What is dogecoin, the cryptocurrency that became more attractive than bitcoin?

Dogecoin rises 20% on "Doge Day" 0:54

(CNN) -

Dogecoin is the most popular and quirky cryptocurrency on the planet.

The total value of dogecoins in circulation is more than $ 53 billion, which is not bad for a digital currency that started out as a joke.

Dogecoin is the fifth most valuable cryptocurrency on the market, according to CoinMarketCap, having surged more than 6000% this year.

The price of a dogecoin doubled again on Friday after Tesla CEO Elon Musk tweeted about it for the umpteenth time.

Demand for dogecoin skyrocketed so much this week that it briefly broke the Robinhood cryptocurrency trading system.

What is dogecoin?

Like all cryptocurrencies, dogecoin is a digital currency that can be bought and sold as an investment and spent as money.

Although each crypto is unique, dogecoin shares some similarities with its more well-known peers (its code is based on the litecoin script, for example).

But it has a couple of key differences.

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Unlike bitcoin, which has set the number of coins available on the market at 21 million, dogecoin has 129 billion coins in circulation and will continue to make new blocks of coins available to mine each year.

That's part of the reason a dogecoin is currently valued at just under 40 cents on the dollar and a bitcoin is worth about $ 62,000.

Although cryptocurrencies are gaining acceptance as a currency to buy goods, dogecoin does not have much use in the real world.

It has some niche markets, like tipping artists online.

And its main differentiator - its active online community - is what makes this strange coin so fun.

The group, active on Reddit, has raised money (in dogecoin, of course) for charitable causes, and in 2014 successfully funded a sponsorship for Nascar driver Josh Wise to advertise dogecoin in his car.

"Dogecoin is not so much an alternative deflationary numismatic instrument, but an inflationary idle exploration of community building around a cryptoasset," Usman Chohan, an economist at the University of New South Wales School of Business, wrote in an article. updated in February on the digital currency.

• Dogecoin Achieves 20% Profit and Its Enthusiasts Declare 'Doge Day'

How it started?

Dogecoin was created as a joke on December 6, 2013 by a couple of software engineers.

Billy Markus, an IBM programmer from Portland, Oregon, set out to differentiate his cryptocurrency from bitcoin, which was steeped in mystery thanks to its anonymous creator since at that time it attracted a small group of miners.

Markus wanted his crypto to be open to the masses, according to Chohan.

Markus sought help to make his strange dream come true and found Jackson Palmer, who worked for Adobe.

Palmer bought the domain dogecoin.com, a nod to the "doge" meme that was everywhere on the internet at the time.

The website nods to its joke origins at the top - its Shiba Inu mascot is the first image on the page, mimicking the meme it was inspired by, featuring the same dog surrounded by a ton of comic text. Sans in misspelled English.

On dogecoin.com, your mascot has a title: "Dogecoin is an open source peer-to-peer digital currency that is favored by Shiba Inus around the world."

Why is it suddenly so popular?

Dogecoin is no longer a joke.

Its popularity has skyrocketed - astronomically this year - in part due to the widespread adoption of bitcoin and other cryptocurrencies.

But Elon Musk is the most notorious and prominent supporter of dogecoin.

One of his tweets to his 50 million followers can send the cryptocurrency skyrocketing.

That's what happened on Friday, when Musk tweeted "Doge barking at the moon" and shared a photo of a painting by Spanish artist Joan Miró, titled "Dog barking at the moon."

Doge Barking at the Moon pic.twitter.com/QFB81D7zOL

- Elon Musk (@elonmusk) April 15, 2021

Dogecoin has also enjoyed something of a cult status on Reddit, where a popular group - not unlike the WallStreetBets group behind the GameStop rally - decided earlier this year to push its value "to the moon."

Dogecoin soared more than 600% in the wake of that.

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Whether or not it is a smart investment remains a question.

The more actively traded and accepted bitcoin is subject to extreme volatility, so dogecoin could also crash without warning.

But his rise this year has been impressive.

The one who hasn't benefited from the coin's soaring growth is Markus, who sold all of his dogecoin when he was laid off in 2015. He used the money to buy a Honda Civic.

Cryptocurrency