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Comment by lvs | Hacker News Reader

A significant portion of the commenters in this thread are asking why Dogecoin has any value at all, as if for the first time grappling with the abstraction of value. Dogecoin has value, like any currency, because a number of people believe it does. Cryptocurrency will have been worth its short-term weight in carbon dioxide and money laundering if, at a minimum, it illuminates the minds of a good number of people to the fundamental arbitrariness of economics and all the philosophical consequences it entails.

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I think you are mischaracterizing many of the comments. The abstract value concept is not new to people. What is confusing however, is what the uses are.

In the case of Bitcoin this is easily explained: Silk Road, "laundering" (for good or bad) and speculation. Since this is the first time many people have heard of this currency a natural question is: who is using this and why?

In the case of this specific currency, it seems like it's mainly used on social networks like Reddit for small transactions (tip), and due to its origins as a cheap joke currency it managed to get early traction. With this explanation in hand, the concrete uses becomes more clear.

Abstract values don't exist in a vacuum. There's always a concrete use of it, even if it's just speculation (Tulips) or gestures of goodwill (~ tip).

Dogecoin's cheap/jokey nature means that what I call the barrier to experimentation is practically non-existent.

Let's say you're interested in cryptocurrencies. The hassle and expense you have to go through to get your hands on some Bitcoin is significant enough to put most people off.

By contrast, to get your hands on some Dogecoin, just post to /r/dogecoinbeg and you've got a pretty good chance of being tipped some.

> In the case of Bitcoin this is easily explained: Silk Road, "laundering" (for good or bad) and speculation.

Or, for people who like Bitcoin: decentralized transaction log, low/no transaction fees, and fraud protection.

Fraud protection ? Are you joking ?

Credit card companies almost unconditionally insure their customers against fraudulent transactions. Bitcoin does not. Banks will actively monitor accounts for suspicious transactions and lock the account if necessary. Bitcoin does not. Banks provide a friendly, easy to use and traceable list of your previous transactions. Bitcoin does not. Banks provide a mechanism to reverse transactions. Bitcoin does not.

Perhaps baddox meant Fraud protection for the vendor - chargebacks are impossible with Bitcoin, so once the vendor has the money/bitcoin, it's theirs.

As a consumer though, I much prefer the fraud protection that the credit card companies provide. And as a vendor, the 1% or less of chargebacks is probably outweighed by the number of customers who do buy because they feel safer using their credit card online.

Fraud protection in the sense that, if you protect your private key no one can steal your bitcoins. With credit cards you are constantly giving away your secret to third parties when you transact with them.

Bitcoin/cash shifts protection from third parties, like stores, to the user. This dramatically changes the nature of security in both good and bad ways.

> Fraud protection in the sense that, if you protect your private key no one can steal your bitcoins.

To swap out a word or two: "Fraud protection in the sense that, if you protect your wallet, no one can steal your cash."

I don't think that matches the commonly understood meaning of "fraud protection".

Right, except it isn't a physical object like cash is, it can't be stolen from your person like cash can, and most people keep nearly all of their 'cash' in electronic accounts anyway.

The snarky parent was probably trying to say that „theft protection” might be a better term.

It's not just theft protection though. Bitcoin provides protection from forms of fraud which specifically use mechanisms in a currency or transaction system, like chargebacks on PayPal (a ubiquitous form of fraud), or fake Western Union payments.

Chargebacks may be a mechanism of fraud by purchasers against sellers, but they are also a tool for addressing fraud by sellers against purchasers.

I agree with your interpretation, but bitcoin eliminates that kind of fraud, while requiring you to protect against theft.

I prefer a user-securable account (like Bitcoin) over a laughably insecure account (like credit cards, where your "authentication" details are just a handful of numbers that you have to share with everyone you transact with) with a dispute resolution team.

Erm all bitcoin transactions are public

ALL

If you know someones address then you can go back and check all the transactions.

As for refunds, merchants selling using bitcoin still have to follow law of the land, in most civilised countries there is a "Supply of Goods and Services Act" or equivalent legislation where a customer is entitled to a repair, replacement or refund if the good/service is bad. Buying with bitcoin is no different to buying in cash

You obviously do not understand bitcoin or are confused about some aspects of it.

