
The rise of Dogecoin, the internet's hottest cryptocurrency - yitchelle
http://www.theage.com.au/technology/technology-news/the-rise-and-rise-of-dogecoin-the-internets-hottest-cryptocurrency-20140124-31d24.html
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untog
The rise of dogecoin interests me because I think it demonstrates a problem
with cryptocurrencies - mining becomes too prohibitive for the end user to do
before the currency becomes mainstream.

Early on, the opportunity of bitcoin was huge. You mine a little, the value of
your coins just keeps on rising. Now you can't mine any meaningful level of
currency yourself, so the entry level has raised dramatically.

So why not move onto a different currency? Get in early. Get a stack of
currency. Then that'll become too difficult to mine and newcomers will move
onto the next. And the next.

~~~
rmc
A cynic like me thinks that's part of the point of bitcoin. Make it easy at
the start to encourage adopters ("mine now and you'll have a big piece of the
pie"), and later adopters will pay you back when it gets popular.

~~~
brador
MLM 101. The top of the pyramid make the big money, everyone else gets played.

~~~
broolstoryco
Then every successful startup out there is an MLM scheme.

------
adrianwaj
The reason why I think it's hot: because the cost-of-stake to purchase it is
orders of magnitude cheaper than ltc or btc.

I worked out that if 1 million coins were allocated to all 3 chain for their
total coin target, $1000 would buy about 0.06 bitcoins, 0.59 litecoins and
5.55 doge. Or 1 million divided into each chains' coins already in existence:
0.10 vs 1.97 vs 15.83 respectively.

So with doge, you get more bang for your buck, a larger slice of the pie for
each $ spent. And a huge sub-reddit to launch into, and a clean piece of
cyberspace to work with.

That's pretty compelling to me just on its own. And the coin I feel is
sovereign to bitcoin. Also, when you see kids drawing pictures of shibes, and
women stripping naked for them (there's a subreddit for it,) you know you're
onto something unique.

The larger population need and want cryptos to work. Doge answers that need
better than anything else right now. That's very important and should not be
overlooked.

~~~
crazydoggers
Errr... you just said that $1000 buys you .10, 1.97 and 15.83 (those numbers
don't even make sense anyhow), which means that .10 bitcoins equals 15.83
dogecoins in value.

So what difference does that make... I can still spend 0.0001 bitcoins or
0.01583 dogecoins which would each equal a $1 in value. There's no difference
in "cost-of-stake" at all.

Why do people have such trouble understanding fractions?

~~~
adrianwaj
3 cakes with a million slices each. $1000 buys you 0.1 of a bitcoin slice,
1.97 litecoin slices and 15.83 doge slices.

(that's according to a cake composed of the current # of coins in existence
for each cake, not the target amount)

So each piece of your cake costs $1000, but each piece takes out a different
proportion from the whole cake (ie a certain number of slices per piece.)

The thing to think about is that buying coins, building an app and launching
into a reddit, would likely be better than buying a mining rig to mine. Even a
single app will inspire other developers to do the same and both will increase
the value of one's coins (ie the size of your piece grows, as does the cake.)
It's like IPO'ing your app on release, it's your coin value that goes up. And
that's hot.

The cake value is determined by the richness of apps that are its ingredients
- and the number of people that are circling it wanting a slice. At the
moment, doge has few apps but many people circling it wanting the cake to
grow. If you build an app that's any good, you've got immediate traction, and
if you hold doge, that value will grow too.

(just my theory anyway)

~~~
crazydoggers
But each slice of pie is infinitely divisible, or nearly so, so it makes no
difference.

At the end of the day, the currency will hold some amount of economic value.
For bitcoin at the moment, it's about $10 Billion USD. The total gross world
product (GWP) is currently the equivalent of about $70 Trillion USD. So lets
imagine a single crypto currency holding the entire GWP.

For bitcoin, that's $70 Trillion / 21 Million bitcoins = $3,333,333 per
bitcoin. For dogecoin that's $70 Trillion / 100,000,000,000 dogecoin = $700
per dogecoin.

Both Bitcoin and Dogecoin are divisible to at least 8 decimal places (and the
algorithms can change to permit greater divisibility), so your unit of
currency is basically arbitrary. You can still spend $1 worth of a $3,333,333
bitcoin just as you can with dogecoin.

Dogecoin is just shifiting the decimal places around. It doesn't give you any
different stake versus Bitcoin.

~~~
adrianwaj
Ahh yes, I see your point, it comes down to what cake you think will grow
faster in terms of what you will buy into.

But working out what you will build into, there are different things to think
about, such as potential users and their desires, and what exists currently to
meet those desires. Steve Jobs was about building things people didn't know
they even wanted, and that'd be something to think about with a doge app. Even
messaging.. all these tips going through, they are all potential relationships
and followups. How can you track who you've sent to? How easy is it for reddit
users to interact with each other outside of reddit?

Can a social network be built around tipping? Maybe a user might want to
bookmark someone for a tip, rather than doing it instantly, or do it off
public record. So basically attaching a username to a set of addresses, which
can be generated on demand. Collecting feedback and ratings between users. It
should be semi-anonymous.

