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Dogecoin and the Appeal of Small Numbers
- phaed 13y agoAaaand there goes our precious low difficulty.
- flatline 13y agoI believe the problem they describe is both real and somewhat frivolous at the same time. The minimum transaction amount that does not incur fees is currently .01 BTC, so I think there is an actual issue for micro-transactions as things stand now. However, the smallest indivisible unit of a bitcoin is 1 satoshi (1e-8 BTC), and if the bitcoin fanatics are to be believed and 1 BTC will be worth anywhere from $40,000 to $1,000,000 in the future, it makes sense to deal in the smallest possible denomination that can show up on the blockchain. A 200K satoshi tip sounds a lot better than a .002 BTC tip, or even 2mBTC (hope I got those decimal places right!)
- deleted 13y ago[deleted]
- willholloway 13y agoGreat article, but I disagree with one point. I do believe the value of one Doge will reach one dollar. A 100 billion market cap is just ~8 times that of Bitcoins. If Doge succeeds at its goal of being the tipping currency for the internet it will reach at least one dollar. Update: To expound on my point, I think Dogecoin solves the single biggest crisis the Internet has created, and that is "How do we compensate people who create digital works that are infinitely reproducible?" This is Jaron Lanier's beat. Has the internet delivered in broadening the middle class? No, it has threatened the middle class. When people work for Likes, or reputation, instead of cash, they become impoverished. Dogecoin can solve this problem by being a viable micropayment system. It can bring a currency layer to the internet, undergirding everything. As coders, Doge allows us to work with currency as easily as we work with an API. The economic security of creators depends on being able to extract revenue in amounts greater than what advertising provides but less than what credit cards are capable of. All of the micropayment companies so far have failed. The prize is huge. I bought into Dogecoin because I was vexed by the problems Lanier pointed out to me and I saw it as a micropayments solution that has gained explosive traction in just six weeks. This is coming from someone whose HN comment history has been very down on cryptocurrency. I now have the fanatic zeal of a convert.
- cortesoft 13y agoWait.... bitcoin cap is 21 million, which puts the 100 billion cap at 4761 times that of bitcoin.
- boyter 13y agoYou have your numbers a little bit wrong. The total number of coins is what you are referring to. There will only be 21 million bitcoins and 100 billion dogecoins. The market cap is their value measured against the US dollar. Bitcoin is at 10 billion at the moment http://coinmarketcap.com/ http://coinmarketcap.com/ If dogecoin rose to 100 billion ~10 the size of bitcoin each coin would be worth a dollar.
- cortesoft 13y agoYou are right in that market cap means total value... however, in the context of the article and the comment I was replying to, they meant total coins (where else would the 100 billion number come from?) Wait... now that I read the above comment again, I think you may be right... they are saying that it would only take the total value (market cap) of dogecoin to be 8 times the current market cap of bitcoins for the dogecoin to be worth at least $1 a coin. So nevermind, you are right and I was wrong. In my defense, the original comment was a little unclear about what they meant.
- boyter 13y agoNo problem. I modified my comment to reflect this to avoid any further confusion.
- devcpp 13y agoIndeed, with today's $940 Bitcoin, a $1 Dogecoin would that the Dogecoin market would be worth over 5 times the current Bitcoin market. I don't see it happening, and I don't even see the Dogecoin market cap even reaching the Bitcoin market cap, at least not unless Bitcoin itself becomes a major currency, and Dogecoin becomes the official joke currency.
- interstitial 13y agoI think it's ironic that 'Small Numbers' in now #2 with 23 points and 2 comments (well, 3 now). The HN penalty regex isn't fine tuned. Also, ironic, that much of reddit has a financial incentive to promote it. Can I promote real estate and bulletin board stocks if I give it a tech slant?
- deleted 13y ago[deleted]
- 4m0c4n1 13y agoSure you can.
- bendoernberg 13y agoNext thing you know people will start submitting blog posts about their own companies!
- jmuguy 13y agoI switched from mining LTC to Dogecoin today. Feels good to get 100s of coin an hour compared to 0.002 LTC. So yeah small numbers and all that.
- rch 13y agoThis is a little absurd. It's like hearing that people living near the beach just started using shells as money all of a sudden. Except without even the inconvenience of physical shells.
- steveklabnik 13y agoHuman beings are generally a little absurd. You can try to ignore it, or you can try to take advantage of it. Dogecoin is doing the second.
