Tesla Chief Executive Elon Musk won’t stop tweeting about Dogecoin. Rapper Snoop Dogg put online a mock album image captioned “Snoop Doge.” And Gene Simmons, co-founder of the rock band Kiss, calls himself the “God of Dogecoin.”
So, what is dogecoin, and why are people so excited about it? We’ve got answers to your questions about the cryptocurrency that has the internet abuzz.
First things first: How do you pronounce “dogecoin”?
According to the cryptocurrency’s co-founder Billy Markus, the correct pronunciation is “dohj coin.” Some prefer to pronounce the first syllable like “dog” or “doggy.”
What is dogecoin?
Dogecoin is a cryptocurrency that literally started as a joke in 2013. It is a satirical homage to bitcoin, designed to serve no real purpose other than generating a few laughs.
It is named after an internet meme centered around the image of a Shiba Inu dog with bad spelling habits—thus “doge” instead of “dog.”
Why has dogecoin’s popularity exploded?
On Jan 28, Mr. Musk, Tesla’s billionaire boss, tweeted a faux “Dogue” magazine cover. It isn’t clear why, or what caught his attention.
He has since continued to tweet about the cryptocurrency. Once, it was a meme based on the movie “The Lion King,” imposing the Shiba Inu dog on Simba’s face. Another time, he wrote “Who let the Doge out,” and “No highs, no lows, only Doge.” Perhaps in an effort to be helpful, he also tweeted what he described as an instructional video titled “D is for Dogecoin.”
His cryptic comments have prompted the cryptocurrency’s popularity to skyrocket, with rappers Snoop Dogg and Soulja Boy, as well as Mr. Simmons, sharing memes and tweets with their followers.
The cryptocurrency’s price, which had been at about half a cent at the start of the year, shot up to more than 7 cents apiece following Mr. Musk’s tweets.
That means it has climbed almost 1,500% this year, and has a market value of roughly $10 billion, making it more valuable than Western Union, Under Armour and Xerox.
Fans of dogecoin online are rooting for it to reach $1.
How can I buy dogecoin?
Dogecoin can be bought with a credit card on cryptocurrency exchanges such as Bittrex Global GmbH and Payward Inc.’s Kraken, as well as trading platforms including the popular brokerage Robinhood Markets Inc.
On Monday, deVere Group said it added dogecoin to its crypto-trading app because demand has surged due to what CEO Nigel Green called “The Elon Effect.”
Can I buy anything with dogecoin?
Most traditional online retailers don’t accept any cryptocurrency as a form of payment.
The folks behind website Shibe Mint sell copper tokens—stamped with a “D” and the year 2014—for $12 apiece. You can pay for these tokens with dogecoin, but they are currently sold out.
You can also get your doge swag, such as a “doge dealer” T-shirt from dogeswag.com.
And the website Bitrefill will let you buy gift cards for various retail platforms, such as Amazon.com Inc. and Apple Inc.’s app store, using dogecoin.
Exchanges that trade dogecoin will also let you convert your cryptocurrency into traditional currencies.
Who invented dogecoin?
Developers Jackson Palmer and Billy Markus co-created dogecoin in 2013.
They set it up as a joke. Even the way people originally obtained the coin was meant to be ridiculous: In return for solving mathematical puzzles, dogecoin miners operating fast-running computers received anywhere from one dogecoin to hundreds of thousands of dogecoins.
Neither works on the project anymore, and Mr. Markus has said he sold all of his dogecoin in 2015. He made just enough from it to buy a used Honda Civic.
“The idea of dogecoin being worth 8 cents is the same as GameStop being worth $325,” Mr. Markus, 38 years old, said recently. “It doesn’t make sense. It’s super absurd. The coin design was absurd.”
(GameStop shares traded Monday at roughly $60, after hitting an intraday high last month of $483.)
What are the risks of investing in dogecoin?
Cryptocurrencies are volatile, and prone to large swings in either direction.
Bitcoin, for instance, jumped 13% to $43,143 on Monday after Mr. Musk’s electric-vehicle company Tesla said it invested $1.5 billion in the digital currency. Tesla said it plans to start accepting bitcoin as payment for its products soon. The price had already quadrupled in 2020.
Dogecoin could as easily lose 90% of its value, cautions Garrick Hileman, head of research at blockchain.com, a cryptocurrency transactions company. “I do worry about all the attention paid to a cryptocurrency that historically has not seen real-world traction and is a bit of a joke—literally.”
Why is dogecoin so popular?
Some argue that it is yet another sign of the market madness that has seen surges in stocks touted on online forums.
Despite nearly a decade passing since its creation, dogecoin has remained beloved by a small community that has Photoshopped the dog’s furry face onto everything from astronauts to Twinkies.
That community is now growing, and growing rapidly.