~~~
crazydoggers
> Ahh yes, I see your point, it comes down to what cake you think will grow
> faster in terms of what you will buy into.

Yup, I agree with you there. The problem is that there's nothing inherently
different about Dogecoin that ensures a faster growth rate than Bitcoin.
Bitcoin also has a subreddit, and I would argue a more mature community, even
though it may not be the new hotness.

What is different about Dogecoin, it's faster block confirmation, it's faster
difficulty retargeting, and it's larger reward payout, actually make it
inherently less secure than Bitcoin (Litecoin shares these traits, to a lesser
degree). The reason it's seeing faster growth compared to Bitcoin at the
moment is that mining is still somewhat reasonable with regular hardware, but
this will change fairly soon and slow it's growth rate as miners jump on the
next currency that offers faster payouts.

So why not build your social network for tipping around Bitcoin? Personally
I'd prefer a Bitcoin tip of 0.002 rather than 1000 Dogecoin.

~~~
adrianwaj
A few good apps would cement the doge position. Its reddit growth is massive.
I have ideas for a social network in fact, with screenshots. But I shelved
them, but I have thought it through. Soundcloud tipping is something I
personally would like to see (I think it has massive potential,) some way to
see what artists have attracted the most tips, an easy way for artists to
leave their tipping address which is not a blockchain address, or a link from
each track that uses the referral to work out what track is being tipped
(which the tipper confirms as correct) and generating an address on-the-fly.

[same with youtube, that is also a huge area of tipping. Who wouldn't leave a
single url in all their tracks and videos if they receive tips from it,
especially if the giver is recorded and the initiating media identified?]

Point-of-sale is also underdeveloped.

------
hngiszmo
Doge in particular has no property apart from the name and the hype around the
meme.

There are more than 200 alt coins [1] and the vast majority of these don't
contribute anything new to the field of crypto currencies but many succeed to
win followers just because people keep calling the process that should be
called "policing with a small compensation" "mining for profit". Read
Satoshi's whitepaper[2]. Mining is meant to not be profitable for the masses
and yet it is profitable in so many cases. Why is this? Because people are
confused about the value of the minable goods. Mining is always connected with
an up-front investment and the bigger the industry the more professional you
have to be to do it profitably. Therefore loosers/scammers/lunatics/pump-and-
dumpers (sorry) gravitate towards unprofessional coins where there is no
professionalism celebrating the next big thing since bitcoin and once their
coin of choice turns more mature they abandon ship as the very property they
seek – easy minability – got lost.

Disclaimer: I own bitcoins and was sent 100 reddit-dogetipbot-dogecoins.

[1]
[https://bitcointalk.org/index.php?topic=134179.msg4701768](https://bitcointalk.org/index.php?topic=134179.msg4701768)
[2] [http://bitcoin.org/bitcoin.pdf](http://bitcoin.org/bitcoin.pdf)

~~~
SilasX
>Doge in particular has no property apart from the name and the hype around
the meme.

I think you're neglecting the value of the community. Dogecoin is, from a
technical standpoint, just Bitcoin with some cosmetic changes, but the users
make it much easier to get help and get involved. They're also more willing to
give people dogecoin tips, which encourages spread.

~~~
epmatsw
My impression is that it's more similar to Litecoin in a technical sense since
it is based on scrypt rather than sha256.

~~~
thirsteh
It _is_ Litecoin with the font changed to Comic Sans.

------
kadalashvili
Probably this week's best internet cryptocurrency.

~~~
DannoHung
Whether you think Doge is funny-money or not (I think it is), the thing I like
about it is that it's changing hands (even if it's just for tipping people for
making funny comments) and not really being hoarded for value.

At least not yet. Hopefully not ever.

~~~
Torn
From the article:

> This week, transactions worth a total of $US14 million were made, including
> one Chinese investor who bought $US5 million worth of the virtual currency

------
driverdan
Despite DOGE mining difficulty shooting up this week it's still one of the
most profitable coins to mine thanks to its spike in value. I've been making
$60+ per day mining it. Now if I only had 10x as much hardware...

~~~
losvedir
Are these realized gains? If so, how do you turn it into dollars? Do you go
via BTC, or is there some direct exchange to US dollars now?

It's very funny to me how dogecoin has taken off. :-) I got tipped on reddit
and now I'm hooked.

I think the seamless nature of tipping on reddit (all you have to do is reply
to a comment with +/u/dogecoinbot n and it will send coins) has really spurred
its use.

Btw, now that I have a dogecoin wallet (DRVMiXCneJhFVBy4r4T2zpw9j5f4Tp1KzH),
anyone want to send me some...? :-D

~~~
cmsd2
+/u/dogetipbot 10 doge

there you go.

edited to add (and bring back on topic): this might look spammy, and in fact
it is -- some subreddits don't like all the tipping noise at all, but on
/r/dogecoin it's the big thing that differentiates it from the other altcoins.

~~~
Nullabillity
There was bitcointip way before dogecoin was even a thing.

------
mrfusion
I'm thinking this will be the first viable micropayments platform which is
very exciting.

It seems like that would open up a ton of new opportunities but for the life
of me, I can't think of any good uses for micropayments (beyond paying for
content). Any ideas, HN?