- smtddr 13y agoWe're all humans here... I think The Lotto is "absurd" but I still play it when it reaches those ridiculously high levels. Spending[1] $400 on CandyCrush is "absurd". The $999 iOS app "I'm rich" was "absurd". The idea such a thing as bitcoin, from an anonymous dev, somehow reaching $1,000 each is "absurd" .....but here we are. :) As much as I thought Dogecoin was ridiculous, I now know that I better go get some... just in case. 1. http://www.insanee.com/update/wtf-2/400-bucks-on-candy-crush-is-just-too-much-money http://www.insanee.com/update/wtf-2/400-bucks-on-candy-crush...
- oafitupa 13y ago"The idea such a thing as bitcoin, from an anonymous dev, somehow reaching $1,000 each is "absurd"" That's not absurd at all. Might be absurd to you if you are absurd though or not good at Math, like lots of other humans apparently are.
- smtddr 13y agoHeh, okay. So I take it you're a millionaire because when you first heard of bitcoin you were like "That's a great idea!!!" and minded/purchased millions of them. Or if you missed that train, you got onboard Litecoin when it was less than $5... or Namecoin when it was less than a dollar but shot up to $15 during November 2013....
- bitops 13y agoYou know most people don't want to believe that dogecoin is a real virtual currency. [EDIT: Apparently some people on HN have not seen 'Cool Runnings'.]
- steveklabnik 13y agoIt's more that short posts that consist entirely of cultural references for the purpose of making a joke are downvoted. Generally.
- bitops 13y agoThat's the thing - my karma is high enough that I know what not to post. Generally speaking. Every once in a while though, I get tired of pretending that I don't also have a goofy sense of humor and stuff like this slips through. Oh well.
- MartinCron 13y agoHumor is risky, sometimes it will flop, sometimes it will be greatly appreciated. I think you need to do a little more than just plug cultural references, though.
- krisgee 13y agoIt's 100% attitude. Doge is fun and playful while bitcoin seems to be the domain of crazy libertarians and people who just want to be the new bank.
- rmc 13y agoAs a techie who's been following bitcoin and disapproves of their libertarian ideology, I like the Dogecoin attitude. It's all a joke. It's like it's not serious. It's like people know that you're not going to replace all the money.
- bitops 13y agoFunny enough, that attitude may make it more successful in the long term. History has shown many times that it's not always the 100% dead serious who make it, but those who are just, well...making it up as they go along.
- VanillaCafe 13y ago> History has shown many times that it's not always the 100% dead serious who make it, but those who are just, well...making it up as they go along. Examples, please.
- earlz 13y agoI got into Doge when it was about a week old, stupidly bought like 1000 DOGE for 0.001BTC (there wasn't yet an exchange), which was way overvalued at the time. Then I setup cpuminer on my computer and let it run for a week and watched as 10,000 DOGE was added to my wallet. And then my mining pool shutdown. Just setup a mining pool account again this week and now my projections are looking more like 1000 DOGE every couple of weeks. ughhh I completely agree though, feels so much better to have 10,000 DOGE than 0.01 BTC. And makes for a much better tipping experience
- boyter 13y agoAgreed. I was mining primecoin to get bitcoin, and noticed this new thing called doge. Since I like the idea of having 10,000 of something I exchanged for it instead. You know what? I have had more fun with that then any of the bitcoin I have. I have been playing with day trading, tipping people online and buying things from people.
- Blahah 13y agoAny good resources for getting started with day trading?
- boyter 13y agoTo be honest I just winged the whole thing. Did all the trading on bter.com which I am a fan of. I know nothing about trading at all. Well nothing beyond random reading. Hence the appeal of trying it out with inconsequential sums of money like dogecoin. After all 20000 Dodge is cheap but enough to have fun with on the exchange. I got to experience the rush of a pump with unsustainable grow followed by a crash. All the while trying to increase my holding. I also had a ball doing so. The fun value I got out of Dodge easily exceeds anything I got in the bitcoin world.
- Blahah 13y agoI mined about 50k doges for fun, and now I'm looking forward to having more fun playing with it :)
- catshirt 13y agodogetips should replace "likes" "upvotes" etc
- JumpCrisscross 13y agoComes up in share grants as well. A 10,000 share stock award sounds a lot more impressive than a 50 share stock award, even if the former company has 10,000,000 (0.1%) shares and the latter 10,000 (0.5%).
- cbr 13y agoWhen a stock isn't publicly traded yet thinking of grants in terms of "percentage of the company" is helpful to get around this bias.
- steveklabnik 13y agoTakeaway: People are not rational. You can exploit this for marketing purposes.
- MysticFear 13y agoAlso, people are emotional. Not logical algorithmic calculators.
