18 ms·

Dogecoin's inventor looks to the past for insight into the future

269 points by thisisit 9y ago

meri_dian 9y ago
>"To deliver a peer-to-peer alternative to cash that, through decentralization, did away with the need for trust in financial institutions, which the 2008 crisis showed to be unscrupulous, and often corrupt." The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. Decentralization would not do away with the need for financial institutions (or the toxic incentives that can drive them and the ecosystem in which they exist). The USD is pretty decentralized already. Sure the money supply itself is centralized, but the USD is a functioning currency because all people who accept and deal in dollars accept the fact that the dollar is a currency. We're all decentralized nodes in the Fiat network.
- ummjackson 9y ago
  (author here) I agree! I was calling out Bitcoin's initial goals in the article but don't 100% align with them myself. Financial institutions came to exist for a reason and I'm really not on board with everyone "being their own bank" as I feel it'd be a step backwards from what we have today. What I do agree with is the need for more audit-able, accountable systems so the institutions we trust are less susceptible to corruption.
  - lumberjack 9y ago
    Are you sure that was Bitcoin's initial goal? Or just speculation from early adopters? In the actual white paper, Satoshi does not mention any of this, although like you, I do remember these motivations being used very early on. I don't know their origin, but Satoshi simply talks about non reversible transactions, in the context of payments over the Internet.
    - SippinLean 9y ago
      Satoshi did mention it elsewhere: >The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible. http://satoshi.nakamotoinstitute.org/posts/p2pfoundation/1/#selection-33.0-33.538 http://satoshi.nakamotoinstitute.org/posts/p2pfoundation/1/#... Even the whitepaper has a bit about the weaknesses in financial institutions in the intro: https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf
      - ummjackson 9y ago
        + the genesis block included the text "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" (Source: https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block)
      - Robotbeat 9y ago
        What's really fantastic, though, is that cryptocurrencies are currently in a large bubble themselves. Privacy of the exchanges is no better as you literally have to send them a picture of your ID. And several exchanges have been hacked with the money stolen. So far, I'd say cryptocurrencies (for the average joe/jane) are WORSE than regular banks. And, on the last point about micropayments, well Bitcoin now has such massive transaction fees and massive overhead that micropayments are even more impossible (without adding more layers). The ideological/theoretical purity of cryptocurrencies is completely negated by using exchanges and by the perverse incentives of proof of work leading to enormous returns to scale for those who have developed custom ASICs. Decentralization requires more effort than centralization, but something that requires effort doesn't generally grow very fast... And so we've centralized cryptocurrencies in a haphazard way, making them a lot easier for people to use--thus enabling cryptocurrencies to grow very fast--but also negating all the theoretical benefits. Something useful will eventually come out of the current mess (and there are various initiatives that help address many of these flaws), but probably not before the Zeitgeist becomes disillusioned with cryptocurrencies.
  - meri_dian 9y ago
    Hey! I definitely agree that accountability is important. How do we improve accountability though? I'm skeptical about bitcoin or any other cryptocurrency doing so. From what I know about the financial crisis, it wasn't the nature of fiat currencies that led to the crisis, but rather the complexity of financial instruments obscuring the weakness of underlying mortgage assets combined with incentives driving industry players that turned out to be toxic in the long term. It doesn't seem to me that a distributed currency will eliminate financial complexity or perverse incentives. But as an aside, I remember laughing about Dogecoin with friends back in 2014 when we first discovered it. It must feel awesome to have created something people around the world know about.
    - ric2b 9y ago
      > From what I know about the financial crisis, it wasn't the nature of fiat currencies that led to the crisis, but rather the complexity of financial instruments obscuring the weakness of underlying mortgage assets combined with incentives driving industry players that turned out to be toxic in the long term. Bitcoin wouldn't prevent the mortgage fraud, it would prevent the immoral bailouts that happened after that and that told the industry "don't worry, you're too big to fail, feel free to try harder next time".
  - otakucode 9y ago
    They did come to exist for a reason: geography. Primarily, they served as a way to deposit money in one physical location and withdraw it at a different one at a different time. In the modern era, more and more of the economy as a whole flows through these institutions who do nothing more than shuffle numbers down a network link - and yet they charge a percentage cut of the transaction. It costs no more to transmit a larger number, yet they see fit to take more and more depending upon its size. Payment processors are taxing bodies. Mostly unregulated and entirely non-governmental bodies that have as much, if not more, control over the supply of money in the economy than the Federal Reserve. If the Federal Reserve sought to increase the supply of money in the economy, but the payment processors disagreed, who would (or even could) stop them from raising their rates for payment processing to directly counteract the actions of the Fed? No one. They could do it, and they will do it eventually. How anyone could be comfortable with middlemen who provide nothing of significant value sitting in on almost every single transaction which occurs in the entire economy and skimming off the top I have no idea.
    - semanticist 9y ago
      > who would The financial services regulator in the appropriate country. In the UK that's mostly the FCA, in the US it's apparently the guys listed here: https://en.wikipedia.org/wiki/List_of_financial_regulatory_authorities_by_country#U-Z https://en.wikipedia.org/wiki/List_of_financial_regulatory_a... > (or even could) stop them from raising their rates for payment processing Using financial services regulation. It's not like they're immune to laws. Your argument is for more regulation, not a deregulated cryptocurrency.
    - Jesus_Jones 9y ago
      But also those large bodies provide a certain amount of safety when transferring money, so you can see where it went or if a transfer got lost. That's not true with crypto always, people are on their own. There are endless stories of big banks screwing customers over, often because of uncaring bureaucracy, but I do believe a giant bank will set things right, even if I had to complain - I've never had a problem really, but I have heard of people who do, and don't forget Wells Fargo.
  - cornyNetHandle 9y ago
    What I never understood with the blockchain is the idea that it would change the politics of finance in favour of the little guy. As far as I can tell, financial institutions are exceedingly well practiced at co-opting new monetary systems, as they have been doing exactly that for a very long time, so I never thought that a new model of ledger was ever going to really faze them.
    - Certhas 9y ago
      It should be a bonanza for them. Unregulated market. Every trade/contract they want.
      - deleted 9y ago
        [deleted]
      - Demiurge 9y ago
        I don't think anyone wants unregulated markets for everyone, just like no one really wants anarchy. There are criminal, or rebellious elements in every group, but co-beneficial arbitrage is what we've evolved to.
        cornyNetHandle 9y ago
        Do you mean anomie? I know a few Kropotkin fans who are fairly certain that they want anarchy.
    - ummjackson 9y ago
      Absolutely, and that's what is happening right now. I honestly don't have a solution for this problem... other than trying to make it as least appealing to these institutions are possible.
      - cornyNetHandle 9y ago
        The only 'solution' I can see to this problem, is to develop an alternative to the floating monetary unit, of solving the calculation of exchanging goods and labour. Money is useful, because it solves for the 'n' of a given trade by using all the pricing of transactions as a form of parallel computation, so the fact that it may often give sub-optimal results is outweighed by the fact that it has such a low overhead, compared to the traditional alternatives, such as planned resource based economies, which have historically been plagued by both sub-optimal results and a very high overhead. The revolutionary work in economics isn't being done on the blockchain, or in any other new currencies for that matter. It is being done in the world of AI and big-data, when applied to logistics. If you really want to revolutionise money, you have to try and make it obsolete. edit: Also, seeking sources of funding may be problematic for such an enterprise - "Please can you invest in this plan to destroy capitalism." - being a particularly difficult sell. Perhaps if it can be reframed as - "Please can you invest in this plan to destroy capitalism that also has excellent quarterly returns." - then it might get somewhere.
  - frik 9y ago
    Related to joke DogeCoin: One of the US crypto exchanges "Kraken" went dodo. It has been offline for more than 30 hours without prior notice. Maybe another joke, or MtGox -.- https://news.ycombinator.com/item?id=16131750 https://news.ycombinator.com/item?id=16131750 ***MAINTENANCE ANNOUNCEMENT*** Kraken is presently offline for maintenance. While maintenance is underway, the website and API will not be reachable, and orders will not be able to be placed or canceled. The Kraken Team https://www.kraken.com https://www.kraken.com - a former(?) major US crypto exchange
  - wellboy 9y ago
    Also in yhe case of the dozens of countries with incredible inflation, Venezuela, African countries?
- mkirklions 9y ago
  >The USD is pretty decentralized already People are insane. Fiat currency is the definition of centralized currency
  - lukasm 9y ago
    It really depends what you mean by that. If you compare it to currency in a game which can be removed with a bug that sets a few bits then USD it's quite decentralized in some respects.
  - abakker 9y ago
    Please define what you mean by Centralized and Decentralized. I believe you and the OP are talking at cross purposes. the USD is decentralized in that P2P transactions are accepted with almost anyone in the world without needing a centralized intermediary.
    - meri_dian 9y ago
      Exactly. I'm realizing now that we need to be much more precise when we talk about centralization of currencies to have meaningful discussion.
    - JumpCrisscross 9y ago
      > P2P transactions are accepted with almost anyone in the world For a startling Exhibit A, consider that North Korea [1] and Iran [2] hold and transact with large quantities of U.S. dollars (in physical cash) despite American sanctions. [1] http://www.cnn.com/2017/10/16/asia/hong-kong-north-korea/index.html http://www.cnn.com/2017/10/16/asia/hong-kong-north-korea/ind... [2] https://www.wsj.com/articles/a-tally-of-iran-sanctions-relief-includes-more-than-10-billion-in-cash-gold-1483112751 https://www.wsj.com/articles/a-tally-of-iran-sanctions-relie...
    - komali2 9y ago
      Is it centralized in the sense that a single organism can exert more control than anyone else on the real value of the USD by printing more?
- jzoch 9y ago
  The USD is one of the most centralized currencies in the world. Just because everyone has some does not mean its decentralized. It is still minted and distributed through centralized silos owned by the government, and policy enacted by the government ON the currency is still effective.
  - md2be 9y ago
    And it’s the reason why we have such an incredible economy.
  - macawfish 9y ago
    That comment was a reference to the fact that money itself operates on belief systems and motivations that are distributed and decentralized
  - JumpCrisscross 9y ago
    > it is still minted and distributed through centralized silos owned by the government Money can be created by privately-owned banks, which adds a significant decentralized element to the mix. Cash settlement is also, if done physically, a totally de-centralised transaction mode.
  - erispoe 9y ago
