
Dogecoin and the Appeal of Small Numbers - pacov
http://diegobasch.com/dogecoin-and-the-appeal-of-small-numbers
======
willholloway
Great article, but I disagree with one point. I do believe the value of one
Doge will reach one dollar.

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.

~~~
bones6
Interesting analysis. I could see Dogecoin becoming the Whuffie of Doctorow's
Down and Out in the Magic Kingdom.

The currency of karma. The tipping currency of the internet. The post-work
currency?

~~~
oelmekki
Ok now, who will launch karmacoin ?

~~~
dwscape
Launched and already big:
[http://karmacoin.info/blog/](http://karmacoin.info/blog/)

~~~
oelmekki
Nice. Good luck with it :)

------
ck2
It's not just the number of coins.

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
    
    

The random payout on a block is a neat idea. I think they borrowed it from
lottocoin or luckycoin.

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.

~~~
nwh
Weren't idiots? They accidentally hard forked their own currency without
realising what they were doing by changing a transaction limit. The developers
have no idea what's going on and it's readily apparent.

[http://4x.reddit.com/r/dogecoin/comments/1ufl1e/much_concern...](http://4x.reddit.com/r/dogecoin/comments/1ufl1e/much_concern_dogecoin_block_chain_has_split/)

~~~
lvs
Boy, I really wouldn't want to work with you. The unfortunate situation to
which you're referring was the result of trying to mitigate a microtransaction
attack that was happening on the blockchain. It was a rock and a hard place
situation, and because the community was still relatively small and focused,
the devs tried to get everyone to upgrade simultaneously. They chose to risk a
fork rather than risk effectively dead-ending the blockchain with dust. There
was no good solution that didn't come with risks, but it certainly wasn't a
result of "idiocy" as you flippantly imply.

~~~
alttab
If I were to edit this post, I could remove both the first and last sentence
and it would still hold its meaning.

~~~
lvs
No, it wouldn't.

------
krisgee
It's 100% attitude. Doge is fun and playful while bitcoin seems to be the
domain of crazy libertarians and people who just want to be the new bank.

~~~
rmc
As a techie who's been following bitcoin and disapproves of their libertarian
ideology, I like the Dogecoin attitude. It's all a joke. It's like it's not
serious. It's like people _know_ that you're not going to replace all the
money.

~~~
bitops
Funny enough, that attitude may make it more successful in the long term.
History has shown many times that it's not always the 100% _dead serious_ who
make it, but those who are just, well...making it up as they go along.

~~~
VanillaCafe
> History has shown many times that it's not always the 100% dead serious who
> make it, but those who are just, well...making it up as they go along.

Examples, please.

~~~
bitops
Well...there's that one operating system out there that got pretty popular
after some guy in Finland posted it online. Name escapes me at the moment,
though.

~~~
dmoney
Finux.

------
Destitute
The fascinating thing about DOGECOIN, is the vast majority of the internet
judge it purely based on its aesthetic and name. Take away the "DOGE" and it
still has one of the most supportive, charitable, and active communities. All
three of those are important to have a successful currency because that
community grows.

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..

~~~
MarkPNeyer
as i see it, a hallmark of the millennial generation is disdain for people and
institutions that take themselves seriously.

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.

------
aresant
Just a random comment on the whole "community raised 25k"

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).

~~~
citricsquid
That's interesting! Do you have a link to hand? Thanks!

~~~
aresant
Sure

[http://www.reddit.com/r/dogecoin/comments/1virfc/lets_send_t...](http://www.reddit.com/r/dogecoin/comments/1virfc/lets_send_the_jamaican_bobsled_team_to_the_winter/ceu05jf?context=2)

------
flatline
I believe the problem they describe is both real and somewhat frivolous at the
same time.

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!)

------
earlz
I got into Doge when it was about a week old, stupidly bought like 1000 DOGE
for 0.001BTC (there wasn't yet an exchange), which was way overvalued at the
time. Then I setup cpuminer on my computer and let it run for a week and
watched as 10,000 DOGE was added to my wallet. And then my mining pool
shutdown. Just setup a mining pool account again this week and now my
projections are looking more like 1000 DOGE every couple of weeks. ughhh

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

~~~
boyter
Agreed. I was mining primecoin to get bitcoin, and noticed this new thing
called doge. Since I like the idea of having 10,000 of something I exchanged
for it instead.

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.