- ck2 13y agoIt's not just the number of coins. The people who created this were not idiots, they learned by looking at previous coins. 1. more coins for larger transactions instead of fractions 2. faster block rate (one a minute) 3. faster difficulty adjustment time (4 hours vs days or weeks) 4. faster halving time (every other month or so) 5. faster time to last block (mid 2015) 6. faster confirmations The random payout on a block is a neat idea. I think they borrowed it from lottocoin or luckycoin. It doesn't have to hit a dollar to be successful, even if it hits a penny USD, it will generate a ton of activity and "wealth". The only big problem they have is their blockchain is going to be insanely huge in a year, like staggeringly unmanageable.
- nwh 13y agoWeren't idiots? They accidentally hard forked their own currency without realising what they were doing by changing a transaction limit. The developers have no idea what's going on and it's readily apparent. http://4x.reddit.com/r/dogecoin/comments/1ufl1e/much_concern_dogecoin_block_chain_has_split/ http://4x.reddit.com/r/dogecoin/comments/1ufl1e/much_concern...
- ck2 13y agoAre you talking about the massive transaction that broke the chain and it forked or something else?
- nwh 13y agoYes. The author changed a value in an updated client that caused half of the network to see one chain as valid, and the other half to make scores of sub chains on the side. The value of the transaction was not the issue, but the developer not understanding how to maintain a consensus over hard forking changes.
- ck2 13y agoIf I am not mistaken, I think there was an emergency release because someone was flooding the blockchain with micro-transactions as an attack on dogecoin and they had to raise the transaction fee/minimum transfer. Either with that or around that time they also had to do a patch to raise the transaction limit. Both issues were hard to anticipate and I guess if you have to cause a fork, at least it happens while the chain was "young".
- 1qaz2wsx3edc 13y agoIt's interesting when you look at 42/BTC/LTC/DOGE. It seems the common denominator is rarity. The less rare, the less value, the more the higher the value. Sounds similar to something. DOGE are the pennies of cryptocurrencies. Just two cents, or two DOGE? I'm not sure anymore.
- steveklabnik 13y agoPeople have been saying that Litecoin is the silver to Bitcoin's gold for a while. Now some are saying Dogecoin is the bronze to Litecoin's silver...
- James_Duval 13y agoOn the Dogecoin subreddit, people have been arguing that Bitcoin is gold, Litecoin silver, and Dogecoin is money.
- Destitute 13y agoThe fascinating thing about DOGECOIN, is the vast majority of the internet judge it purely based on its aesthetic and name. Take away the "DOGE" and it still has one of the most supportive, charitable, and active communities. All three of those are important to have a successful currency because that community grows. People call it a joke or parody purely based on its name, and don't have the mental fortitude to think beyond the DOGE aesthetic which was intended as a spark to get the engine going. DOGE could become the de-facto internet tipping protocol if they go that route. Hell, they could even change the name and shut everyone up too... and then I wonder if people would still call it a joke currency or parody? Hmmm..
- MarkPNeyer 13y agoas i see it, a hallmark of the millennial generation is disdain for people and institutions that take themselves seriously. we are much more likely to trust a group that doesn't try to pretend it is "serious" because we see those people as untrustworthy.
- croddin 13y agoInstead of trying to set the value of each denomination of a currency to a certain amount why don't we use SI prefixes for them? Making very large and small numbers more relatable is what SI prefixes are designed for. Instead of talking about $DOGE 700 = $BTC 0.001, why not say $DOGE 700 = m$BTC 1? This solution would work even if the currency drifted further from the value of the dollar, just start using u$BTC, n$BTC, or k$DOGE etc.
- minimax 13y agoCan anyone comment on the profitability of mining Dogecoins vs bitcoins? It seems weird that mining one crypto currency would be more or less profitable (in dollars per watt terms) than another. Rational miners seeking to optimize profits would tend to mine the more profitable coin which would drive up the supply and drive down the price until an equilibrium is achieved. edit: While we are at it, does anyone know how many dogecoins can you expect to mine per kilowatt-hour?
- fragsworth 13y agoMining does not drive up supply. The profitability depends on the exchange rate and current difficulty.
- minimax 13y agoThink about it this way. I want to turn my electricity into dollars by mining crypto currencies. I mine some coins and then sell them to lock in the profit. Putting my freshly mined coins on the market increases the supply of coins available for purchase (and it should marginally drive down the price).
- skybrian 13y agoThe increase in supply is fixed by the algorithm, so you're really just increasing the difficulty and making it less profitable to mine. If more people decide to buy at an exchange instead of mining, it would tend to increase the price.