    In modern systems money can be created by banks lending money. That's an interesting property as money creation is tied to the course of the economy. However, this can lead to inflation if the amount of money created actually exceeds the growth in economic activity. In the gold standard model where the amount of money is completely uncorrelated with economic activity, you have inherent deflation. Deflation is a serious threat, as it pushed people to hold onto their currency (as the real value automatically rises) instead of spending or investing it. Bitcoin is really a digital gold standard. There is no way that a gold standard currency can support a growing economy efficiently.
    - throwawayjava 9y ago
      > completely uncorrelated with economic activity It's always surprising to me when (not-already-on-the-top-f-the-world) software types see virtue in gold standards. The fact that our work -- moving bits around -- produces so much economic value is an epitome of everything that's wrong with a gold standard.
- tribune 9y ago
  The point of cryptocurrencies is to rediscover everything we already know about money, the hard way
  - abakker 9y ago
    That is certainly Matt Levine's take, as well. It is kind of funny, actually. Engineers rediscovering by doing, and wall street having these existential self-doubts about whether there is some hidden sophistication which is entirely absent.
  - Mtinie 9y ago
    On the surface that can be a beneficial exercise. 400+ years of financial dogma and cruft has accumulated in the world's financial system(s). If the sole eventuality of this period of cryptocurrency development is that some of the "sacred cows" stood up in the four centuries since are torn down, and outdated models are discovered and updated to better serve people of today, I consider it worthwhile progress.
    - Sangermaine 9y ago
      Except that's not what's happening. What's happening is that some people are relearning the hard way why those "sacred cows" are so sacred. We've become so used to having them that some people take them for granted and forget why they exist, like the "raw water" people forgetting why municipal water systems exist. e.g. "Why do we need all these regulations anyway? It's just statist slavery!" later "Ah right, the fraud and the scams."
- nerdponx 9y ago
  FWIW, there's a plausible argument to be made that the 2008 crisis was aided (although not fundamentally caused) by excessively loose monetary policy in the mid/early-2000s, followed by sharp tightening. That isn't to say the mortgage industry wasn't propped up on fraud, etc. But it wasn't irrelevant.
  - UncleEntity 9y ago
    Well, Austrian Business Cycle Theory claims that it was indeed fundamentally caused by excessively loose monetary policy. As to plausibility, I guess that depends on your personal views.
- creeble 9y ago
  >”The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency.” Indeed, the ‘sort of activity’ which led to crisi is simply called greed. As far as I can tell, crypto currencies have simply become new fuel for greed thus far, and the result will likely be the same. A cure for centralized currency != a cure for greed.
- andrewla 9y ago
  > The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. I can't speak for every ideological bitcoin supporter, but you and I may differ on what constituted the "crisis". I agree that it would not deal with the activity which led to the financial crisis. But to many, the crisis was not that the banks all failed, but that they were not allowed to fail, and were bailed out instead. The genesis block doesn't say anything about addressing irresponsible behavior on the part of the banks. It says "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" People can do stupid and irresponsible things, and they can do stupid things with other people's money, but they have to bear the consequences.
  - stanleydrew 9y ago
    I'm not sure what your point is. If all banks switched from dollars to Bitcoin, they could still be bailed out.
    - andrewla 9y ago
      Sure, if the government in question has the funds on hand or can borrow them. But they can't just literally increase the number of Bitcoin by a factor of 5 [1] in order to give trillions of dollars to people who have demonstrated their incompetence at handling that money. [1] https://fred.stlouisfed.org/series/BASE https://fred.stlouisfed.org/series/BASE
      - paulmd 9y ago
        > But they can't just literally increase the number of Bitcoin by a factor of 5 [1] in order to give trillions of dollars to people who have demonstrated their incompetence at handling that money. Sure you can. It's code, why wouldn't you be able to change it? There is no reason that cryptocurrency has to be inherently deflationary, rewards can easily be issued at a constant rate or any other rate. You are mixing up Bitcoin, the libertarian implementation, with the abstract cryptocurrency in general. This is an implementation detail. In fact, there is actually already a rather storied history of centralized interventions to bail out failing institutions. See: the DAO hack and the subsequent rollback... Could Vitalik just as easily have said "JP Morgan now has +5 million Eth?" Absolutely. Nobody else necessarily needs to accept that version of the blockchain (see: Ethereum Classic) but there is a network effect here: if everyone else agrees to accept that version of history then sucks to be you, everyone wants to deal with Eth not PaulCoins. And people tend not to be willing to accept calamity when offered an alternative. Ethereum Classic is the version of history which best upholds those high-minded libertarian ideals, but it's also the version of history where a single attacker has 15% of all the ether.
- wuliwong 9y ago
  I disagree, I think that the federal reserve's artificially low interest rates and essentially unlimited supply of money for the banks to loan out at these interest rates were at the heart of the most recent financial crisis in the US. A decentralized currency would certainly mitigate that.
  - soVeryTired 9y ago
    What exactly do you mean by 'artificially low'? All short term rates are just a function of central bank policy. The bank will raise or lower rates in an attempt to control inflation (and any other mandate). 'Abnormal' I'd grant you, but not artificial.
    - joyeuse6701 9y ago
      artificial as in not 'natural' and natural as in set by market forces, which a central bank setting a short term rate is not a 'natural' market force.
      - soVeryTired 9y ago
        It's been a long time since short rates were set by market forces. And the financial system wasn't particularly stable then either.
  - un_montagnard 9y ago
    No. The heart of the crisis is people believing they can easily make money by investing in a product they don't understand. I can sell a CDO on CDS in Bitcoin, and make a lot of money while the buyers are all getting screwed. And they will be even more screwed as nobody will print cash to cover or limit their losses.
    - stale2002 9y ago
      The people who invested in CDOs SHOULD get screwed. The rest of us who weren't stupid enough to do that shouldn't be forced to cover their losses. That's the point.
- xorcist 9y ago
  > The USD is pretty decentralized already. The decentralized aspect of using dollars in cash form(!), is something I would rather call permissionless. And that is exactly what Bitcoin set out to approximate for the Internet age. (Indeed the "cash" reference in the whitepaper title refers to fungibility and permissionlessness, not tangibility or pictures of old presidents. This idea is much older than Bitcoin.)
- trevelyan 9y ago
  > The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. It actually would deal with the issue that led to the GFC. Remember --- the problem wasn't that there were fraudulent mortgages -- it is that these mortgages were packaged and repackaged in ways that deliberately obscured the risk involved so that people were buying stuff that had no underlying value. The lack of transparency is what encouraged the fraud and created the incentives for it, which is why the behaviour only stopped when there was a 65% fall in the value of pretty much all mortgage-backed-securities. A mortgage CDO built on something like Ethereum would be programmatically transparent and anyone could look in real-time to see the value of their tranche. It would be trivial to distinguish between good and bad investments. And while there's still the potential for people to purchase things that do not have value, it becomes pretty much impossible for 2008 to happen again in a financial system run on crypto fintech -- intermediaries in the financial system would simply not be able to deliberately obscure transparency into which assets were owned and covered by which securities: if you wanted to check repayment rates you could script something to do the work in real-time by simply monitoring the blockchain.
  - whatok 9y ago
    Real-time (compared to equities) pricing as you know it does not exist in mortgages and would not be enabled by what you're describing. Transparency in something like this also does not help in the case of massive gaps downward in price which happened with a lot of these instruments and in fact would probably accelerate sell-offs. Transparency of the underlying was not the issue. Anyone investing in this stuff could have figured it out if they wanted to.
    - Certhas 9y ago
      In fact I believe the rating agencies that mis-rated the risk of these CDOs had full access to all this information anyways.
      - trevelyan 9y ago
        You're right that it was possible for people to consult the original (think, paper-based prospecti) in at least some cases, but most people relied on the ratings agencies and they claim to have essentially greenlit their ratings on what the Black–Scholes equation told them, using assumptions that were convenient but untrue (i.e. Gaussian cupola -- that defaults would not be correlated).
- Certhas 9y ago
  Bitcoin - Because the problem with global finance is too much regulation. It baffles me how seemingly capable people have had the idea that a cryptocurrency would counter 2008 style stuff. It seems like a reasoning short circuit: Big institutions failed us, so something without big institutions must be immune. The big institutions failed us exactly by allowing each other to do too much. By not regulating (which is by definition centrally imposed).
  - splintercell 9y ago
    > It baffles me how seemingly capable people have had the idea that a cryptocurrency would counter 2008 style stuff. It seems like a reasoning short circuit: Big institutions failed us, so something without big institutions must be immune. I think you misunderstood what people mean by saying "counter 2008 style stuff". The aim isn't to prevent 2008 from happening again, but if 2008 were to happen again, then be in a safe situation. Also you're taking the input from your opponents, but plugging that input into your own model, without realizing that bitcoin proponents do not share your model. Your model is: "Lack of regulation caused 2008 to happen", but not everybody agrees with that model. There are multiple models, but the most common model is that central bank inflating the money supply, and manipulating interest rates caused 2003-2007 to happen. 2008 was merely the well desired correction. Same model applied to today, it means that we are currently in a major bubble and this bubble will pop in the coming years. Alternate financial systems such as bitcoin and smart contracts, are 'customizable' enough (For lack of a better term) that they give people a fighting chance. 1. Capital controls can't be imposed 2. Bank accounts can't be confiscated 3. If regulations have to be bypassed to make trade happen, then they should be more easily bypassed (for instance minimum wage laws). So when the next crises happens, people are able to flee nations with their capital, their bank accounts will not be able to confiscated, and they will side step any regulation which screws people over. This is the aim of cryptocurrency proponents, irrespective of what is being said.
    - ska 9y ago
      There are multiple models, but the most common model is that central bank inflating the money supply, and manipulating interest rates caused 2003-2007 to happen. 2008 was merely the well desired correction Regardless of it's truth value, that is not clearly the most common model.
- peterjlee 9y ago
  It wasn't "The sort of activity which led to the financial crisis" that inspired bitcoin. After the crisis happened the US government funded the massive bailout by printing more money. It turned out to be a "good" decision since it prevented a catastrophic economic failure but it did cause more inflation and some people weren't happy that a government can just print more money on a whim. So that's how the bitcoin came about to make a currency where there are no central governing body that can just print more whenever it wants.
  - noddy1 9y ago
