Dogecoin and the Appeal of Small Numbers
diegobasch.com
diegobasch.com
A 100 billion market cap is just ~8 times that of Bitcoins. If Doge succeeds at its goal of being the tipping currency for the internet it will reach at least one dollar.
Update:
To expound on my point, I think Dogecoin solves the single biggest crisis the Internet has created, and that is "How do we compensate people who create digital works that are infinitely reproducible?"
This is Jaron Lanier's beat. Has the internet delivered in broadening the middle class? No, it has threatened the middle class.
When people work for Likes, or reputation, instead of cash, they become impoverished.
Dogecoin can solve this problem by being a viable micropayment system. It can bring a currency layer to the internet, undergirding everything. As coders, Doge allows us to work with currency as easily as we work with an API.
The economic security of creators depends on being able to extract revenue in amounts greater than what advertising provides but less than what credit cards are capable of. All of the micropayment companies so far have failed. The prize is huge.
I bought into Dogecoin because I was vexed by the problems Lanier pointed out to me and I saw it as a micropayments solution that has gained explosive traction in just six weeks.
This is coming from someone whose HN comment history has been very down on cryptocurrency. I now have the fanatic zeal of a convert.
The market cap is their value measured against the US dollar. Bitcoin is at 10 billion at the moment http://coinmarketcap.com/ If dogecoin rose to 100 billion ~10 the size of bitcoin each coin would be worth a dollar.
Wait... now that I read the above comment again, I think you may be right... they are saying that it would only take the total value (market cap) of dogecoin to be 8 times the current market cap of bitcoins for the dogecoin to be worth at least $1 a coin.
So nevermind, you are right and I was wrong. In my defense, the original comment was a little unclear about what they meant.
I don't see it happening, and I don't even see the Dogecoin market cap even reaching the Bitcoin market cap, at least not unless Bitcoin itself becomes a major currency, and Dogecoin becomes the official joke currency.
This is exactly my story as well.
The currency of karma. The tipping currency of the internet. The post-work currency?
The people who created this were not idiots, they learned by looking at previous coins.
1. more coins for larger transactions instead of fractions
2. faster block rate (one a minute)
3. faster difficulty adjustment time (4 hours vs days or weeks)
4. faster halving time (every other month or so)
5. faster time to last block (mid 2015)
6. faster confirmations
It doesn't have to hit a dollar to be successful, even if it hits a penny USD, it will generate a ton of activity and "wealth".
The only big problem they have is their blockchain is going to be insanely huge in a year, like staggeringly unmanageable.
http://4x.reddit.com/r/dogecoin/comments/1ufl1e/much_concern...
Either with that or around that time they also had to do a patch to raise the transaction limit.
Both issues were hard to anticipate and I guess if you have to cause a fork, at least it happens while the chain was "young".
To outsiders this stuff may seem mysterious and hard, but to people with real experience in this field it's easy to see that the Dogecoin team don't have a clue.
What I am realizing is that dogecoin, by virtue of being not so serious, is gaining more developer mindshare who want to experiment and learn. That's what makes it fun, and what gives it potential.
But Litecoin has the very competent Warren Togami as lead dev right now; if dogecoin had competent devs maintaining the client they'd get some respect. But they don't.
http://www.coindesk.com/litecoin-founder-charles-lee-on-the-...
I think you're missing the point of dogecoin. It doesn't matter. That's the point.
It's a pity that Dogecoin uses such an out of date codebase - having it more up-to-date would give a nice target with real economic value and importantly transaction volume for testing out exploits. (for crypto-coins "exploits" can mean economic design issues which can't necessarily be fixed with code changes) The very short block interval makes attacks like selfish mining easier to try out for instance. Similarly because they kept the 1MB blocksize limit, but with a 10x shorter 1m interval, it gives insight into what Bitcoin would look like if the blocksize limit was raised.
Keep in mind that most people in the crypto-coin dev/theory community don't actually own that many coins, and in any case are insiders that can easily move their coins to whatever crypto-currency is most likely to grow. The smart people aren't wedded to any particular currency, but rather the growth of crypto-currencies in general. Understanding how they fail is essential to making crypto-currencies succeed in the long run.
There were test cases, peer review and discussion about the potential problems. None of those occurred with dogecoin, who had a rabid developer changing values without understanding what they did.
As far as I'm concerned, Dogecoin having more Transactions / day makes it far far more successful than BTC. BTC, despite being a better store of value, is literally affecting fewer people, because everyone is so obsessed with hoarding the dang thing.
