Since being launched in December, the whimsical cryptocurrency Dogecoin has proven highly popular, skyrocketing to market cap of $38.6 million in a scant five months.
Based on the “doge” meme that transposes a variety of nonsensical statements over a picture of a quizzical-looking Shiba Inu dog, dogecoin was launched as a sort of less self-serious antithesis to bitcoin. As a functional cryptocurrency, dogecoin resembles bitcoin pretty closely: same decentralized ethos, same ease for transferring money across wide distances free of charge.
What has made dogecoin different is that sense of humor about itself, and its possessor’s free-wheeling attitude towards the currency. Dogecoin holders routinely tip each other “doge” for just about anything, even for something as small as a token of thanks for an enjoyable comment on Reddit.
To be sure, there’s nothing to stop people from tipping BTC or litecoin or whatnot to each other. But it certainly doesn’t seem to be as widespread as it is in doge culture. Tipping tends to be profligate because a dogecoin doesn’t amount to much money at all, with one unit of doge being only worth about $0.000504. But even a small amount of money is worth more than an online favorite or a like, and thus tipping doge has come to change the very nature of giving thanks on social media.
Using tipping to reward each other on social media has added an interesting aspect to how doge is traded. The willingness to spend doge has contributed to the currency having an exceptionally high volume, especially compared to other digital currencies where users tend to buy and hoard, and occasionally panic sell.
For example: according to coinmarketcap.com on May 1 Dogecoin recorded 24 hours tradable volume of $576,692, or 1.3 percent of dogecoin's total market cap. Compare that to bitcoin, where $13.4 million traded hands against a market cap of $5.83 billion, representing just 0.023 percent of the total value of the bitcoin economy.
This facet of dogecoin, and the functionality of dogecoin in general, is explained in the entertaining short video from QuantumDesignsHD entitled “What is Dogecoin?” A monetary reward, no matter how small, is far more “real” to many people. And with dogetips used in tandem with (or in lieu of) standard social media rewards like upvotes or favorites or likes, doge users are putting some actual value behind imaginary internet points, a trend that looks likely to continue blossoming for some time.