Bitcoin Alternative 'Dogecoin' Hacked, 21 Million Coins Stolen

Co-founder says the currency originally started as a joke.

December 27, 2013, 1:00 AM

Dec. 27, 2013— -- Take two of 2013's biggest Internet sensations -- bitcoins and the Shiba Inu puppy nicknamed "Doge" -- and smash them together. What you get is Dogecoin, a virtual currency that was hacked during the holidays.

Although 21 million dogecoins were lost in the heist, they only amounted to about $12,000 in value. In comparison, bitcoins are now valued at close to $750 a piece, and a bitcoin hack in November lost 4,100 bitcoins, totaling $1.2 million.

The hack caught Jackson Palmer, a co-founder of the currency, by surprise. "It's interesting that there has been a focus [on dogecoins] in the short two or three weeks we've been up and running," he said. "I think it's crazy that it can happen, but maybe these hackers are trying to get in early."

He and the other co-founder of Dogecoin, Billy Markus, are looking to beef up security in the next month, Palmer added.

Even though the idea of dogecoins started as a joke, Palmer said, it has grown in popularity. "For the majority of their people, it's their first experience with cryptocurrency," he told ABC News. "It's a lot more accessible and the majority of people are having a lot of fun with it."

A single dogecoin might only be worth a fraction of a penny, but Palmer does see it being useful as a currency, though maybe not in the real world.

"People are trading coins for small purchases, like in an online game where you can purchase a different set of armor," he said. "I think that's a really good place [for Dogecoin]."

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