Dogecoin takes the whole approach and makes a joke of it... and that is why it will be a perfectly fine transaction medium.
Examples, please.
Anyway, I like it. Having to choose one business over another, ceteris paribus, I'd always go for the one with the sense of humour.
The libertarian, crypto-anarchist ideology is inherent to all cryptocurrency, not inherent to Bitcoin.
People call it a joke or parody purely based on its name, and don't have the mental fortitude to think beyond the DOGE aesthetic which was intended as a spark to get the engine going.
DOGE could become the de-facto internet tipping protocol if they go that route.
Hell, they could even change the name and shut everyone up too... and then I wonder if people would still call it a joke currency or parody? Hmmm..
we are much more likely to trust a group that doesn't try to pretend it is "serious" because we see those people as untrustworthy.
In fact one self identifying bitcoin speculator contributed $20k of that after moving some bc>doge all to drive speculative in doge through the assured free press (and wrote about his intent on reddit).
I wonder how common this is, or will become.
The minimum transaction amount that does not incur fees is currently .01 BTC, so I think there is an actual issue for micro-transactions as things stand now.
However, the smallest indivisible unit of a bitcoin is 1 satoshi (1e-8 BTC), and if the bitcoin fanatics are to be believed and 1 BTC will be worth anywhere from $40,000 to $1,000,000 in the future, it makes sense to deal in the smallest possible denomination that can show up on the blockchain. A 200K satoshi tip sounds a lot better than a .002 BTC tip, or even 2mBTC (hope I got those decimal places right!)
I completely agree though, feels so much better to have 10,000 DOGE than 0.01 BTC. And makes for a much better tipping experience
You know what? I have had more fun with that then any of the bitcoin I have. I have been playing with day trading, tipping people online and buying things from people.
I know nothing about trading at all. Well nothing beyond random reading. Hence the appeal of trying it out with inconsequential sums of money like dogecoin. After all 20000 Dodge is cheap but enough to have fun with on the exchange. I got to experience the rush of a pump with unsustainable grow followed by a crash. All the while trying to increase my holding. I also had a ball doing so. The fun value I got out of Dodge easily exceeds anything I got in the bitcoin world.
Dogecoin is doing the second.
The Lotto is "absurd" but I still play it when it reaches those ridiculously high levels. Spending[1] $400 on CandyCrush is "absurd". The $999 iOS app "I'm rich" was "absurd". The idea such a thing as bitcoin, from an anonymous dev, somehow reaching $1,000 each is "absurd" .....but here we are. :)
As much as I thought Dogecoin was ridiculous, I now know that I better go get some... just in case.
1. http://www.insanee.com/update/wtf-2/400-bucks-on-candy-crush...
That's not absurd at all. Might be absurd to you if you are absurd though or not good at Math, like lots of other humans apparently are.
Litecoin wasn't a great idea, just a copycoin. It wasn't even innovative on the scrypt part, they just copied Tenebrix and changed the branding. So it's the same crap as Dogecoin.
Namecoin is a great idea, and we definitely need to decentralize the web, but I don't see it taking off soon.
Whether a copycoin's price goes up a lot or not does not tell us anything about whether it was a great idea or not. You seem confused on that part.
edit: While we are at it, does anyone know how many dogecoins can you expect to mine per kilowatt-hour?
Doge currently is the 2nd most profitable to mine:
Some miners aren't in it for the immediate profitability though; While you may be able to mine .025 BTC worth of AltCoin A per day pretty regularly, I may choose to mine the much less profitable AltCoin B that only nets me .01 BTC each day because I believe holding it will make it much more valuable N months from now.
Whatever benefit you think bitcoin has or will have - WHATEVER benefit - someone will make another currency that does it better and cooler, and then no one will have any reason to have bitcoins, and then your life savings evaporate.
Social networks, teen pop music bands, internet currencies - all follow a nice, predictable rise and fall arc. We can't exactly predict how high the rise will be, or exactly when the fall will come, but we know it's coming.
Instead of talking about $DOGE 700 = $BTC 0.001, why not say $DOGE 700 = m$BTC 1?
This solution would work even if the currency drifted further from the value of the dollar, just start using u$BTC, n$BTC, or k$DOGE etc.
[EDIT: Apparently some people on HN have not seen 'Cool Runnings'.]
Generally.
I think you need to do a little more than just plug cultural references, though.
Gold is more valuable, but in terms of actually changing hands (I am not talking about trading paper gold) the daily volume is low. Meanwhile lots of people use coins every day.