From jokes to assets: Analyzing the evolution and practical use cases of Dogecoin DOGE

Dogecoin is a pioneering meme coin launched in 2013, featuring Shiba Inu as its mascot. Initially regarded as an approachable alternative to mainstream cryptocurrencies like Bitcoin and Ethereum, this joke-origin project has now grown into a top ten market cap crypto asset, with a circulating market value of $23.5 billion and over 168.3 billion coins in circulation.

The technical foundation of DOGE: Why transaction speeds far surpass Bitcoin

Dogecoin is built on an open-source, decentralized blockchain network, utilizing a proof-of-work (PoW) consensus mechanism. Compared to Bitcoin’s 10-minute block processing time, DOGE’s blocks are processed and approved on average within one minute, making its high efficiency a core advantage as a payment tool.

Although PoW provides strong network security due to high computational requirements, it also faces challenges such as high energy consumption and scalability limitations. As the community develops, discussions about shifting to proof-of-stake (PoS) are intensifying—potentially lowering mining barriers, improving energy efficiency, and enhancing decentralization by increasing node counts.

From a supply perspective, DOGE technically has a cap, but since there is no fixed end date, its issuance proceeds in tandem with time. This design somewhat influences perceptions of the token’s long-term value.

A brief history of DOGE’s rise: From Reddit to mainstream visibility

2013-2014: A community-driven internet phenomenon

Programmer Billy Markus and marketing professional Jackson Palmer combined two popular topics—cryptocurrency and the doge meme—to create Dogecoin. The website dogecoin.com attracted over 1 million unique visitors in its first month. The r/Dogecoin community, created in December 2013, sparked enthusiastic responses on Reddit.

In 2014, the Dogecoin community completed two landmark charity fundraisers: one raised about $50,000 to support the Jamaican bobsled team at the Winter Olympics, and the other raised $55,000 worth of DOGE for NASCAR driver Josh Wise’s #98 car. Despite gaining fame, the project lacked ongoing technical development, which hindered its growth. Co-founder Jackson Palmer eventually withdrew in 2015 due to community toxicity issues.

2017-2018: The return of the ICO craze

During the initial token issuance boom, DOGE re-entered the crypto community’s spotlight. This wave also spurred the rise of other dog-themed meme coins, such as Shiba Inu (SHIB), Bonk, and others.

2021-present: Meme coins become mainstream assets

In the first half of 2021, retail traders led by Reddit’s r/WallStreetBets launched a price surge campaign for DOGE, aiming to replicate the GME stock rally. A more influential driver was tech billionaire Elon Musk’s multiple tweets. Musk was voted as “Chief Executive Officer” of the project in a Dogecoin community poll on X, and later changed his profile to “Former CEO of Dogecoin.” In February 2021, he publicly supported DOGE again, even considering Tesla accepting it as a payment method.

Musk’s endorsement triggered a chain reaction—Dallas Mavericks owner Mark Cuban began accepting DOGE for tickets, and DOGE’s Google search volume temporarily surpassed Bitcoin’s. As market attention increased, various dog-themed tokens emerged.

However, meme coins are also highly volatile. After Musk called DOGE a “scam” on Saturday Night Live, its price plummeted over 30%. During subsequent bear markets and crypto winters, DOGE experienced sharp fluctuations similar to most tokens, gradually stabilizing by the end of 2023.

DOGE is more than a meme: Three practical use cases

Despite its humorous origins, Dogecoin has gradually demonstrated real-world utility, aligning with the project’s unofficial slogan “Do Only Good Every Day.” Thanks to low costs and fast transaction speeds, community members use it for charitable donations, tipping, and other positive applications.

Use case one: 2014 Winter Olympics fundraising

Inspired by the legendary story of the Jamaican bobsled team, the Dogecoin community raised $50,000 to help send the modern team to the Sochi Winter Olympics. This initiative showcased the potential of cryptocurrencies to address funding shortages in sports projects.

Use case two: Kenya clean water well project

In 2014, the community partnered with nonprofit organization Charity:Water, raising about $30,000 worth of 4 billion DOGE to build clean drinking water facilities in the Tana River basin of Kenya.

Use case three: India COVID-19 relief in 2021

Dogecoin followers collaborated with Ethereum co-founder Vitalik Buterin to donate substantial funds and DOGE for COVID-19 relief efforts in India, demonstrating community cohesion.

Two major risks facing DOGE

Challenge one: Cognitive blind spots among novice investors

Influencers on social media attract many new traders, but most lack a deep understanding of risks. A Piplsay survey shows that 37% of Americans have traded or considered trading due to Elon Musk’s tweets. New investors often buy DOGE on non-native crypto platforms like Robinhood, hoping for quick profits, without understanding basic fundamentals like market cap.

Although DOGE is promoted as a decentralized asset, actual holdings are highly concentrated. According to the latest on-chain data, the top 10 addresses hold 39.61% of the circulating supply, and the top 20 addresses control 45.22%. Large transfers could significantly impact the price.

Using ETH’s market cap of approximately $396 billion as a reference, reaching the long-anticipated $1 per coin milestone would require a market cap exceeding $130 billion—an unlikely scenario given current development and practical status. Bobby Ong, co-founder of CoinGecko, notes that many speculators buy meme coins expecting quick returns but lack understanding of their utility and valuation fundamentals, making them vulnerable to sudden price swings.

Blockchain investor Eloisa Marchesoni further states that during bear markets, meme coins suffer more severe losses and have limited recovery chances. Compared to Bitcoin, DOGE lacks intrinsic value; these tokens are essentially short-term trend plays.

It’s also worth noting that DOGE’s development stagnated after the release of version 1.14 in June 2019, until a major software update in March 2021, reflecting insufficient maintenance efforts.

Challenge two: Spillover effects of regulatory scrutiny

Meme coins, due to low entry barriers and high risk, often attract inexperienced participants. When such assets reach a market cap of billions with weak fundamentals, regulatory attention is inevitable. Kristi Swartz, managing partner at Swartz, Binnersley & Associates law firm, states that regulators are unlikely to craft specific frameworks for meme coins but will implement comprehensive virtual asset regulations. This means any regulatory measures targeting meme coins could impact the entire crypto space.

Conclusion: Balancing memes and value

Meme coins are the fastest-growing segment in the cryptocurrency field, with DOGE and later WIF emerging successively. However, this phenomenon is a double-edged sword—while meme coins attract new traders, they also expose them to significant risks.

Most media focus on market hype around meme coins but overlook their weak fundamentals. Compared to mainstream assets like ETH, DOGE has limited technological development, infrequent software updates, and lacks fully synchronized nodes. Community skepticism exists regarding the true ambitions of meme coin projects, and their tokenomics are often controversial.

The fundamental reason for the lack of consensus on meme coin intrinsic value is that some believe internet culture and meme monetization drive growth, while others emphasize trading metrics and mining profitability. Although meme coins foster community cohesion, without solid fundamentals and unique use cases, they are unlikely to be long-term investments.

PwC’s global head of cryptocurrency, Henri Arslanian, once said that DOGE’s rapid rise is a double-edged sword for the crypto community—it amplifies stereotypes about cryptocurrencies, and many DOGE investors lack or are completely unfamiliar with crypto. However, he also recognizes the value of the DOGE phenomenon itself: it demonstrates community cohesion and movement’s intrinsic value, and its significance for this generation is comparable to the impact of The Rolling Stones and The Beatles on previous generations.