The meme-based ‘joke’ currency surpassed Bitcoin this week. What's the deal?
Now that Kanye West has threatened to sue the makers of CoinyeCoin, it's time for another altcoin's moment in the sun. Enter Dogecoin, the cutest cryptocurrency on the internet. Initially dismissed as a novelty (much premature), it now sees double the amount of transactions as Bitcoin and has already trumped every other digital currency on the market. So how did a joke currency become one of the fastest growing altcoins on the web?
In late November, Dogecoin co-founder Jackson Palmer was tickled by the flurry of cryptocurrencies emerging on the market and registered the domain Dogecoin.com to spoof the altcoin boom. He slapped on a simple logo, pleased with his take on the doge meme that had been doing the rounds on the internet.
“At that point, it was nothing more than a hilarious idea,” he says. “But by the time I’d woken up the following morning, Billy [Markus, a former IBM engineer] had tweeted me a working QT Wallet for Dogecoin. The rest is history.”
Creating a QT Wallet meant that Dogecoin could function as a working digital currency, in the same way that Bitcoin does. But the first sign that Dogecoin was more than just a passing fad was a few weeks later, when it jumped more than 300 percent in value in a day – the greatest increase of any cryptocurrency over 24 hours.
A Dogecoin micro-economy has even sprouted up around the currency. On sites like shibemart.com and the subreddit /r/dogeservice, you can use Dogecoins to pay for Latin translation, Photoshop services, or even getting your plumbing fixed (currently only available in Vancouver).
But the biggest use of Dogecoin is also what distinguishes the altcoin from its counterparts: tipping.
Made a witty comment on a subreddit? You could get tipped Dogecoin. Created a cute macro? Have a few Dogecoins. As Dogecoin investor Ben Doernberg explains, people on social networks like Reddit, Twitter or Imgur regularly produce great ideas, images or content. You could have a million followers, get a thousand upvotes or reblogs, he says, but there’s no way to capitalise on that in real monetary terms.
Dogecoin is already changing that. According to Palmer, the number one use of Dogecoin is tipping, “to give other people kudos. It means something more than a ‘like’ or an upvote when you send a person 50 DOGE for their efforts.” He envisions a future where Dogecoin is the “number one internet currency for tipping people and telling them they’re awesome”. Think of it as a nano-payment for making people smile.
This thread on Dogecoin’s most active community, /r/dogecoin, is a case in point: user the_mad_tipper asked people to post their best images in exchange for coin. It’s that effusive, madcap generosity of spirit that also distinguishes Dogecoin out from other altcoin.
“I’ve spent a ton of time on internet communities in my life and I think the Dogecoin subreddit is probably the most positive, optimistic and happy and friendly place on the internet I’ve ever seen,” Doernberg says.
“In other words: it’s pretty hard to be a dick on the internet if your mascot is a cute dog"
On Christmas Day, several Dogecoin users found that a hacker had stolen about $12,000 worth of coin – the community quickly rallied round with Save Dogemas, a campaign to reimburse the victims, and subsequently raised over 11 million Dogecoin. As Doernberg notes, “with other coins, you’d get laughted at or told it’s your fault.”
Palmer thinks it's all to do with the intrinsic qualities of the Shiba Inu (or "shibe", as the Dogecoin community calls it) meme that started it all. “I think Dogecoin has taken the warm fuzziness of the shibe in that classic doge meme and helped build a community of kind-hearted, generous people around this currency,” he explains.
In other words: it’s pretty hard to be a dick on the internet if your mascot is a cute dog. Dogecoin users have adopted the slogan “To the moon!” – and it looks as if they stand a good shot. Dogecoin might be worth three million times less than Bitcoin, but daily usage is double that of Bitcoin, which suggests that more people are actually using the altcoin the way they would a real currency, unlike many Bitcoin users who hoard the coin for speculative purposes. Dogecoin has been hailed as "history happening in real time": there are already plans for a real-life Dogecoin meet-up in New York, and Palmer has just set up the Dogecoin Foundation, a charity fund based on the altcoin.
“Money is ultimately a social thing,” Doernberg says. “The only thing that makes money worth anything is that people will accept it. Dogecoin is the only crypocurrency that is welcoming and accessible for new people. I don’t think it overplays Bitcoin, but if there’s room for two or three currencies, dogecoin could easily be the currency for gaming or families with kids. I can see kids getting their allowance in dogecoin in the future.”
Such success. Very wow.