"Dogecoin was created by programmer and former IBM engineer Billy Markus of Portland, Oregon, who was originally trying to tinker with an existing cryptocurrency of Markus's called "Bells" based on Nintendo's Animal Crossing, in hopes of reaching a broader demographic than the investors who made up Bitcoin's economy and something that wouldn't be involved with the controversial history behind Bitcoin (namely its association with the Silk Road). At the same time, his friend Jackson Palmer, a worker for a marketing department in Sydney, Australia for Adobe Systems, and the original individual who first conceived of the idea for Dogecoin, was encouraged by a student at Front Range Community College on Twitter to make the idea reality, leading Palmer to reach out to Markus. After getting several mentions on Twitter, Palmer bought the domain dogecoin.com, which was shown to Markus and quickly began the partnership between Markus and Palmer, launching the coin shortly after the development of Markus' Dogecoin wallet was done. Within a couple weeks of launching the currency, a significant portion of available DOGE had already been mined. Over 6% of the total amount of 100 billion DOGE was already mined by December 17, 2013, and on December 19, Dogecoin had jumped more than 300 percent in value, rising from $0.00026 to $0.00099,with a volume of hundreds of Bitcoins per day during a time when Bitcoin and many other cryptocurrencies were reeling from China's decision to forbid Chinese banks from investing Chinese Yuan into the Bitcoin economy. On the 22nd of December, Dogecoin experienced its first major crash by dropping by 80% due to large mining pools seizing opportunity in exploiting the very little computing power required at the time to mine the coin. On December 24, 2013 The Reserve Bank of India cautioned users of Dogecoin and other virtual currencies on the risks associated with them. On the day of Christmas in 2013, the first major theft attempt of Dogecoin happened when millions of coins were stolen during a hacking attempt on the online wallet platform Dogewallet, due to having the hacker gaining access to the platform's filesystem and modifying its send/receive page to send any and all coins to a static address. By January 2014, the trading volume of Dogecoin surpassed that of Bitcoin and all other cryptocurrencies combined.

Markus based Dogecoin on the existing currency Litecoin, which also uses scrypt technology in its proof-of-work algorithm, meaning that miners cannot take advantage of specialized Bitcoin-mining equipment to mine at higher speeds. The Dogecoin network was originally intended to produce 100 billion Dogecoins, but a bug in the code made the production of dogecoins never ending. Despite Dogecoin's original purpose as a proof-of-concept and a play on the internet meme of the same name, there are communities dedicated to it and several minor exchanges that trade it for other established cryptocurrencies like Litecoin or Bitcoin. The currency's popularity and value are rapidly growing; the baseline price on January 7, 2014 was approximately 4600 DOGE to 1 United States dollar. As of January 20, Dogecoin is trading on cryptocurrency exchanges at an average high of approximately 0.00000260 BTC per DOGE, or about 500 DOGE to 1 USD.

On January 19, a fundraiser was established by the Dogecoin community to raise $30,000 for the Jamaican Bobsled Team, which had qualified for, but could not afford to go to, the Sochi Winter Olympics; $30,000 was donated by the second day, and the Dogecoin to Bitcoin exchange rate rose by 50%."