    The banks seem to have won the propaganda war about bailouts preventing economic collapse pretty well. I guess once the government makes the bailout and the banks accept the bailout, both parties are pretty committed to ensuring the public thinks that the bailouts were required. What we really got was a tacit approval for bankers that they could make highly leveraged bets in the 7 years that the markets were going up, make shitloads of money, feel like geniuses, and then when it all inevitably explodes the government would bail them out and then QE like crazy to pick up the pieces. The QE would be given not to citizens, but to banks to inflate equity markets, and start the whole cycle again. Now we have a whole new generation of financial "geniuses" overhyping every asset class, making shitloads of money off it all, thinking they are geniuses, and when it all collapses again they think the same thing will happen. It may do, but this time I don't have to be involved in that bullshit. My money is now unprintable. They can devalue the USD shitcoin all they want, but there are still only 21 million possible bitcoins and that's all I care about.
  - openasocket 9y ago
    The government didn't actually print any money, the central banks just acted as a "lender of last resort," which works just as well in Bitcoin as it does in cash.
    - deleted 9y ago
      [deleted]
    - noddy1 9y ago
      They printed $4+ trillion in the aftermath and gave it to banks.
- buckthundaz 9y ago
  You are correct that the activity that led to all financial crises will not be mitigated in the domain of national currencies. It will be avoided in decentralized money that is uncorrelated, like gold. Your concept of decentralization is off. The purpose of it is this: How many points of failure are there? How many of these points can break before the cards all fall? If this happens, who pays for it? This illustrates that the USD is not decentralized. Cryptocurrency is an exit from this, much like gold or real estate or other investment vehicles. Cryptocurrency is available to anyone with a phone and internet access -- that cannot be said for any other investment vehicle. This will take the wind out of the sails of financial institutions as there is another option for people.
  - shawn 9y ago
    Possibly, but the space requirements for crypto shouldn't be underestimated. I think Satoshi kept 1MB blocks because he realized it would quickly become untenable for most people to run full nodes. ETH has similar problems. What does the end game for this situation look like? Will people just create Bitcoin Zero, which is identical to Bitcoin but preallocates the existing coins starting from the genesis block? (A manual GC, as it were.) Otherwise it seems like crypto will be around 100 years from now, but probably not BTC. At least not in a form where non-miners can participate.
  - jhwang5 9y ago
    Switching to cryptocurrency actually makes the problems worse, because instead of regulated entities calling the shots, we have an oligarchy of ASIC-armed miners calling the shots. Between the two evils, any sane person would rather trust a regulated business than some folks who prefer to hide in the shadows.
- roadbeats 9y ago
  Bullshit. Have you ever done wire transfer ? Every SWIFT transaction goes through US. Let’s say you want to transfer USD from one Vietnamase bank to another Vietnamase bank; even local USD transfers has to go through US and people get charged a lot for that. Just for transferring 25k USD between two local banks, I got charged $150. It’s ridiculous to claim “USD is decentralized” in a world where developing countries can not even trade with eachother without paying US a cut.
sharemywin 9y ago
It may have been meant as a joke but it has a purpose. but it's become a base market in several exchanges.
- nwah1 9y ago
  Then those exchanges have no purpose.
  - Bromskloss 9y ago
    And whoever uses those exchanges has no purpose, and so on, until no one has any purpose.
    - nwah1 9y ago
      A giant rube goldberg apparatus built around a worthless central premise is just as worthless as the central premise itself.
  - xenihn 9y ago
    They do serve a purpose -- pumping and dumping dead coins that can't actually be withdrawn from the exchange. I didn't do my research and sunk about $100 into one. I'm technically up $20 on it (if converting to ETH/BTC, which I can't actually do because there's too many other sell orders at the exact same price necessary for me and others to make a profit ahead), but would be down as soon as I converted it to doge and paid the transaction and withdrawal fees.
- mkirklions 9y ago
  Uh? What exchanges? I've never seen a DOGE to anything. Right now, BTC is the most popular. ETH is second most popular. I know some exchanges support monero, but those are very limited in what can be converted.
  - shakestheclown 9y ago
    Mercatox has XRB/DOGE which has a whopping $9k 24hr volume.
gourou 9y ago
Key take-away: > Once the cryptocurrency price bubble pops and takes all the hype with it, will the community be able to recover the energy it needs to build real, innovative technology once again?
- mkirklions 9y ago
  Yeah because most people are putting fun money into the alt-coins. As long as people bought bitcoin and ethereum, they probably will end up positive. The people that are riding on 3 month old coins like IOTA or TRON will lose. Those risking everything on the future of Ripple or BCH or 1-2 specific coins will lose. Those that diversify impartially will come out major winners.
  - simias 9y ago
    Speculation is worthless because unlike bitcoin it seems to be infinite supply. Tell me that you're able to predict what the cryptocurrency scene will look like 1 year from now and I'll call you a fool. Your thought process to reach that conclusion might prove more insightful however. So far it seems that cryptocurrencies move alongside each other for the most part, when the big ones go up the smaller follow. If you diversify in crypto and everything crashes at the same time how do you win? How does one diversify "impartially"? What if it turns out that in the end only IOTA remains? For all the talk about real use cases and replacing fiat cryptocurrencies are 99% speculation and get-rich-quick schemes nowadays. It seems we still have some wild times ahead of us before it settles one way or an other.
    - dahdum 9y ago
      They rise and fall mostly with Bitcoin, Ethereum has shown recently to be more independent, but the biggest drops are usually spurred by panic about crypto regulation. Regarding 2018, I'm your fool...here are my predictions: Bitcoin will remain top market cap and crypto numeraire. Majority of the newest projects like IOTA, Tron, etc. will be down significantly. Burned by vaporware projects, investors will become more cautious about "new" ICOs and enormous token issuances. None will rise as quickly as TRON, EOS, and others did. Ethereum will remain #2 but at least once will have had a great run against Bitcoin, hitting 80% of bitcoins market cap. Overall crypto market cap will rise 200%-300%. Ethereum will continue to have most transactions, enterprise, and developer support. Could change in 2019 and beyond, but has a huge lead right now. Ripple will crash further, but the platform will gain real world usage. BAT will rise and support becoming common on enthusiast sites, like tipjar services. Most of the smart contract chains in development will make no real progress, but I expect at least one "ethereum killer" to become a reasonable alternative. Disclosure: I own Ethereum and Bitcoin, would buy some others but maxed out on my crypto exposure.
Bromskloss 9y ago
https://www.youtube.com/watch?v=000al7ru3ms https://www.youtube.com/watch?v=000al7ru3ms
throwaway30yo 9y ago
DOGE is a pretty good currency to use for moving money between exchanges. That is why its used. If BTC had low/no transaction fees and was fast, people would have less incentive to use DOGE. Overvalued? Its possible but I think the entire crypto market is actually insanely undervalued. I was talking to my financial advisor the other day and he said pretty much 100% of people now are asking him about crypto and are considering putting money in. This seems like it is just the start. The figure for the .com crash was around a 7 trillion dollar market cap. Crypto is 0.7 trillion today and its more of an international market then the .com days. Easily cypto could 10x in size over the next year or two. In the end its super high risk speculation. You can figure the entire market is overvalued but there is no doubt that there is money to be made in several sub-sectors of the crypto market.
- sremani 9y ago
  Minting new coin is not difficult, there is CrptoNote project on Github you can fork and in matter of minutes you can have your own "Coin" and start mining on couple of old Linux boxes. I understand the network and traction, but this is not very different from each bank having its own currency notes back in the day (1800s?). The biggest problem is they are not stable enough to be currencies their volatility makes them more like commodity/asset and their Transaction speed does not make them huge transaction payment systems. They fail at both promises when they gain traction, of course, there will be ultimate winners in this space. Instead of calling them Cryptocurrencies, calling them DLT (distributed ledger tech) is more appropriate for most the coins anyway.
  - lmm 9y ago
    I'd trust Doge more than most cryptocurrencies, honestly. It's relatively established, the community doesn't or at least didn't take itself too seriously (sounds like that may now have changed), and it took the (admittedly mostly symbolic) decision to allow "mining" to continue indefinitely, ensuring there will always be a Doge supply rather than passing all gains to the early adopters. In a sense it's a lot more functional than Bitcoin - people use it for "microtransactions" and "tipping" that would be impossible with Bitcoin's transaction fees.
down 9y ago
That something wrong with fiat, in my country all political parties battle for control of the national bank that issues money, why, well there are stories of powerful political leaders, kicking the door and just asking for money.
perseusprime11 9y ago
Just wait for Wall Street to start building complex derivative products that will be used as a vehicle for these cryptocurrencies and all of a sudden the bubble will reach epic proportions.
saosebastiao 9y ago
The problem is the use of market cap as a valuation metric. It is absurd to think that your joke cryptocurrency is actually worth $2B just because one person was willing to trade at a price that implies $2B. To show the absurdity, consider the people who buy used cooking oil from restaurants to turn into biodiesel for their modified 1975 mercedes 300D. They might pay $2/gallon for that used cooking oil. Would it be reasonable to assume that the market size of used cooking oil is now $2 * (Gallons of used cooking oil produced yearly)? No, that's absurd. Someone paid a high price for it, that doesn't mean everybody did or will.
- josu 9y ago
  As of now Dogecoin has a 24hour volume of 58M US dollars. This is not just one person, this is a market consensus on the value of each coin.
  - saosebastiao 9y ago
    And what if 90% of that market consensus is really just 10 different high frequency traders battling for top market making position, with the occasional humdrum buying to "diversify"? The market depth says a lot more about a currency's value than the market price or even volume does. It's not something that can be summed up into a tidy single number, though. Which means people don't talk about it when when writing glorified blog posts.
    - sharemywin 9y ago
      https://bitinfocharts.com/top-100-richest-dogecoin-addresses.html https://bitinfocharts.com/top-100-richest-dogecoin-addresses...
      - gruez 9y ago
        how's that useful? a wallet can have multiple addresses, and an address can belong to multiple wallets (on web wallets or exchange accounts).
    - 9y ago
madeuptempacct 9y ago
Where do you sell your dogies?
- sharemywin 9y ago
  https://coinmarketcap.com/currencies/dogecoin/#markets https://coinmarketcap.com/currencies/dogecoin/#markets
wuliwong 9y ago
I think that this article has too many anecdotal references to scams and profiteers but there isn't any sense of the statistics or scale. Without knowing if people are behaving worse on average in the crypto world or the fiat world, I don't find them very helpful. My anecdotal experience has been really wonderful in crypto. I've become part of a really nice online community where people are eager to share ideas and help each other out. I've also found the crypto market to be far more approachable than traditional investments for myself. But who knows, maybe I just have been lucky?
roymurdock 9y ago
Crypto allows people to do 2 very important and useful things: 1) Move money around government currency controls (for a small fee) 2) Invest and speculate on potentially valuable assets. Sure you can't live in, eat, or drive a Bitcoin, but finance/trading is all about creating and betting on abstractions, and virtual currencies are the ultimate abstraction. Crypto is especially attractive given the current easy money low volatility environment) I am similar to the author in that I was very excited about blockchain and its implications in 2013/2014 and had recently become very disillusioned with how adoption played out in the real world. I think it's time to move past this disillusionment and face reality instead of continuously being angry at how nonsensical a lot of this is, no matter how "useful" we really think these 2 current uses of cryptocurrency are. The reality is that we are living in a world (in the US at least) we trust traditional institutions/knowledge to be able to provide common goods and help us raise our standard of living less and less. What do we want to do about that? Getting mad/worried about cryptocurrency speculation is not the answer.
