Once joke bitcoin alternative, Dogecoin, is now worth over $2.7 billion

Dogecoin, the once joke bitcoin alternative, is now going wild. Photo / 123RF

Once a joke bitcoin alternative, Dogecoin is now anything but.

At the time of its creation in 2013, a single Dogecoin was worth US$0.015438, according to CoinMarketCap.

Last weekend, however, the cryptocurrency nearly doubled in value and is now worth more than US$2 billion ($2.7b), according to the BBC.

Dogecoin has been gaining steadily throughout December, but its latest spike has prompted howls of "crypto-hype" from sceptics.

Until its recent rise in value, Dogecoin was little known in the world of cryptocurrencies.

Launched in 2013, it was inspired by a short-lived online craze for photos of a particular Japanese dog breed, according to the BBC.

Dogecoins are "mined" in the same way as bitcoins - that is, they are created using computer processing power.

But unlike bitcoin, there is no limit on the number of Dogecoins that can be produced.

Currently there is a staggering 100 billion of these coins already in existence.

Prof Ethan Ilzetzki at the London School of Economics told the BBC: "A digital unit of currency has no intrinsic value unless it can be used in transactions, and I cannot name a single cryptocurrency that is more useful in transactions than a credit card that's denominated in dollars or pounds or yen.

"There's nothing inherently wrong with privately provided digital currencies, but they need to be well designed and well thought out.

"They're worth a lot because people say they're worth a lot. I have very little confidence that they have any long-term value."

Despite its dramatic gain in value, Dogecoin is still well behind the biggest digital currency, bitcoin, which has a total value of more than US$270b ($376.3b).