If you and I trust each other a great deal, we can do a transaction by exchanging a private key.

Groups of people that trust a third party can also do bitcoin denominated private transactions (the only visible transactions would be with the trusted third party). You see this at most bitcoin exchanges.

I think he meant fraud protection for sellers. "Bitcoins up front." and you are 100% protected from fraud as a seller.

Credit card companies need to spend vast resources on fraud protection because their underlying protocol offers virtually none. Credit cards, after all, don't even have a basic "password." It's like the difference between an online bank account with no password but with a team of "fraud protectors," and a bank account with good two factor authentication. You can argue that both are forms of "fraud protection," but I vastly prefer the latter.

I like Bitcoin. It's odd that I even have to say that to be read correctly.

None of the things you mention are uses, they are features. Great features, sure, but it's not something that you actually do with a currency. It's like saying dollars are used by paper, or for central bank. Bitcoin - right now - is not used much for commerce, aside from black market type stuff.

> "It's odd that I even have to say that to be read correctly."

This is IMO a sign that a discussion has jumped the shark and is no longer worth participating in. Once you get to the "you're either with us or against us" point people have picked their sides and you're arguing against brick walls.

You are absolutely right. In hindsight I shouldn't have replied. The comment thread would've been shorter and more readable then, too ;)

You were talking specifically about possible explanations for people placing subjective value in Bitcoin. The fact that some of these explanations are "uses" and some are "features" isn't relevant.

Fraud protection? LOL. Fraud enablement is more to the point.

Actually, that's precisely the opposite of my point. To have value, an abstraction need not have "uses" in a pragmatic sense. It's easy to list some more common things of ascribed value that have no clear use: hobby collectables, keepsakes, Steam badges and other virtual commodities in video games, Xbox experience points, Ph.D. diplomas, etc. One simply needs to nucleate a community with some irrational desire for an abstraction of value to manifest extant value.

Because doge will make it to the moon. Such value. So wow.

In all seriousness, it's like a post-modern take on cryptocurrency. It's hilarious and thought provoking and stupid and intelligent, all at the same time. And it's so doge.

http://www.reddit.com/r/dogeservice/

And you can actually purchase stuff with it. Cheap translation services, pictures, haikus, you name it.

I purchased 2 nonsensical stories, 1 completely useless and yet awesome doodle and a re-sizing service for a picture.

However the best part in Dogecoin is that it makes certain kind of cryptocurrency evangelists have a twitch in their eye. The amount of "Dogecoin ruins the reputation of serious cryptocurrencies!" posts makes it rather awesome.

The best quote "Dogecoin? Are you kidding me? I'm all for altcoins, but this is just making a mockery of what we're all trying so hard to turn into a respectable enterprise." This quote was actually the one that made me play around with Dogecoin a bit.

I have a hunch that this is part of the reason why dogecoin is somewhat popular. People use dogecoin because they can. And they intentionally ignore any cries on how it's not going to hold value etc. It's not supposed to. It works fine for what it already is. Tipping and nonsensical internet services.

All right, you convinced me to get in on this. This is hilarious.

That's not quite it - people hold these currencies based in part on what they think about other participants, so you end up with a situation resembling the blue eyes puzzle described at https://en.wikipedia.org/wiki/Common_knowledge_(logic).

That's a much more rational position. I mean, you'd have to be an incredible idiot to think that Dogecoin was worth something eo ipso, but slightly less of an idiot to think that there were other people who thought so, and even less of an idiot to think that other people thought that there were idiots who believed that Dogecoin was valuable, and so on.

>Dogecoin has value, like any currency, because a number of people believe it does.

In Doge we trust.

Much value. Wow.

"like any currency, because a number of people believe it does" - even raw military force is enough for some currencies.

When it all comes crashing down is when they'll be illuminated.

By giving it value, they illuminate the absence of value in all of it. Think of it like performance art.

Unlikely, if 2008 proved anything.

illuminati 2014

The only important question is, can you buy drugs with it?

Just use Tide,

http://nymag.com/news/features/tide-detergent-drugs-2013-1/

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