungry individuals or groups getting in on Dogecoin mining. So, in March 2014, they updated Dogecoin’s algorithm to make it hard for a “multiplayer operation” to mine a lot of Dogecoin, keeping the system small. In essence, it was the everyman’s coin, favoring the one-off at-home miner.
When first launched, Dogecoin had a limit of 100 billion coins — which was 100,000 times larger than Bitcoin’s 21 million maximum coin supply. Markus said: “I think the hundred billion [market cap] naturally discourages [get rich quick schemes]. I’m getting emails from people saying that the market cap should be set lower so that the value goes up, and I say that’s not the point. It’s actually working as a currency if the value stays low.”
Palmer noted how they didn’t “really want there to be a DOGE to USD transaction exchange; as a digital currency, I think it’s important for it to remain in its own kind of Internet bubble.”
This belief was so central to how Palmer and Markus envisioned Dogecoin that, in mid-2015, when the system reached this 100 billion limit, they updated the structure to support an unlimited supply of Dogecoins. The founders didn’t want Dogecoin to become a store of value. Dogecoin was supposed to function small, have a relatively low value per coin, and be “friendly,” according to Markus.
And there’s one group of early adopters that embraced this small-scale, friendly mentality: The tippers. More on them in the next post.
Sources
Asarch, Steven. “Dogecoin: Cocreator Explains How Parody Currency Found Value,” April 15, 2021. https://www.businessinsider.com/dogecoin-go-back-down-right-now-price-livee-billy-markus-2021-4.
Chohan, Usman W. “A History of Dogecoin.” Discussion Series: Notes on the 21st Century, 2021.
Cointelegraph Staff. “What Makes Dogecoin Valuable?” Cointelegraph. Accessed December 9, 2023. https://cointelegraph.com/learn/what-makes-dogecoin-valuable.
Copeland, Tim. “A Brief History of Dogecoin.” The Block, September 23, 2023. https://www.theblock.co/learn/245715/a-brief-history-of-dogecoin.
Cryptopedia Staff. “Dogecoin (DOGE): A Fun and Friendly Cryptocurrency.” Gemini, November 1, 2023. https://www.gemini.com/cryptopedia/dogecoin-history.
“Dogecoin Website,” December 7, 2013. https://web.archive.org/web/20131207010921/http://dogecoin.com/.
Gilbert, David. “Dogecoin Creators Talk Surprising Success, Scams, the Future and Pronunciation.” International Business Times UK, February 7, 2014. https://www.ibtimes.co.uk/dogecoin-creators-talk-surprising-success-scams-future-pronunciation-1435604.
Noyes, Jenny. “An Interview With The Creator Of Dogecoin: The Internet’s Favourite New Currency.” Junkee, January 22, 2014. https://junkee.com/an-interview-with-the-inventor-of-dogecoin-the-internets-favourite-new-currency/27411.
Palmer, Jackson. “My Joke Cryptocurrency Hit $2 Billion and Something Is Very Wrong.” Vice (blog), January 11, 2018. https://www.vice.com/en/article/9kng57/dogecoin-my-joke-cryptocurrency-hit-2-billion-jackson-palmer-opinion.