- sharemywin 9y ago
  wonder where we are in the hype cycle: https://www.gartner.com/technology/research/methodologies/hype-cycle.jsp https://www.gartner.com/technology/research/methodologies/hy...
  - kleer001 9y ago
    I think we're on the 5th or 6th one with two more to go in the next ten to twenty years as crypto chews through networks of people at different distances from expertise in bitcoin. Also follow along with the classic stock bubble: https://blogs-images.forbes.com/jessecolombo/files/2014/02/stages_bubble.png https://blogs-images.forbes.com/jessecolombo/files/2014/02/s... These curves remind me of the dopamine response curve to tasks like in a rat running a maze: https://neurofantastic.com/brain/2017/1/12/dopamine-crescendo-marks-the-path-to-reward https://neurofantastic.com/brain/2017/1/12/dopamine-crescend... But maybe that's pareidolia.
  - Robotbeat 9y ago
    I think we're at the peak of inflated expectations.
dustingetz 9y ago
A copy/paste from /u/palmerstoned on reddit on 2018 Jan 7. What do you guys think? /u/palmerstoned: There is no fucking limit on how high this can go (compared to traditional stocks where there actually is a limit due to economic indicators like P/E ratio's). When someone says it's overvalued or undervalued, they are automatically wrong because we have not found any method yet to actually value crypto's, unless you compare the value between crypto's. The nominal value of derivatives in the world is estimated at 1.2 quadrillion (probably a gross overstatement and a bad comparison but a man can dream). Let that sink in for a moment. /u/palmerstoned: We are still far away from large investment bank ETF's where they actually buy Bitcoins or Ethereum. But it will come, they will never let all this money lying around. The problem right now is that exchanges aren't safe enough yet to be buying Bitcoins by the millions. UI interfaces for wallets are way tooo complex for the average Wall Street trading desk. But this will change, eventually. (definitely keep an eye out for investment opportunities in this niche market). Goldman Sachs has already announced they will put up a trading desk by the summer. Things are about to get a lot more crazy!
- mr_spothawk 9y ago
  love it. wonder why it’s so contrary
wyldfire 9y ago
Dogecoin is kinda like a control/placebo for real cryptocoins. And the fact that it exploded without providing real distinct utility apart from existing coins is an indication that something is indeed wrong.
- HuggableSquare 9y ago
  Originally it was pretty much just a fork of Litecoin, but since then Dogecoin has considered the economic viability of it as a real currency. It's one of the few inflationary cryptocurrencies, it has a block every minute which is good for confirmation times, the transaction fees are very low, AuxPoW has given it a huge network of miners keeping the network alive, and the core devs have kept the stability of the network above all else which includes not adding every new feature that all the other altcoins love.
  - meesterdude 9y ago
    > which includes not adding every new feature that all the other altcoins love. Or indeed making any changes at all! The github repo hasn't been touched in over 2 years
    - HuggableSquare 9y ago
      Here's a reply I posted elsewhere in the thread about this: Although there hasn't been a release in two years they're currently working on releasing 1.14 this year. In case you're interested the core devs have been doing a pretty good job on keeping people informed on the status of the release on the subreddit. Latest post here: https://www.reddit.com/r/dogecoin/comments/7oxi53/developer_brain_dump_incoming/ https://www.reddit.com/r/dogecoin/comments/7oxi53/developer_... Also, there has been lots of updates to the github repo, just look at the 1.14-dev branch instead of master.
- Balgair 9y ago
  I love this and am going to steal the phrasing. Doge is an absurdity. Like "Cards Against Humanity" or the "C'est non un Pipe" paintings. That it can be considered to be 'legit' or anything else is fantasy. Anyone that is investing in Doge is a fool. Unfortunately, there are just too many damn fools.
mrb 9y ago
«Once the cryptocurrency price bubble pops and takes all the hype with it, will the community be able to recover the energy it needs to build real, innovative technology once again?» Of course it will recover. Blockchain technologies are so transformational that you need a lot more than a simple price crash to kill cryptocurrencies. Of all persons, the creator of a cryptocurrency (even a joke one) should understand this. In fact, people always seem to forget that Bitcoin (actually the crypto market at large) has already experienced 4-5 major crashes in the last 8 years where prices lost between 50% or 95%(!), sometimes remaining depressed for months, but the market has always recovered.
- AlexandrB 9y ago
  > Of course it will recover. Blockchain technologies are so transformational that you need a lot more than a simple price crash to kill cryptocurrencies. Are they transformation? I have yet to see a blockchain application that's not done more cheaply with a traditional database. Most of the practical uses of blockchain are as effectively centralized "distributed" databases (e.g. corporate blockchains), while the rest are cryptocurrencies and other distributed ledgers that are, at the moment, extremely volatile.
  - mrb 9y ago
    A blockchain-based cryptocurrency has 3 central qualities: decentralized, permissionless, irreversible transfers. That's what makes it transformational. No other currency or system can provide these 3 properties (except physically exchanging a commodity, eg. exchanging gold in the real world.) You claim most cryptocurrencies are "effectively centralized", but that is false. For example if I make a Bitcoin transfer by broadcasting it to the P2P network (ie. assuming it reaches most miners), no single entity can block the transaction, thanks do decentralization (ie. many disparate miners around the world attempting to include the txn in their block.)
    - deleted 9y ago
      [deleted]
beeskneecaps 9y ago
Jackson just mad because he sold instead of hodl
mr_spothawk 9y ago
by my reading, Author thinks we're all better off when we're protected from our irrationality by regulatory entities keeping us from doing stupid shit with our money. i think the run on DOGE is about how much easier it is to move DOGE between exchanges. i could care less about pump&dumps... that type of behavior will naturally stop if we leave ourselves to discover the risks. if we use a regulatory mechanism to prevent folks from engaging in that type of behavior, we may very well prevent speculation, but we won't teach anybody anything. i think it's smarter, on the whole, to let the crazy crypto churn continue, and see where it takes us, than it is to disenfranchise all kinds of folks from learning about markets/currency/etc... by regulating them away from it.
amatecha 9y ago
Pretty happy with the DOGE bubble since I've traded out a couple thousand already for other coins... thumbs up But, yeah, I'd wager that eventually the bubble will burst and there will be few remaining cryptocurrencies that hold their value, IMO.
ojr 9y ago
The founder who was given the title as "inventor" in this article is not the inventor. He did not mention the developer who help do the C++ source code and actually invent Dogecoin. I would call my cryptocurrency a joke too probably if I saw the price rise exponentially and didn't put the work to make it a viable blockchain. It is easy to criticize from an armchair.
- djsumdog 9y ago
  It was a fork of Litecoin (I think?), so yea, someone had to fork it, rebrand everything and publish all the apps. (All the bitcoin derivatives from like 2012-2014 looked exactly the same .. same Android/QT apps .. minor differences and rebranding here and there. The big differences were usually the crypto algorithms and hashing variations...) But really, your comment goes to something more fundamental in how we look at inventors and Captains of a ship. Zuckerburge early code leaks of Facebook show it was some pretty terrible PHP, yet we attribute everything to him instead of the hundreds of engineers that made things like Hiphop, Hack, React, etc. etc. Bill Gates was not a good developer. A lot of his early success projects were license purchases and rebrands and not trying to get fucked by IBM. Don't even get me started on the cult of Steve Jobs. People like to see a Captain of a ship. People like Karl Marx saw those workers rowing the ores. Even people with the nicer more high paying jobs like navigators, sill made a fraction compared to the captain, but it was enough they felt better than the stack below them. Orwell agreed, but contested that even if the crew men revolt and take control to give everyone a better and more equal share, eventually over time, some people will convince everyone on the boat they should be at the top, and enough people would follow and you'd be back to where you were. But yes, we always need to have an "Inventor" .. a Tesla or Musk or Ford; the leader of a ship, ignoring the thousands of people that made it happen.
Jonovono 9y ago
Anyone remember when Dogecoin raised money for the Jamaican bobslead team. https://www.theguardian.com/technology/2014/jan/20/jamaican-bobsled-team-raises-dogecoin-winter-olympics https://www.theguardian.com/technology/2014/jan/20/jamaican-...
leoc 9y ago
https://www.reddit.com/r/dogecoin/comments/7oxi53/developer_brain_dump_incoming/ https://www.reddit.com/r/dogecoin/comments/7oxi53/developer_... , from one of the current Dogecoin devs: > I feel some are using our rise to illustrate the absurdity of cryptocurrency pricing (http://uk.businessinsider.com/dogecoin-cryptocurrency-has-ma.. http://uk.businessinsider.com/dogecoin-cryptocurrency-has-ma.... for example). To me, in an environment where a cryptoasset with $30 USD equivalent transaction fees has a market cap of over a quarter of trillion dollars, I don't think we're the absurd one. Yes we take ourselves less seriously, but that doesn't mean we're not serious behind the scenes. We're a 4 year old currency with transaction fees barely over a cent and significantly higher throughput than most other cryptocurrencies. (Disclaimer: I know him personally.)
pbkhrv 9y ago
> "In many ways, 2017 marked the year that cryptocurrency stopped being about technologically innovative peer-to-peer cash and instead essentially became a new, unregulated penny stock market." I don't think it stopped being about tech innovation - there is a ton of stuff happening around proof-of-stake, layer 2 networks, state channels etc. It's just that the stories around the speculative aspects of the cryptocurrency assets have been dominating in 2017.
Tommah 9y ago
At this point, if you put Dogecoin and Bitcoin next to each other, Bitcoin looks like the joke. It's slow, the fees are too high, and its developers won't address these problems.
- statoshi 9y ago
  Sounds like you're looking at the wrong metrics. Dogecoin had 0 commits to its main repository in 2017. Compare that to 3,277 commits to Bitcoin Core alone. Bitcoin has scaling issues that developers are addressing with second layer networks because tons of people are using Bitcoin. Dogecoin doesn't because it has so few users that the demand for block space is well below the available supply.
  - nicky0 9y ago
    The story those numbers tell me is that Dogecoin is already working well enough that it didn't need updating. Whereas Bitcoin developers are scrabbling hard to fix the sinking ship.
  - stordoff 9y ago
    I don't think commit numbers alone tell you the full story either (e.g. FLAC going years between releases, not because it's abandoned but because it's basically done). The 1.14-dev branch seems active enough anyway: https://github.com/dogecoin/dogecoin/tree/1.14-dev https://github.com/dogecoin/dogecoin/tree/1.14-dev
  - beokop 9y ago
    How is the “new world currency” being updated ~10 times a day reassuring at all? All it takes is one serious bug to wipe out $240bn of wealth.
skyisblue 9y ago
Wasn’t Dodgecoin created to be an indicator of how much of a bubble the market is?
orf 9y ago
"The guy who ruined DogeCoin" is also an interesting read[1]. Things didn't turn out so well for him[2] 1. https://motherboard.vice.com/en_us/article/78xqxb/the-guy-who-ruined-dogecoin https://motherboard.vice.com/en_us/article/78xqxb/the-guy-wh... 2. https://news.bitcoin.com/ryan-kennedy-rapist/ https://news.bitcoin.com/ryan-kennedy-rapist/