~~~
Blahah
Any good resources for getting started with day trading?

~~~
boyter
To be honest I just winged the whole thing. Did all the trading on bter.com
which I am a fan of.

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.

~~~
Blahah
I mined about 50k doges for fun, and now I'm looking forward to having more
fun playing with it :)

------
jmuguy
I switched from mining LTC to Dogecoin today. Feels good to get 100s of coin
an hour compared to 0.002 LTC. So yeah small numbers and all that.

~~~
rch
This is a little absurd. It's like hearing that people living near the beach
just started using shells as money all of a sudden. Except without even the
inconvenience of physical shells.

~~~
smtddr
We're all humans here... _I think_

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...](http://www.insanee.com/update/wtf-2/400-bucks-on-candy-crush-is-
just-too-much-money)

~~~
oafitupa
"The idea such a thing as bitcoin, from an anonymous dev, somehow reaching
$1,000 each is "absurd""

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.

~~~
smtddr
Heh, okay. So I take it you're a millionaire because when you first heard of
bitcoin you were like "That's a great idea!!!" and minded/purchased millions
of them. Or if you missed that train, you got onboard Litecoin when it was
less than $5... or Namecoin when it was less than a dollar but shot up to $15
during November 2013....

~~~
oafitupa
Not a millionaire in USD because even though I did hear about Bitcoin very
early and I did think "That's a great idea!!!" (I was lucky enough to have
studied a bit of cryptography just before hearing about Bitcoin), I wasn't
able to buy much because I live in a country that suffers one of the very
problems Bitcoin was created to fight (capital controls). Using my laptop to
mine was out of question, losing it would have meant also losing my job and
become homeless, so it wasn't a risk I could afford to take. Having said that,
I'm way wealthier than I could have expected to be at my age and general
situation, thanks to Bitcoin.

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.

~~~
smtddr
Good for you. Enjoy your money.

------
finnh
I am the only one who reads "Doge" as its pre-meme value: the ruler of an
italian city state like Venice back in the day?

~~~
pcrh
I guess Doge as in Dogecoin was meant to be pronounced "doggie", deliberately
misspelt, whereas the Venetian Doge is pronounced /ˈdoʊdʒ/ (~doj).

~~~
klez
The E at the end of doge (Venetian ruler) is not mute.

~~~
pcrh
Wikipedia has the e as mute in Venetian but not in Italian...?

[https://en.wikipedia.org/wiki/Doge_of_Venice](https://en.wikipedia.org/wiki/Doge_of_Venice)

~~~
klez
I'm Venetian, so I'm probably biased, but I never heard the word 'doge'
without the 'e' even outside Venice.

~~~
pcrh
Maybe Wikipedia needs correcting...

------
steveklabnik
Takeaway: People are not rational. You can exploit this for marketing
purposes.

~~~
MysticFear
Also, people are emotional. Not logical algorithmic calculators.

------
minimax
Can anyone comment on the profitability of mining Dogecoins vs bitcoins? It
seems weird that mining one crypto currency would be more or less profitable
(in dollars per watt terms) than another. Rational miners seeking to optimize
profits would tend to mine the more profitable coin which would drive up the
supply and drive down the price until an equilibrium is achieved.

edit: While we are at it, does anyone know how many dogecoins can you expect
to mine per kilowatt-hour?

~~~
fragsworth
Mining does not drive up supply. The profitability depends on the exchange
rate and current difficulty.

~~~
minimax
Think about it this way. I want to turn my electricity into dollars by mining
crypto currencies. I mine some coins and then sell them to lock in the profit.
Putting my freshly mined coins on the market increases the supply of coins
available for purchase (and it should marginally drive down the price).

~~~
skybrian
The increase in supply is fixed by the algorithm, so you're really just
increasing the difficulty and making it less profitable to mine. If more
people decide to buy at an exchange instead of mining, it would tend to
increase the price.

------
drawkbox
Dogecoin is one of those things that is right on the border of insanity and
genius. The brand might give it such momentum and it could fit in as the
internet tip karma. Reddit gold, gittip, doge, types of coin have social merit
for sure and a bit of monetary reward.

------
jellicle
Great post. Also perfectly explains why the idea that bitcoin will rule the
world is nonsense; there's infinite competition from other fad currencies.

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.