- ye 13y agoBitcoin is almost always the least profitable coin to mine. Doge currently is the 2nd most profitable to mine: http://www.coinwarz.com/cryptocurrency/ http://www.coinwarz.com/cryptocurrency/
- minimax 13y agoThanks!
- mmaunder 13y agoI once got a letter that told me to forward it to at least 10 of my friends and send $20 to someone.
- aresant 13y agoJust a random comment on the whole "community raised 25k" In fact one self identifying bitcoin speculator contributed $20k of that after moving some bc>doge all to drive speculative in doge through the assured free press (and wrote about his intent on reddit).
- citricsquid 13y agoThat's interesting! Do you have a link to hand? Thanks!
- aresant 13y agoSure http://www.reddit.com/r/dogecoin/comments/1virfc/lets_send_the_jamaican_bobsled_team_to_the_winter/ceu05jf?context=2 http://www.reddit.com/r/dogecoin/comments/1virfc/lets_send_t...
- MartinCron 13y agoThat seems like the sort of market manipulation that you used to be able to do in equity markets before the SEC stepped in and at least made it difficult. I wonder how common this is, or will become.
- MysticFear 13y agoDogecoin actually raised more than $25k more in the range of $40k, but yes one reddit user contributed $20k.
- natmaster 13y ago$20,000 is free now? Please give me $20,000 then - it won't cost you a thing.
- donquichotte 13y agoClassic pump & dump scheme, nice!
- spokenn 13y agoWhere can you exchange $20 for 10k DOGE easily? Doge-base anyone?
- boyter 13y agoYou need to buy Bitcoin first. Once you have $20 of Bitcoin load it into an exchange that takes Bitcoin and trade. Apparently cryptsy is bogged down with orders, so I would suggest http://bter.com/ http://bter.com/ which has been working quite well.
- pronoiac 13y agoYou might check EBay. Check Buy It Now and sort by price.
- drawkbox 13y agoDogecoin is one of those things that is right on the border of insanity and genius. The brand might give it such momentum and it could fit in as the internet tip karma. Reddit gold, gittip, doge, types of coin have social merit for sure and a bit of monetary reward.
- finnh 13y agoI am the only one who reads "Doge" as its pre-meme value: the ruler of an italian city state like Venice back in the day?
- dllthomas 13y agoThat's how I read it before I learned of the meme. I preferred it that way.
- dragonwriter 13y agoNo.
- bdr 13y agohttps://twitter.com/brendanaanes/status/413775573958156290 https://twitter.com/brendanaanes/status/413775573958156290 :)
- pcrh 13y agoI guess Doge as in Dogecoin was meant to be pronounced "doggie", deliberately misspelt, whereas the Venetian Doge is pronounced /ˈdoʊdʒ/ (~doj).
- klez 13y agoThe E at the end of doge (Venetian ruler) is not mute.
- patrickg_zill 13y agoI view Bitcoin as being more like "gold" and Dogecoin as more like "change in your pocket". As it is even with the recent runup in price, the value is not even 1 penny USD per Doge. Gold is more valuable, but in terms of actually changing hands (I am not talking about trading paper gold) the daily volume is low. Meanwhile lots of people use coins every day.
- jellicle 13y agoGreat post. Also perfectly explains why the idea that bitcoin will rule the world is nonsense; there's infinite competition from other fad currencies. Whatever benefit you think bitcoin has or will have - WHATEVER benefit - someone will make another currency that does it better and cooler, and then no one will have any reason to have bitcoins, and then your life savings evaporate. Social networks, teen pop music bands, internet currencies - all follow a nice, predictable rise and fall arc. We can't exactly predict how high the rise will be, or exactly when the fall will come, but we know it's coming.
- nyan_sandwich 13y agoYou know, it's probable that someone will invent an automatically diversified wallet that tracks the market cap of cryptocurrencies overall. Rise and fall of new cryptocurrencies would be of interest only to speculators.
- joshdance 13y agoWhen I first heard about dogecoin I laughed. When I saw the circulation I paused. When I learned more I got interested.
- goatse 13y agoGoatse Coin is coming - goatse.cx
- JulianMorrison 13y agoDogecoin is what finally convinced me that the internet had eaten reality.
- chris123 13y agoMy general thought, at least thus far, was/is that the "mainstream" crypto currency market will be a winner-take-all kind of market. But maybe there will indeed be one crypto currency for big transactions and one for small. It will be interesting to see how this plays out. As an insurance policy of sorts, I've acquired my first-ever Dogecoin. I am guessing others will as well. Hmm.