269 points by thisisit 9y ago

>"To deliver a peer-to-peer alternative to cash that, through decentralization, did away with the need for trust in financial institutions, which the 2008 crisis showed to be unscrupulous, and often corrupt." The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. Decentralization would not do away with the need for financial institutions (or the toxic incentives that can drive them and the ecosystem in which they exist). The USD is pretty decentralized already. Sure the money supply itself is centralized, but the USD is a functioning currency because all people who accept and deal in dollars accept the fact that the dollar is a currency. We're all decentralized nodes in the Fiat network.

ummjackson 9y ago
(author here) I agree! I was calling out Bitcoin's initial goals in the article but don't 100% align with them myself. Financial institutions came to exist for a reason and I'm really not on board with everyone "being their own bank" as I feel it'd be a step backwards from what we have today. What I do agree with is the need for more audit-able, accountable systems so the institutions we trust are less susceptible to corruption.
- lumberjack 9y ago
  Are you sure that was Bitcoin's initial goal? Or just speculation from early adopters? In the actual white paper, Satoshi does not mention any of this, although like you, I do remember these motivations being used very early on. I don't know their origin, but Satoshi simply talks about non reversible transactions, in the context of payments over the Internet.
  - SippinLean 9y ago
    Satoshi did mention it elsewhere: >The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible. http://satoshi.nakamotoinstitute.org/posts/p2pfoundation/1/#selection-33.0-33.538 http://satoshi.nakamotoinstitute.org/posts/p2pfoundation/1/#... Even the whitepaper has a bit about the weaknesses in financial institutions in the intro: https://bitcoin.org/bitcoin.pdf https://bitcoin.org/bitcoin.pdf
    - ummjackson 9y ago
      + the genesis block included the text "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" (Source: https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block)
    - Robotbeat 9y ago
      What's really fantastic, though, is that cryptocurrencies are currently in a large bubble themselves. Privacy of the exchanges is no better as you literally have to send them a picture of your ID. And several exchanges have been hacked with the money stolen. So far, I'd say cryptocurrencies (for the average joe/jane) are WORSE than regular banks. And, on the last point about micropayments, well Bitcoin now has such massive transaction fees and massive overhead that micropayments are even more impossible (without adding more layers). The ideological/theoretical purity of cryptocurrencies is completely negated by using exchanges and by the perverse incentives of proof of work leading to enormous returns to scale for those who have developed custom ASICs. Decentralization requires more effort than centralization, but something that requires effort doesn't generally grow very fast... And so we've centralized cryptocurrencies in a haphazard way, making them a lot easier for people to use--thus enabling cryptocurrencies to grow very fast--but also negating all the theoretical benefits. Something useful will eventually come out of the current mess (and there are various initiatives that help address many of these flaws), but probably not before the Zeitgeist becomes disillusioned with cryptocurrencies.
- meri_dian 9y ago
  Hey! I definitely agree that accountability is important. How do we improve accountability though? I'm skeptical about bitcoin or any other cryptocurrency doing so. From what I know about the financial crisis, it wasn't the nature of fiat currencies that led to the crisis, but rather the complexity of financial instruments obscuring the weakness of underlying mortgage assets combined with incentives driving industry players that turned out to be toxic in the long term. It doesn't seem to me that a distributed currency will eliminate financial complexity or perverse incentives. But as an aside, I remember laughing about Dogecoin with friends back in 2014 when we first discovered it. It must feel awesome to have created something people around the world know about.
  - ric2b 9y ago
    > From what I know about the financial crisis, it wasn't the nature of fiat currencies that led to the crisis, but rather the complexity of financial instruments obscuring the weakness of underlying mortgage assets combined with incentives driving industry players that turned out to be toxic in the long term. Bitcoin wouldn't prevent the mortgage fraud, it would prevent the immoral bailouts that happened after that and that told the industry "don't worry, you're too big to fail, feel free to try harder next time".
- otakucode 9y ago
  They did come to exist for a reason: geography. Primarily, they served as a way to deposit money in one physical location and withdraw it at a different one at a different time. In the modern era, more and more of the economy as a whole flows through these institutions who do nothing more than shuffle numbers down a network link - and yet they charge a percentage cut of the transaction. It costs no more to transmit a larger number, yet they see fit to take more and more depending upon its size. Payment processors are taxing bodies. Mostly unregulated and entirely non-governmental bodies that have as much, if not more, control over the supply of money in the economy than the Federal Reserve. If the Federal Reserve sought to increase the supply of money in the economy, but the payment processors disagreed, who would (or even could) stop them from raising their rates for payment processing to directly counteract the actions of the Fed? No one. They could do it, and they will do it eventually. How anyone could be comfortable with middlemen who provide nothing of significant value sitting in on almost every single transaction which occurs in the entire economy and skimming off the top I have no idea.
  - semanticist 9y ago
    > who would The financial services regulator in the appropriate country. In the UK that's mostly the FCA, in the US it's apparently the guys listed here: https://en.wikipedia.org/wiki/List_of_financial_regulatory_authorities_by_country#U-Z https://en.wikipedia.org/wiki/List_of_financial_regulatory_a... > (or even could) stop them from raising their rates for payment processing Using financial services regulation. It's not like they're immune to laws. Your argument is for more regulation, not a deregulated cryptocurrency.
  - Jesus_Jones 9y ago
    But also those large bodies provide a certain amount of safety when transferring money, so you can see where it went or if a transfer got lost. That's not true with crypto always, people are on their own. There are endless stories of big banks screwing customers over, often because of uncaring bureaucracy, but I do believe a giant bank will set things right, even if I had to complain - I've never had a problem really, but I have heard of people who do, and don't forget Wells Fargo.
- cornyNetHandle 9y ago
  What I never understood with the blockchain is the idea that it would change the politics of finance in favour of the little guy. As far as I can tell, financial institutions are exceedingly well practiced at co-opting new monetary systems, as they have been doing exactly that for a very long time, so I never thought that a new model of ledger was ever going to really faze them.
  - Certhas 9y ago
    It should be a bonanza for them. Unregulated market. Every trade/contract they want.
    - deleted 9y ago
      [deleted]
    - Demiurge 9y ago
      I don't think anyone wants unregulated markets for everyone, just like no one really wants anarchy. There are criminal, or rebellious elements in every group, but co-beneficial arbitrage is what we've evolved to.
      - cornyNetHandle 9y ago
        Do you mean anomie? I know a few Kropotkin fans who are fairly certain that they want anarchy.
  - ummjackson 9y ago
    Absolutely, and that's what is happening right now. I honestly don't have a solution for this problem... other than trying to make it as least appealing to these institutions are possible.
    - cornyNetHandle 9y ago
      The only 'solution' I can see to this problem, is to develop an alternative to the floating monetary unit, of solving the calculation of exchanging goods and labour. Money is useful, because it solves for the 'n' of a given trade by using all the pricing of transactions as a form of parallel computation, so the fact that it may often give sub-optimal results is outweighed by the fact that it has such a low overhead, compared to the traditional alternatives, such as planned resource based economies, which have historically been plagued by both sub-optimal results and a very high overhead. The revolutionary work in economics isn't being done on the blockchain, or in any other new currencies for that matter. It is being done in the world of AI and big-data, when applied to logistics. If you really want to revolutionise money, you have to try and make it obsolete. edit: Also, seeking sources of funding may be problematic for such an enterprise - "Please can you invest in this plan to destroy capitalism." - being a particularly difficult sell. Perhaps if it can be reframed as - "Please can you invest in this plan to destroy capitalism that also has excellent quarterly returns." - then it might get somewhere.
- frik 9y ago
  Related to joke DogeCoin: One of the US crypto exchanges "Kraken" went dodo. It has been offline for more than 30 hours without prior notice. Maybe another joke, or MtGox -.- https://news.ycombinator.com/item?id=16131750 https://news.ycombinator.com/item?id=16131750 ***MAINTENANCE ANNOUNCEMENT*** Kraken is presently offline for maintenance. While maintenance is underway, the website and API will not be reachable, and orders will not be able to be placed or canceled. The Kraken Team https://www.kraken.com https://www.kraken.com - a former(?) major US crypto exchange
- wellboy 9y ago
  Also in yhe case of the dozens of countries with incredible inflation, Venezuela, African countries?
mkirklions 9y ago
>The USD is pretty decentralized already People are insane. Fiat currency is the definition of centralized currency
- lukasm 9y ago
  It really depends what you mean by that. If you compare it to currency in a game which can be removed with a bug that sets a few bits then USD it's quite decentralized in some respects.
- abakker 9y ago
  Please define what you mean by Centralized and Decentralized. I believe you and the OP are talking at cross purposes. the USD is decentralized in that P2P transactions are accepted with almost anyone in the world without needing a centralized intermediary.
  - meri_dian 9y ago
    Exactly. I'm realizing now that we need to be much more precise when we talk about centralization of currencies to have meaningful discussion.
  - JumpCrisscross 9y ago
    > P2P transactions are accepted with almost anyone in the world For a startling Exhibit A, consider that North Korea [1] and Iran [2] hold and transact with large quantities of U.S. dollars (in physical cash) despite American sanctions. [1] http://www.cnn.com/2017/10/16/asia/hong-kong-north-korea/index.html http://www.cnn.com/2017/10/16/asia/hong-kong-north-korea/ind... [2] https://www.wsj.com/articles/a-tally-of-iran-sanctions-relief-includes-more-than-10-billion-in-cash-gold-1483112751 https://www.wsj.com/articles/a-tally-of-iran-sanctions-relie...
  - komali2 9y ago
    Is it centralized in the sense that a single organism can exert more control than anyone else on the real value of the USD by printing more?
jzoch 9y ago
The USD is one of the most centralized currencies in the world. Just because everyone has some does not mean its decentralized. It is still minted and distributed through centralized silos owned by the government, and policy enacted by the government ON the currency is still effective.
- md2be 9y ago
  And it’s the reason why we have such an incredible economy.
- macawfish 9y ago
  That comment was a reference to the fact that money itself operates on belief systems and motivations that are distributed and decentralized
- JumpCrisscross 9y ago
  > it is still minted and distributed through centralized silos owned by the government Money can be created by privately-owned banks, which adds a significant decentralized element to the mix. Cash settlement is also, if done physically, a totally de-centralised transaction mode.
- erispoe 9y ago
  In modern systems money can be created by banks lending money. That's an interesting property as money creation is tied to the course of the economy. However, this can lead to inflation if the amount of money created actually exceeds the growth in economic activity. In the gold standard model where the amount of money is completely uncorrelated with economic activity, you have inherent deflation. Deflation is a serious threat, as it pushed people to hold onto their currency (as the real value automatically rises) instead of spending or investing it. Bitcoin is really a digital gold standard. There is no way that a gold standard currency can support a growing economy efficiently.
  - throwawayjava 9y ago
    > completely uncorrelated with economic activity It's always surprising to me when (not-already-on-the-top-f-the-world) software types see virtue in gold standards. The fact that our work -- moving bits around -- produces so much economic value is an epitome of everything that's wrong with a gold standard.
tribune 9y ago
The point of cryptocurrencies is to rediscover everything we already know about money, the hard way
- abakker 9y ago
  That is certainly Matt Levine's take, as well. It is kind of funny, actually. Engineers rediscovering by doing, and wall street having these existential self-doubts about whether there is some hidden sophistication which is entirely absent.
- Mtinie 9y ago
  On the surface that can be a beneficial exercise. 400+ years of financial dogma and cruft has accumulated in the world's financial system(s). If the sole eventuality of this period of cryptocurrency development is that some of the "sacred cows" stood up in the four centuries since are torn down, and outdated models are discovered and updated to better serve people of today, I consider it worthwhile progress.
  - Sangermaine 9y ago
