Dogecoin: The State of the Union
Thursday 17 July 2014
I am a proud shibe and we have proudly come through our first extended period of fear, uncertainty and doubt (FUD).
Dogecoin has experienced a meteoric rise. Since its launch in late 2013 it has managed to capture the hearts and minds of internet users everywhere. Importantly, it has opened up the world of crypto to entirely new demographics.
Bitcoin and Litecoin are serious financial business. Dogecoin is unintimidating; it has a cute shiba inu on the logo after all. As a result it has tapped entirely new markets that would otherwise steer clear of crypto.
For all intents and purposes Dogecoin is just Litecoin with different branding. So the entire crypto-currency space benefits from Dogecoin’s work and success.
There is a whole new user base that now knows the basics: wallet downloads, addresses, and how to interact with digital tokens. They will go on and spread the word.
The Quick Rise to Fame
In a space rapidly populating with alternatives, Dogecoin was instantly embraced by the Reddit community. This gave it a leg-up (pun intended). Rather than going through the laborious process of community building, the cute shiba inu was adopted into one.
The Reddit community quickly gave Dogecoin its first use case; tipping. This spread the coin far and wide. It got people interested. The large denominations helped peak interest. With developer support, tipping spread quickly through other social media.
The community also took on the task of promotion, quite aggressively. In a short space of time the community had attracted mainstream attention, raising enough money (in DOGE of course) to both finance one driver’s Nascar ambitions and send the Jamaican bobsled team to the olympics. The latter is my absolute favourite marketing stunt of all time.
The community was attracting a lot of attention. Generally it was becoming renowned for its irreverent attitude and sense of giving. Shibes continue to wear this badge with pride.
From its dizzying heights at launch, Dogecoin’s total market cap has slipped all the way to approx. US$ 20 million as of writing.
When Tim Swanson posted this critique the research revealed some serious technological and economic issues Dogecoin was set to face, very soon.
If Dogecoin could not incentivize its network to both keep it secure from attack and process transactions, then things would not end well. His arguments were solid. A lot is still up in the air.
He did lay out some potential remedies. One solution was merged mining with Litecoin. The benefits of this were detailed in a series of posts and AMA (Ask Me Anything) by Litecoin’s Charlie Lee. The issue divided the Dogecoin community. Though the arguments for added network security were compelling, it seems the community decided against it.
In the crypto space you can feel sentiment. This was one in a series of punishing blows dealt Dogecoin all at once.
UltraPRO International announced its intentions to trademark the word Dogecoin. This caused outrage among many fellow shibes and further divided the community. Ultimately it lead to founder Jackson Palmer stepping away from the community.
While the price plummeted and things got heated, the fundamentals were still there.
The developers kept coding and the tools kept being released. The network kept chugging along. As an example users benefited from both a lite-client and browser extension wallet. These sort of tools are still rare for other, older coins.
A major payment processor announced that they would support Dogecoin payments for their merchants. Then one of their major clients; Hustler Magazine, confirmed it would start accepting payments in Dogecoin.
At the same time the betting space matured and developed with a more professional class of game. If you have gambling and porn covered, surely your future is bright.
Dogecoin continued to be embraced by new exchanges, including those in the lucrative Chinese market.
Most importantly, the community soldiered on, as vibrant and passionate as ever.
A new dawn
If Dogecoin is here this time next year, then I dare say it will be here for a long time. The optimism is palpable amongst my fellow shibes. I enjoy being part of the Dogecoin revolution and I hope to participate a lot longer.
The only looming dark cloud seems to be the security and longevity of the network, as block rewards rapidly diminish. Perhaps faith that the core developers have this covered is justified. Is that faith a little too cult like? Perhaps. Is it unjustified? Time will tell.
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