Dogecoin
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Dogecoin

dogecoin.com|DOGE|December 8th, 2013 logo
Written on: May 24th, 2015 | Author: David M
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Summary

At bitreview, we deliberately choose altcoins for review that have offered a unique concept to the cryptocurrency market, both to illustrate how the market is/has developed and because these are the only coins we feel have any intrinsic worth. On the face of it, Doge is not one of these coins. It is not innovative from a technical perspective. The 100 billion coin cap, already almost entirely released, ensures it will never be worth much. And the coin mascot, a Shiba Inu that enjoyed 15 minutes of fame as an internet meme, gives the impression that the coin is a joke.

And these are the exact reasons that DogeCoin has enjoyed such success. It does not take itself too seriously. The Shiba Inu is a super-friendly mascot, and is representative of a welcoming and friendly Doge community. It offers newbies a soft landing into the crypto-market, an alternative to the serious and perhaps intimidating tomes of the bitcoin community.

And it's almost-worthlessness provides the coin with great noncommercial worth. It has served to foster a tipping culture that allows for the showing of gratitude - and reciprocal thankfulness - that has solidified and expanded the community without breaking the (Doge) bank. And almost-worthless should not be confused with worthless - indeed, Dogecoin is consistently top-10 by market cap in the crypto market, and boasts the most trades by volume of any coin.

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Community

The community has developed its own Doge-slang, usually based on the perceived internal dialogue of the Shiba Inu in assorted cutesy memes. Shiba Inu's thoughts tend to start with a few adjectives, like so, very, much, such and many. And so, in Jackson Palmer's famous introduction of DOGEcoin to the bitcointalk community, he described it as: very scrypt; such random; much profit; wow; many coin. Community members, known fondly to one another as "shibes", often use the phrase "to the moon" as a tongue-in-cheek reference to the future value of Doge. For a full explanation, check out noobshibe, or head over to the dogecoin subreddit. They will be happy to explain!

And if you are happy with the explanation, why not give a tip? Tipping is arguably the foundation of the community. It is facilitated by dogetipbot, a service allowing "you to throw change at people on the internet". Dogetipbot is integrated with reddit, twitter and twitch, allowing users to tip Dogecoin with simple command prompts embedded in messages.

The tipping functionality has been used for loftier purposes than simply expressing gratitude for a helpful post. For instance, the "Doge4Water" twitter campaign raised $50,000 worth of dogecoin - 40 million dogecoin at the time - to build a series of wells in Eastern Kenya. The campaign was supported by the massive community of Shibes who donated their own DogeCoin and publicized the initiative to friends and family, many of whom also contributed.

Speaking of publicity, other notable initiatives - like sponsoring Josh Wise's Nascar at Talladega in May 2014, and bankrolling the Jamaican Bobsled team's trip to the Sochi Olympics - we're exhilarating initiatives for the community, serving also to generate some feel-good news so often lacking in the wider crypto space. It is also easy to see that the niche "targeted" - for lack of a better word - by Doge is different than the bitcoin demographic. Dogecoin, through its "virality", has done a great service to the wider market.

And DogeCoin inspired the Dogetipbot, which is a nice little innovation. It offers an alternative p2p method of monetizing user-generated content, which could have some interesting effects on how marketing works in the future. A decentralized network of users can be incentivized to contribute their experiences or expertise in the review or explanation of any particular product, whilst those helped can easily offer thanks in the form of a quick tip. If we were to integrate a forum, for instance, we would very much like to integrate such a functionality.

Controversy

Alas, even a community with a heart of gold is not immune to controversy. And this controversy has a name (or three, as the case may be): Alex Green - a.k.a. Ryan Kennedy, a.k.a. Ryan Gentle. Mr. Green surfaced in the dogecoin subreddit shortly after the coin's December 2013 launch, and developed a reputation for extravagant tipping. He also "mistakenly" overtipped a charity on DogeCoin's behalf, and shortly after sent a user $1500 in dogecoin. All this generated a good deal of publicity, both for Doge and himself.

And this, it seems, was the purpose. Mr. Green had established an exchange called Moolah, which was quickly becoming the number one spot to trade dogecoin to/from bitcoin. He leveraged the good will he had established into four rounds of fundraising, through direct appeals to the community, and eventually raised $500,000 worth of Doge. "How many people look at a company like Microsoft and say 'man, if only I would have invested'", wrote COO Landon Merrill on the Doge subreddit. "Moolah is giving you that chance now". Shibes invested and moved their funds into Moolah.

In a fascinating expose on the whole episode, The Daily Dot describes a skype chat between Green and Merrill representing Moolah, and Jackson Palmer alongside DogeCoin steadfast supporter and community chat moderator Ben Doernberg. Palmer and Doernberg were extremely concerned that Green was taking advantage of the community they had built. Green, for his part, constantly threatened lawsuits. "If you step a foot out of line, myself and Landon will drag you to court. If you cause problems, it's going to end badly for you".

Tragically, the DogeCoin community sided with Green and Merrill. Doernberg and Palmer both resigned as moderators, and were followed by much of the old guard. The community was in crisis, and it began to take on a different feel. Green and Merrill had not only effectively disposed of the coin's altruistic founders, they had replaced the whimsical and jokey vibe with a much more cut throat, capitalistic feeling.

In October 2014, Green announced that Moolah and it's acquisition Mintpal were bankrupt, and then disappeared with at least $1.4 million in doge user funds, with some reports as high as $4 million. Messrs Palmer and Doernberg presented evidence as to the actual identity of Green, who turned out to be a pretty experienced con artist. Considering the target, a group of fun-loving and playful shibes, the crime seems especially perverse. Green was allegedly arrested recently (As of February 2015) along with aid Chelsea Hopkins in the UK. Police there will not make public their identities until they are officially charged.

Will a community built on trust, kindness, fun and openness survive such a betrayal? Can it replace the people that have left due to the episode, and maintain the optimistic and irreverent tone that made the place so appealing and meaningful? We can only hope so. To the moon, dogecoin!

Launch Methodology

Jackson Palmer announced the launch of Dogecoin on bitcointalk, and provided all necessary information to begin mining. There was no premining, which allowed equal opportunity to developers and community alike. Mrrs. Palmer and Markus chose to utilize the Scrypt mining mechanism to avoid the introduction of ASIC miners into the pool, which would introduce a decidedly un-doge like element into the network.

Bottom Line

Dogecoin is fun and welcoming, an excellent entry point into the world of cryptocurrency. While the coin started out as a joke, it resonated with a large community and has resulted in some fantastic philanthropic initiatives. While itself offering no true innovation, Doge has inspired new technologies, most notably dogetipbot which offers people the ability to tip strangers in appreciation for their content contributions. The flipside to trolling, brought to you by Doge. Let's hope Doge sticks around and blesses the internet with more of its kindness and positivity!

IMPORTANT INFO

  • Symbol: DOGE
  • Market Cap: $14 million as of May 24th, 2015
  • Type of Altcoin: Alternative network
  • Mining methodology: Scrypt
  • Founders: Jackson Palmer and Billy Markus
  • Block Time: 60 seconds
  • Money Supply: 100 billion
  • Total release time: 1.5 years
  • Difficulty level: DogeCoin utilizes digishield, which recalibrates difficulty after every single block.  This is meant to avoid massive influxes of hashing power taking advantage of long delays between recalibration. 
  • Rewards: Scaled down from 1 million DOGE for first 100k blocks to 10,000 after 600,000 blocks mined.