    Except that's not what's happening. What's happening is that some people are relearning the hard way why those "sacred cows" are so sacred. We've become so used to having them that some people take them for granted and forget why they exist, like the "raw water" people forgetting why municipal water systems exist. e.g. "Why do we need all these regulations anyway? It's just statist slavery!" later "Ah right, the fraud and the scams."
nerdponx 9y ago
FWIW, there's a plausible argument to be made that the 2008 crisis was aided (although not fundamentally caused) by excessively loose monetary policy in the mid/early-2000s, followed by sharp tightening. That isn't to say the mortgage industry wasn't propped up on fraud, etc. But it wasn't irrelevant.
- UncleEntity 9y ago
  Well, Austrian Business Cycle Theory claims that it was indeed fundamentally caused by excessively loose monetary policy. As to plausibility, I guess that depends on your personal views.
creeble 9y ago
>”The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency.” Indeed, the ‘sort of activity’ which led to crisi is simply called greed. As far as I can tell, crypto currencies have simply become new fuel for greed thus far, and the result will likely be the same. A cure for centralized currency != a cure for greed.
andrewla 9y ago
> The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. I can't speak for every ideological bitcoin supporter, but you and I may differ on what constituted the "crisis". I agree that it would not deal with the activity which led to the financial crisis. But to many, the crisis was not that the banks all failed, but that they were not allowed to fail, and were bailed out instead. The genesis block doesn't say anything about addressing irresponsible behavior on the part of the banks. It says "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" People can do stupid and irresponsible things, and they can do stupid things with other people's money, but they have to bear the consequences.
- stanleydrew 9y ago
  I'm not sure what your point is. If all banks switched from dollars to Bitcoin, they could still be bailed out.
  - andrewla 9y ago
    Sure, if the government in question has the funds on hand or can borrow them. But they can't just literally increase the number of Bitcoin by a factor of 5 [1] in order to give trillions of dollars to people who have demonstrated their incompetence at handling that money. [1] https://fred.stlouisfed.org/series/BASE https://fred.stlouisfed.org/series/BASE
    - paulmd 9y ago
      > But they can't just literally increase the number of Bitcoin by a factor of 5 [1] in order to give trillions of dollars to people who have demonstrated their incompetence at handling that money. Sure you can. It's code, why wouldn't you be able to change it? There is no reason that cryptocurrency has to be inherently deflationary, rewards can easily be issued at a constant rate or any other rate. You are mixing up Bitcoin, the libertarian implementation, with the abstract cryptocurrency in general. This is an implementation detail. In fact, there is actually already a rather storied history of centralized interventions to bail out failing institutions. See: the DAO hack and the subsequent rollback... Could Vitalik just as easily have said "JP Morgan now has +5 million Eth?" Absolutely. Nobody else necessarily needs to accept that version of the blockchain (see: Ethereum Classic) but there is a network effect here: if everyone else agrees to accept that version of history then sucks to be you, everyone wants to deal with Eth not PaulCoins. And people tend not to be willing to accept calamity when offered an alternative. Ethereum Classic is the version of history which best upholds those high-minded libertarian ideals, but it's also the version of history where a single attacker has 15% of all the ether.
wuliwong 9y ago
I disagree, I think that the federal reserve's artificially low interest rates and essentially unlimited supply of money for the banks to loan out at these interest rates were at the heart of the most recent financial crisis in the US. A decentralized currency would certainly mitigate that.
- soVeryTired 9y ago
  What exactly do you mean by 'artificially low'? All short term rates are just a function of central bank policy. The bank will raise or lower rates in an attempt to control inflation (and any other mandate). 'Abnormal' I'd grant you, but not artificial.
  - joyeuse6701 9y ago
    artificial as in not 'natural' and natural as in set by market forces, which a central bank setting a short term rate is not a 'natural' market force.
    - soVeryTired 9y ago
      It's been a long time since short rates were set by market forces. And the financial system wasn't particularly stable then either.
- un_montagnard 9y ago
  No. The heart of the crisis is people believing they can easily make money by investing in a product they don't understand. I can sell a CDO on CDS in Bitcoin, and make a lot of money while the buyers are all getting screwed. And they will be even more screwed as nobody will print cash to cover or limit their losses.
  - stale2002 9y ago
    The people who invested in CDOs SHOULD get screwed. The rest of us who weren't stupid enough to do that shouldn't be forced to cover their losses. That's the point.
xorcist 9y ago
> The USD is pretty decentralized already. The decentralized aspect of using dollars in cash form(!), is something I would rather call permissionless. And that is exactly what Bitcoin set out to approximate for the Internet age. (Indeed the "cash" reference in the whitepaper title refers to fungibility and permissionlessness, not tangibility or pictures of old presidents. This idea is much older than Bitcoin.)
trevelyan 9y ago
> The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. It actually would deal with the issue that led to the GFC. Remember --- the problem wasn't that there were fraudulent mortgages -- it is that these mortgages were packaged and repackaged in ways that deliberately obscured the risk involved so that people were buying stuff that had no underlying value. The lack of transparency is what encouraged the fraud and created the incentives for it, which is why the behaviour only stopped when there was a 65% fall in the value of pretty much all mortgage-backed-securities. A mortgage CDO built on something like Ethereum would be programmatically transparent and anyone could look in real-time to see the value of their tranche. It would be trivial to distinguish between good and bad investments. And while there's still the potential for people to purchase things that do not have value, it becomes pretty much impossible for 2008 to happen again in a financial system run on crypto fintech -- intermediaries in the financial system would simply not be able to deliberately obscure transparency into which assets were owned and covered by which securities: if you wanted to check repayment rates you could script something to do the work in real-time by simply monitoring the blockchain.
- whatok 9y ago
  Real-time (compared to equities) pricing as you know it does not exist in mortgages and would not be enabled by what you're describing. Transparency in something like this also does not help in the case of massive gaps downward in price which happened with a lot of these instruments and in fact would probably accelerate sell-offs. Transparency of the underlying was not the issue. Anyone investing in this stuff could have figured it out if they wanted to.
  - Certhas 9y ago
    In fact I believe the rating agencies that mis-rated the risk of these CDOs had full access to all this information anyways.
    - trevelyan 9y ago
      You're right that it was possible for people to consult the original (think, paper-based prospecti) in at least some cases, but most people relied on the ratings agencies and they claim to have essentially greenlit their ratings on what the Black–Scholes equation told them, using assumptions that were convenient but untrue (i.e. Gaussian cupola -- that defaults would not be correlated).
Certhas 9y ago
Bitcoin - Because the problem with global finance is too much regulation. It baffles me how seemingly capable people have had the idea that a cryptocurrency would counter 2008 style stuff. It seems like a reasoning short circuit: Big institutions failed us, so something without big institutions must be immune. The big institutions failed us exactly by allowing each other to do too much. By not regulating (which is by definition centrally imposed).
- splintercell 9y ago
  > It baffles me how seemingly capable people have had the idea that a cryptocurrency would counter 2008 style stuff. It seems like a reasoning short circuit: Big institutions failed us, so something without big institutions must be immune. I think you misunderstood what people mean by saying "counter 2008 style stuff". The aim isn't to prevent 2008 from happening again, but if 2008 were to happen again, then be in a safe situation. Also you're taking the input from your opponents, but plugging that input into your own model, without realizing that bitcoin proponents do not share your model. Your model is: "Lack of regulation caused 2008 to happen", but not everybody agrees with that model. There are multiple models, but the most common model is that central bank inflating the money supply, and manipulating interest rates caused 2003-2007 to happen. 2008 was merely the well desired correction. Same model applied to today, it means that we are currently in a major bubble and this bubble will pop in the coming years. Alternate financial systems such as bitcoin and smart contracts, are 'customizable' enough (For lack of a better term) that they give people a fighting chance. 1. Capital controls can't be imposed 2. Bank accounts can't be confiscated 3. If regulations have to be bypassed to make trade happen, then they should be more easily bypassed (for instance minimum wage laws). So when the next crises happens, people are able to flee nations with their capital, their bank accounts will not be able to confiscated, and they will side step any regulation which screws people over. This is the aim of cryptocurrency proponents, irrespective of what is being said.
  - ska 9y ago
    There are multiple models, but the most common model is that central bank inflating the money supply, and manipulating interest rates caused 2003-2007 to happen. 2008 was merely the well desired correction Regardless of it's truth value, that is not clearly the most common model.
peterjlee 9y ago
It wasn't "The sort of activity which led to the financial crisis" that inspired bitcoin. After the crisis happened the US government funded the massive bailout by printing more money. It turned out to be a "good" decision since it prevented a catastrophic economic failure but it did cause more inflation and some people weren't happy that a government can just print more money on a whim. So that's how the bitcoin came about to make a currency where there are no central governing body that can just print more whenever it wants.
- noddy1 9y ago
  The banks seem to have won the propaganda war about bailouts preventing economic collapse pretty well. I guess once the government makes the bailout and the banks accept the bailout, both parties are pretty committed to ensuring the public thinks that the bailouts were required. What we really got was a tacit approval for bankers that they could make highly leveraged bets in the 7 years that the markets were going up, make shitloads of money, feel like geniuses, and then when it all inevitably explodes the government would bail them out and then QE like crazy to pick up the pieces. The QE would be given not to citizens, but to banks to inflate equity markets, and start the whole cycle again. Now we have a whole new generation of financial "geniuses" overhyping every asset class, making shitloads of money off it all, thinking they are geniuses, and when it all collapses again they think the same thing will happen. It may do, but this time I don't have to be involved in that bullshit. My money is now unprintable. They can devalue the USD shitcoin all they want, but there are still only 21 million possible bitcoins and that's all I care about.
- openasocket 9y ago
  The government didn't actually print any money, the central banks just acted as a "lender of last resort," which works just as well in Bitcoin as it does in cash.
  - deleted 9y ago
    [deleted]
  - noddy1 9y ago
    They printed $4+ trillion in the aftermath and gave it to banks.
buckthundaz 9y ago
You are correct that the activity that led to all financial crises will not be mitigated in the domain of national currencies. It will be avoided in decentralized money that is uncorrelated, like gold. Your concept of decentralization is off. The purpose of it is this: How many points of failure are there? How many of these points can break before the cards all fall? If this happens, who pays for it? This illustrates that the USD is not decentralized. Cryptocurrency is an exit from this, much like gold or real estate or other investment vehicles. Cryptocurrency is available to anyone with a phone and internet access -- that cannot be said for any other investment vehicle. This will take the wind out of the sails of financial institutions as there is another option for people.
- shawn 9y ago
  Possibly, but the space requirements for crypto shouldn't be underestimated. I think Satoshi kept 1MB blocks because he realized it would quickly become untenable for most people to run full nodes. ETH has similar problems. What does the end game for this situation look like? Will people just create Bitcoin Zero, which is identical to Bitcoin but preallocates the existing coins starting from the genesis block? (A manual GC, as it were.) Otherwise it seems like crypto will be around 100 years from now, but probably not BTC. At least not in a form where non-miners can participate.
- jhwang5 9y ago
  Switching to cryptocurrency actually makes the problems worse, because instead of regulated entities calling the shots, we have an oligarchy of ASIC-armed miners calling the shots. Between the two evils, any sane person would rather trust a regulated business than some folks who prefer to hide in the shadows.
roadbeats 9y ago
Bullshit. Have you ever done wire transfer ? Every SWIFT transaction goes through US. Let’s say you want to transfer USD from one Vietnamase bank to another Vietnamase bank; even local USD transfers has to go through US and people get charged a lot for that. Just for transferring 25k USD between two local banks, I got charged $150. It’s ridiculous to claim “USD is decentralized” in a world where developing countries can not even trade with eachother without paying US a cut.