~~~
nyan_sandwich
You know, it's probable that someone will invent an automatically diversified
wallet that tracks the market cap of cryptocurrencies overall. Rise and fall
of new cryptocurrencies would be of interest only to speculators.

------
croddin
Instead of trying to set the value of each denomination of a currency to a
certain amount why don't we use SI prefixes for them? Making very large and
small numbers more relatable is what SI prefixes are designed for.

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.

~~~
mason55
That has sort of happened. People discuss dogecoin in terms of xxx satoshi
where 1 satoshi is .00000001 BTC. So dogecoin is currently ~170 satoshi or
.0000017 BTC

------
bitops
You know most people don't want to believe that dogecoin is a real virtual
currency.

[EDIT: Apparently some people on HN have not seen 'Cool Runnings'.]

~~~
steveklabnik
It's more that short posts that consist entirely of cultural references for
the purpose of making a joke are downvoted.

Generally.

~~~
bitops
That's the thing - my karma is high enough that I know what not to post.
Generally speaking. Every once in a while though, I get tired of pretending
that I don't also have a goofy sense of humor and stuff like this slips
through. Oh well.

~~~
MartinCron
Humor is risky, sometimes it will flop, sometimes it will be greatly
appreciated.

I think you need to do a little more than just plug cultural references,
though.

------
JumpCrisscross
Comes up in share grants as well. A 10,000 share stock award sounds a lot more
impressive than a 50 share stock award, even if the former company has
10,000,000 (0.1%) shares and the latter 10,000 (0.5%).

~~~
cbr
When a stock isn't publicly traded yet thinking of grants in terms of
"percentage of the company" is helpful to get around this bias.

------
1qaz2wsx3edc
It's interesting when you look at 42/BTC/LTC/DOGE. It seems the common
denominator is rarity. The less rare, the less value, the more the higher the
value. Sounds similar to something. DOGE are the pennies of cryptocurrencies.
Just two cents, or two DOGE? I'm not sure anymore.

~~~
steveklabnik
People have been saying that Litecoin is the silver to Bitcoin's gold for a
while. Now some are saying Dogecoin is the bronze to Litecoin's silver...

~~~
James_Duval
On the Dogecoin subreddit, people have been arguing that Bitcoin is gold,
Litecoin silver, and Dogecoin is money.

------
spokenn
Where can you exchange $20 for 10k DOGE easily? Doge-base anyone?

~~~
boyter
You need to buy Bitcoin first. Once you have $20 of Bitcoin load it into an
exchange that takes Bitcoin and trade. Apparently cryptsy is bogged down with
orders, so I would suggest [http://bter.com/](http://bter.com/) which has been
working quite well.

------
patrickg_zill
I view Bitcoin as being more like "gold" and Dogecoin as more like "change in
your pocket". As it is even with the recent runup in price, the value is not
even 1 penny USD per Doge.

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.

------
interstitial
I think it's ironic that 'Small Numbers' in now #2 with 23 points and 2
comments (well, 3 now). The HN penalty regex isn't fine tuned. Also, ironic,
that much of reddit has a financial incentive to promote it. Can I promote
real estate and bulletin board stocks if I give it a tech slant?

~~~
bendoernberg
Next thing you know people will start submitting blog posts about their own
companies!

------
chris123
My general thought, at least thus far, was/is that the "mainstream" crypto
currency market will be a winner-take-all kind of market. But maybe there will
indeed be one crypto currency for big transactions and one for small. It will
be interesting to see how this plays out. As an insurance policy of sorts,
I've acquired my first-ever Dogecoin. I am guessing others will as well. Hmm.

------
catshirt
dogetips should replace "likes" "upvotes" etc

------
JulianMorrison
Dogecoin is what finally convinced me that the internet had eaten reality.

------
joshdance
When I first heard about dogecoin I laughed. When I saw the circulation I
paused. When I learned more I got interested.

------
phaed
Aaaand there goes our precious low difficulty.

------
goatse
Goatse Coin is coming - goatse.cx

------
mmaunder
I once got a letter that told me to forward it to at least 10 of my friends
and send $20 to someone.