~~~
_wdh
I'm not sure that there are any opportunities for micropayments. It seems like
a solution looking for a problem.

~~~
randallsquared
Spam elimination. It's true that mail clients and servers are pretty good at
removing spam from our mailboxes these days, but there's still all the
busywork that they're doing to send and receive stuff that ultimately never
gets seen. A micropayment messaging service could greatly reduce the amount of
spam that is actually sent, while allowing through messages that the sender is
willing to pay servers to process.

Doing this via a global blockchain might not be viable, of course.

~~~
mrfusion
The thing that bothers me is that US mail already costs 50 cents and I still
get a ton of spam. 90%? So I'm wondering how viable it really is.

~~~
randallsquared
Because it's physical, I think you give it more weight (so to speak). I doubt
you average more than five or ten pieces of physical junk mail per day, but
it's not uncommon to receive hundreds of spam messages a day, or more, most of
which is blocked at the server level, and most of the rest of which is blocked
by your client filters. I've had my email address for about 15 years, and
there are thousands of attempts per day to send to it that my email server
blocks, and then when gmail picks up my mail it cuts out promotional and
social stuff, as well as whatever it think is spam, and I end up seeing 5-10
messages a day total (including mail I want to see; email is not a major
channel for me outside of work any more...).

Further, that physical spam is really, really well targeted compared to email
spam. You may not care about most of it, but at least it has something to do
with your real life (mostly coupons and advertisements for local businesses,
if yours is like mine).

------
ii
Our PM is really into crypto-currencies and when we talk about dogecoins it
always makes me smile and feel better. I don't own any dogecoin yet but they
surely make me healthier and more productive!

------
jiggy2011
It would be pretty funny if dogecoin became a serious currency that one might
use to buy property with for example, but is there any reason it has less
chance than bitcoin?

~~~
aegiso
> but is there any reason it has less chance than bitcoin?

I suspect serious (TM) business people would less like to associate with a
currency based on an internet meme. At least, until its origins are inevitably
buried from the public consciousness.

I guess it remains to be seen which happens first: there is sufficient
infrastructure to deal in realty with cryptocurrencies, or we've forgotten
that its foundation is people captioning dog pictures.

~~~
gabemart
MtGox started as a Magic the gathering card exchange. While it's caused some
snark, it didn't seem to get in the way of MtGox being the premiere BTC
exchange for a while.

~~~
ahoy
That's hardly a 1-to-1 comparison. For starters there are a number of large,
legitimate businesses that make their money selling MtG cards on the secondary
market. Secondly, didn't the folks at mtgox just use the domain name because
they already owned it? AFAIK, the mtgox exchange bitcoin didn't grow out of
the mtg exchange, it just happened to share a domain name.

------
dangrossman
What's the easiest way to buy Dogecoin with USD or BTC? An exchange that
doesn't require a drivers license and wait period?

~~~
Karunamon
What worked for me was Paypal USD on Reddit's /r/dogemarket - there are quite
a few sellers there, and they're verified good sellers. Took about 10 minutes
between posting on thread and getting coins. BTC would take a bit longer just
due to verification times.

~~~
GrinningFool
Be careful with that - increasingly, even verified accounts can't be trusted
as they sell their accounts/get their accounts hacked.

------
viach
Will HN ever integrate Doge tips?

~~~
qznc
I want a HN without voting, but only tipping.

~~~
aaron-lebo
I was actually playing around with this idea. You think it would get used?

I'm also slightly torn on whether each upvote should just be equivalent to
like $.01 in doge or let people tip whatever they want.

I have a good idea of how to make it happen just not sure it is worth spending
time on.

------
owenversteeg
I think the sense of community that’s there is the main reason for Dogecoin's
popularity.

In the Bitcoin community, scams are rampant and those that are scammed never
get their money back. In the Dogecoin community, there is exactly the
opposite. I ran a website called EasyDoge
([http://easydoge.com](http://easydoge.com)) that was designed as an online
wallet service.

Unfortunately, it was hacked and quite a bit of money was stolen. I
compensated everyone out of my own pocket for the losses. This isn’t a rare
occurrence: the victims of two major hacks are being compensated by the
SaveDogemas effort.

~~~
judk
You seem like an honest and caring person, but your post does nor increase my
confidence in dogecoin-- it is being propped up by generous donors?

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JoeAltmaier
So we need more than one distributed virtual currency? What property does this
one have that is interesting beyond that?

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EA
Dogecoin can't be a real thing one day?

Those people probably said the same thing about a website called Mt. Gox:
Magic The Gathering Online which went on to be the leader in BitCoin exchange.

------
riffraff
no dogecoin celebration shall be complete without looking at the scary graphs

[http://coinmarketcap.com/mineable.html](http://coinmarketcap.com/mineable.html)

(I personally think it's a bubble but hey, it's growing while others falter)

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xixi77
Quite honestly, shameless self-promotion of this is getting really tiresome.

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benguild
Is this seriously happening...