sharemywin 9y ago

It may have been meant as a joke but it has a purpose. but it's become a base market in several exchanges.

nwah1 9y ago
Then those exchanges have no purpose.
- Bromskloss 9y ago
  And whoever uses those exchanges has no purpose, and so on, until no one has any purpose.
  - nwah1 9y ago
    A giant rube goldberg apparatus built around a worthless central premise is just as worthless as the central premise itself.
- xenihn 9y ago
  They do serve a purpose -- pumping and dumping dead coins that can't actually be withdrawn from the exchange. I didn't do my research and sunk about $100 into one. I'm technically up $20 on it (if converting to ETH/BTC, which I can't actually do because there's too many other sell orders at the exact same price necessary for me and others to make a profit ahead), but would be down as soon as I converted it to doge and paid the transaction and withdrawal fees.
mkirklions 9y ago
Uh? What exchanges? I've never seen a DOGE to anything. Right now, BTC is the most popular. ETH is second most popular. I know some exchanges support monero, but those are very limited in what can be converted.
- shakestheclown 9y ago
  Mercatox has XRB/DOGE which has a whopping $9k 24hr volume.

gourou 9y ago

Key take-away: > Once the cryptocurrency price bubble pops and takes all the hype with it, will the community be able to recover the energy it needs to build real, innovative technology once again?

mkirklions 9y ago
Yeah because most people are putting fun money into the alt-coins. As long as people bought bitcoin and ethereum, they probably will end up positive. The people that are riding on 3 month old coins like IOTA or TRON will lose. Those risking everything on the future of Ripple or BCH or 1-2 specific coins will lose. Those that diversify impartially will come out major winners.
- simias 9y ago
  Speculation is worthless because unlike bitcoin it seems to be infinite supply. Tell me that you're able to predict what the cryptocurrency scene will look like 1 year from now and I'll call you a fool. Your thought process to reach that conclusion might prove more insightful however. So far it seems that cryptocurrencies move alongside each other for the most part, when the big ones go up the smaller follow. If you diversify in crypto and everything crashes at the same time how do you win? How does one diversify "impartially"? What if it turns out that in the end only IOTA remains? For all the talk about real use cases and replacing fiat cryptocurrencies are 99% speculation and get-rich-quick schemes nowadays. It seems we still have some wild times ahead of us before it settles one way or an other.
  - dahdum 9y ago
    They rise and fall mostly with Bitcoin, Ethereum has shown recently to be more independent, but the biggest drops are usually spurred by panic about crypto regulation. Regarding 2018, I'm your fool...here are my predictions: Bitcoin will remain top market cap and crypto numeraire. Majority of the newest projects like IOTA, Tron, etc. will be down significantly. Burned by vaporware projects, investors will become more cautious about "new" ICOs and enormous token issuances. None will rise as quickly as TRON, EOS, and others did. Ethereum will remain #2 but at least once will have had a great run against Bitcoin, hitting 80% of bitcoins market cap. Overall crypto market cap will rise 200%-300%. Ethereum will continue to have most transactions, enterprise, and developer support. Could change in 2019 and beyond, but has a huge lead right now. Ripple will crash further, but the platform will gain real world usage. BAT will rise and support becoming common on enthusiast sites, like tipjar services. Most of the smart contract chains in development will make no real progress, but I expect at least one "ethereum killer" to become a reasonable alternative. Disclosure: I own Ethereum and Bitcoin, would buy some others but maxed out on my crypto exposure.

Bromskloss 9y ago

https://www.youtube.com/watch?v=000al7ru3ms https://www.youtube.com/watch?v=000al7ru3ms

throwaway30yo 9y ago

DOGE is a pretty good currency to use for moving money between exchanges. That is why its used. If BTC had low/no transaction fees and was fast, people would have less incentive to use DOGE. Overvalued? Its possible but I think the entire crypto market is actually insanely undervalued. I was talking to my financial advisor the other day and he said pretty much 100% of people now are asking him about crypto and are considering putting money in. This seems like it is just the start. The figure for the .com crash was around a 7 trillion dollar market cap. Crypto is 0.7 trillion today and its more of an international market then the .com days. Easily cypto could 10x in size over the next year or two. In the end its super high risk speculation. You can figure the entire market is overvalued but there is no doubt that there is money to be made in several sub-sectors of the crypto market.

sremani 9y ago
Minting new coin is not difficult, there is CrptoNote project on Github you can fork and in matter of minutes you can have your own "Coin" and start mining on couple of old Linux boxes. I understand the network and traction, but this is not very different from each bank having its own currency notes back in the day (1800s?). The biggest problem is they are not stable enough to be currencies their volatility makes them more like commodity/asset and their Transaction speed does not make them huge transaction payment systems. They fail at both promises when they gain traction, of course, there will be ultimate winners in this space. Instead of calling them Cryptocurrencies, calling them DLT (distributed ledger tech) is more appropriate for most the coins anyway.
- lmm 9y ago
  I'd trust Doge more than most cryptocurrencies, honestly. It's relatively established, the community doesn't or at least didn't take itself too seriously (sounds like that may now have changed), and it took the (admittedly mostly symbolic) decision to allow "mining" to continue indefinitely, ensuring there will always be a Doge supply rather than passing all gains to the early adopters. In a sense it's a lot more functional than Bitcoin - people use it for "microtransactions" and "tipping" that would be impossible with Bitcoin's transaction fees.

down 9y ago

That something wrong with fiat, in my country all political parties battle for control of the national bank that issues money, why, well there are stories of powerful political leaders, kicking the door and just asking for money.

perseusprime11 9y ago

Just wait for Wall Street to start building complex derivative products that will be used as a vehicle for these cryptocurrencies and all of a sudden the bubble will reach epic proportions.

saosebastiao 9y ago

The problem is the use of market cap as a valuation metric. It is absurd to think that your joke cryptocurrency is actually worth $2B just because one person was willing to trade at a price that implies $2B. To show the absurdity, consider the people who buy used cooking oil from restaurants to turn into biodiesel for their modified 1975 mercedes 300D. They might pay $2/gallon for that used cooking oil. Would it be reasonable to assume that the market size of used cooking oil is now $2 * (Gallons of used cooking oil produced yearly)? No, that's absurd. Someone paid a high price for it, that doesn't mean everybody did or will.

josu 9y ago
As of now Dogecoin has a 24hour volume of 58M US dollars. This is not just one person, this is a market consensus on the value of each coin.
- saosebastiao 9y ago
  And what if 90% of that market consensus is really just 10 different high frequency traders battling for top market making position, with the occasional humdrum buying to "diversify"? The market depth says a lot more about a currency's value than the market price or even volume does. It's not something that can be summed up into a tidy single number, though. Which means people don't talk about it when when writing glorified blog posts.
  - sharemywin 9y ago
    https://bitinfocharts.com/top-100-richest-dogecoin-addresses.html https://bitinfocharts.com/top-100-richest-dogecoin-addresses...
    - gruez 9y ago
      how's that useful? a wallet can have multiple addresses, and an address can belong to multiple wallets (on web wallets or exchange accounts).
  - 9y ago

madeuptempacct 9y ago

Where do you sell your dogies?

sharemywin 9y ago
https://coinmarketcap.com/currencies/dogecoin/#markets https://coinmarketcap.com/currencies/dogecoin/#markets

wuliwong 9y ago

I think that this article has too many anecdotal references to scams and profiteers but there isn't any sense of the statistics or scale. Without knowing if people are behaving worse on average in the crypto world or the fiat world, I don't find them very helpful. My anecdotal experience has been really wonderful in crypto. I've become part of a really nice online community where people are eager to share ideas and help each other out. I've also found the crypto market to be far more approachable than traditional investments for myself. But who knows, maybe I just have been lucky?

roymurdock 9y ago

Crypto allows people to do 2 very important and useful things: 1) Move money around government currency controls (for a small fee) 2) Invest and speculate on potentially valuable assets. Sure you can't live in, eat, or drive a Bitcoin, but finance/trading is all about creating and betting on abstractions, and virtual currencies are the ultimate abstraction. Crypto is especially attractive given the current easy money low volatility environment) I am similar to the author in that I was very excited about blockchain and its implications in 2013/2014 and had recently become very disillusioned with how adoption played out in the real world. I think it's time to move past this disillusionment and face reality instead of continuously being angry at how nonsensical a lot of this is, no matter how "useful" we really think these 2 current uses of cryptocurrency are. The reality is that we are living in a world (in the US at least) we trust traditional institutions/knowledge to be able to provide common goods and help us raise our standard of living less and less. What do we want to do about that? Getting mad/worried about cryptocurrency speculation is not the answer.

sharemywin 9y ago
wonder where we are in the hype cycle: https://www.gartner.com/technology/research/methodologies/hype-cycle.jsp https://www.gartner.com/technology/research/methodologies/hy...
- kleer001 9y ago
  I think we're on the 5th or 6th one with two more to go in the next ten to twenty years as crypto chews through networks of people at different distances from expertise in bitcoin. Also follow along with the classic stock bubble: https://blogs-images.forbes.com/jessecolombo/files/2014/02/stages_bubble.png https://blogs-images.forbes.com/jessecolombo/files/2014/02/s... These curves remind me of the dopamine response curve to tasks like in a rat running a maze: https://neurofantastic.com/brain/2017/1/12/dopamine-crescendo-marks-the-path-to-reward https://neurofantastic.com/brain/2017/1/12/dopamine-crescend... But maybe that's pareidolia.
- Robotbeat 9y ago
  I think we're at the peak of inflated expectations.

dustingetz 9y ago

A copy/paste from /u/palmerstoned on reddit on 2018 Jan 7. What do you guys think? /u/palmerstoned: There is no fucking limit on how high this can go (compared to traditional stocks where there actually is a limit due to economic indicators like P/E ratio's). When someone says it's overvalued or undervalued, they are automatically wrong because we have not found any method yet to actually value crypto's, unless you compare the value between crypto's. The nominal value of derivatives in the world is estimated at 1.2 quadrillion (probably a gross overstatement and a bad comparison but a man can dream). Let that sink in for a moment. /u/palmerstoned: We are still far away from large investment bank ETF's where they actually buy Bitcoins or Ethereum. But it will come, they will never let all this money lying around. The problem right now is that exchanges aren't safe enough yet to be buying Bitcoins by the millions. UI interfaces for wallets are way tooo complex for the average Wall Street trading desk. But this will change, eventually. (definitely keep an eye out for investment opportunities in this niche market). Goldman Sachs has already announced they will put up a trading desk by the summer. Things are about to get a lot more crazy!

mr_spothawk 9y ago
love it. wonder why it’s so contrary

wyldfire 9y ago

Dogecoin is kinda like a control/placebo for real cryptocoins. And the fact that it exploded without providing real distinct utility apart from existing coins is an indication that something is indeed wrong.

HuggableSquare 9y ago
Originally it was pretty much just a fork of Litecoin, but since then Dogecoin has considered the economic viability of it as a real currency. It's one of the few inflationary cryptocurrencies, it has a block every minute which is good for confirmation times, the transaction fees are very low, AuxPoW has given it a huge network of miners keeping the network alive, and the core devs have kept the stability of the network above all else which includes not adding every new feature that all the other altcoins love.
- meesterdude 9y ago
  > which includes not adding every new feature that all the other altcoins love. Or indeed making any changes at all! The github repo hasn't been touched in over 2 years
  - HuggableSquare 9y ago
    Here's a reply I posted elsewhere in the thread about this: Although there hasn't been a release in two years they're currently working on releasing 1.14 this year. In case you're interested the core devs have been doing a pretty good job on keeping people informed on the status of the release on the subreddit. Latest post here: https://www.reddit.com/r/dogecoin/comments/7oxi53/developer_brain_dump_incoming/ https://www.reddit.com/r/dogecoin/comments/7oxi53/developer_... Also, there has been lots of updates to the github repo, just look at the 1.14-dev branch instead of master.
Balgair 9y ago
I love this and am going to steal the phrasing. Doge is an absurdity. Like "Cards Against Humanity" or the "C'est non un Pipe" paintings. That it can be considered to be 'legit' or anything else is fantasy. Anyone that is investing in Doge is a fool. Unfortunately, there are just too many damn fools.

mrb 9y ago

«Once the cryptocurrency price bubble pops and takes all the hype with it, will the community be able to recover the energy it needs to build real, innovative technology once again?» Of course it will recover. Blockchain technologies are so transformational that you need a lot more than a simple price crash to kill cryptocurrencies. Of all persons, the creator of a cryptocurrency (even a joke one) should understand this. In fact, people always seem to forget that Bitcoin (actually the crypto market at large) has already experienced 4-5 major crashes in the last 8 years where prices lost between 50% or 95%(!), sometimes remaining depressed for months, but the market has always recovered.

AlexandrB 9y ago
> Of course it will recover. Blockchain technologies are so transformational that you need a lot more than a simple price crash to kill cryptocurrencies. Are they transformation? I have yet to see a blockchain application that's not done more cheaply with a traditional database. Most of the practical uses of blockchain are as effectively centralized "distributed" databases (e.g. corporate blockchains), while the rest are cryptocurrencies and other distributed ledgers that are, at the moment, extremely volatile.
- mrb 9y ago
  A blockchain-based cryptocurrency has 3 central qualities: decentralized, permissionless, irreversible transfers. That's what makes it transformational. No other currency or system can provide these 3 properties (except physically exchanging a commodity, eg. exchanging gold in the real world.) You claim most cryptocurrencies are "effectively centralized", but that is false. For example if I make a Bitcoin transfer by broadcasting it to the P2P network (ie. assuming it reaches most miners), no single entity can block the transaction, thanks do decentralization (ie. many disparate miners around the world attempting to include the txn in their block.)
  - deleted 9y ago
    [deleted]

beeskneecaps 9y ago

Jackson just mad because he sold instead of hodl

mr_spothawk 9y ago

by my reading, Author thinks we're all better off when we're protected from our irrationality by regulatory entities keeping us from doing stupid shit with our money. i think the run on DOGE is about how much easier it is to move DOGE between exchanges. i could care less about pump&dumps... that type of behavior will naturally stop if we leave ourselves to discover the risks. if we use a regulatory mechanism to prevent folks from engaging in that type of behavior, we may very well prevent speculation, but we won't teach anybody anything. i think it's smarter, on the whole, to let the crazy crypto churn continue, and see where it takes us, than it is to disenfranchise all kinds of folks from learning about markets/currency/etc... by regulating them away from it.

amatecha 9y ago

Pretty happy with the DOGE bubble since I've traded out a couple thousand already for other coins... thumbs up But, yeah, I'd wager that eventually the bubble will burst and there will be few remaining cryptocurrencies that hold their value, IMO.

ojr 9y ago

The founder who was given the title as "inventor" in this article is not the inventor. He did not mention the developer who help do the C++ source code and actually invent Dogecoin. I would call my cryptocurrency a joke too probably if I saw the price rise exponentially and didn't put the work to make it a viable blockchain. It is easy to criticize from an armchair.

djsumdog 9y ago
It was a fork of Litecoin (I think?), so yea, someone had to fork it, rebrand everything and publish all the apps. (All the bitcoin derivatives from like 2012-2014 looked exactly the same .. same Android/QT apps .. minor differences and rebranding here and there. The big differences were usually the crypto algorithms and hashing variations...) But really, your comment goes to something more fundamental in how we look at inventors and Captains of a ship. Zuckerburge early code leaks of Facebook show it was some pretty terrible PHP, yet we attribute everything to him instead of the hundreds of engineers that made things like Hiphop, Hack, React, etc. etc. Bill Gates was not a good developer. A lot of his early success projects were license purchases and rebrands and not trying to get fucked by IBM. Don't even get me started on the cult of Steve Jobs. People like to see a Captain of a ship. People like Karl Marx saw those workers rowing the ores. Even people with the nicer more high paying jobs like navigators, sill made a fraction compared to the captain, but it was enough they felt better than the stack below them. Orwell agreed, but contested that even if the crew men revolt and take control to give everyone a better and more equal share, eventually over time, some people will convince everyone on the boat they should be at the top, and enough people would follow and you'd be back to where you were. But yes, we always need to have an "Inventor" .. a Tesla or Musk or Ford; the leader of a ship, ignoring the thousands of people that made it happen.

Jonovono 9y ago

Anyone remember when Dogecoin raised money for the Jamaican bobslead team. https://www.theguardian.com/technology/2014/jan/20/jamaican-bobsled-team-raises-dogecoin-winter-olympics https://www.theguardian.com/technology/2014/jan/20/jamaican-...

leoc 9y ago

https://www.reddit.com/r/dogecoin/comments/7oxi53/developer_brain_dump_incoming/ https://www.reddit.com/r/dogecoin/comments/7oxi53/developer_... , from one of the current Dogecoin devs: > I feel some are using our rise to illustrate the absurdity of cryptocurrency pricing (http://uk.businessinsider.com/dogecoin-cryptocurrency-has-ma.. http://uk.businessinsider.com/dogecoin-cryptocurrency-has-ma.... for example). To me, in an environment where a cryptoasset with $30 USD equivalent transaction fees has a market cap of over a quarter of trillion dollars, I don't think we're the absurd one. Yes we take ourselves less seriously, but that doesn't mean we're not serious behind the scenes. We're a 4 year old currency with transaction fees barely over a cent and significantly higher throughput than most other cryptocurrencies. (Disclaimer: I know him personally.)

pbkhrv 9y ago

> "In many ways, 2017 marked the year that cryptocurrency stopped being about technologically innovative peer-to-peer cash and instead essentially became a new, unregulated penny stock market." I don't think it stopped being about tech innovation - there is a ton of stuff happening around proof-of-stake, layer 2 networks, state channels etc. It's just that the stories around the speculative aspects of the cryptocurrency assets have been dominating in 2017.

Tommah 9y ago

At this point, if you put Dogecoin and Bitcoin next to each other, Bitcoin looks like the joke. It's slow, the fees are too high, and its developers won't address these problems.

statoshi 9y ago
Sounds like you're looking at the wrong metrics. Dogecoin had 0 commits to its main repository in 2017. Compare that to 3,277 commits to Bitcoin Core alone. Bitcoin has scaling issues that developers are addressing with second layer networks because tons of people are using Bitcoin. Dogecoin doesn't because it has so few users that the demand for block space is well below the available supply.
- nicky0 9y ago
  The story those numbers tell me is that Dogecoin is already working well enough that it didn't need updating. Whereas Bitcoin developers are scrabbling hard to fix the sinking ship.
- stordoff 9y ago
  I don't think commit numbers alone tell you the full story either (e.g. FLAC going years between releases, not because it's abandoned but because it's basically done). The 1.14-dev branch seems active enough anyway: https://github.com/dogecoin/dogecoin/tree/1.14-dev https://github.com/dogecoin/dogecoin/tree/1.14-dev
- beokop 9y ago
  How is the “new world currency” being updated ~10 times a day reassuring at all? All it takes is one serious bug to wipe out $240bn of wealth.

skyisblue 9y ago

Wasn’t Dodgecoin created to be an indicator of how much of a bubble the market is?

orf 9y ago

"The guy who ruined DogeCoin" is also an interesting read[1]. Things didn't turn out so well for him[2] 1. https://motherboard.vice.com/en_us/article/78xqxb/the-guy-who-ruined-dogecoin https://motherboard.vice.com/en_us/article/78xqxb/the-guy-wh... 2. https://news.bitcoin.com/ryan-kennedy-rapist/ https://news.bitcoin.com/ryan-kennedy-rapist/