A Cryptocurrency Based On a Dog Meme Is Now Worth Over $1 Billion (vice.com)

Earlier today, the market capitlization of dogecoin, a cryptocurrency based on a meme about a Shiba Inu dog, passed the $1 billion mark for the first time. VICE News reports: Dogecoin was created back in the early days of the cryptocurrency craze. Launched in December 2013 as somewhat of a joke, the meme-inspired coin was dubbed "the internet currency" and designed to promote a sense of community and generosity rather than simply looking to make money. It gained fame during 2014 when it was used to send the Jamaican bobsled team to the Winter Olympics in Sochi and it even sponsored a Nascar team. The currency has been in relative stasis since, and despite no software updates being released in over two years, the cryptocurrency has risen more than 400 percent in the last month -- though one dogecoin is still worth just over 1 cent.

Even Jackson Palmer, one of the founders of the coin, expressed concern about the hyperinflation of dogecoin. "It says a lot about the state of the cryptocurrency space in general that a currency with a dog on it which hasn't released a software update in over 2 years has a $1 billion+ market cap," Jackson told Coindesk.

Comments

Re:Commodity "currency" makes no sense

[NicknameUnavailable]

Honestly the commodity regulations make less sense in some cases. Bitcoin is definitely a commodity - it has a planned limit, with deflation thereafter because of lost coins. Ethereum on the other hand is a currency with a planned inflation rate to make up for the lost coins and to grow with the user base. What we need for cryptocurrencies to actually take off are different regulations for different things (Bitcoin under the current commodity based taxation, Ethereum and the like under currency regulation, ICO/crowdfunding coins under securities/stock regulation, charities like Curecoin probably as currencies, maybe with some extra incentives tax-wise to get people to focus on computing projects with tangible value behind them, other donation coins meant to fund things like planting trees, etc.) Cryptocurrencies cover a very wide range of different things and should be evaluated independently if they are large enough to be taxed because lumping them all in one category damages their use, in the case of charities and public works projects it actually defies the nature of the tax codes meant to support projects in the public good to consider them commodities.

NetJ

[gbjbaanb]

I will just remind our younger readers of the dotcom boom, where tech stocks were seen as the new big thing and pumped up a bubble that eventually crashed. You can tell the top of this by looking at a tech company that was registered on the NASDAQ called NETJ.COM,

This had all the right words in the name, "net", "J" (for Java, hot at the time) and ".com" but its description of what the company did was:

The company is not currently engaged in any substantial activity and has no plans to engage in such activities in the foreseeable future

and this raised several $110 million in IPO funding from ordinary investors when it floated.

So a dog coin cryptocurrency "worth" $1bn... just same shit, different day.

Re:NetJ

[geekmux]

I will just remind our younger readers of the dotcom boom, where tech stocks were seen as the new big thing and pumped up a bubble that eventually crashed. You can tell the top of this by looking at a tech company that was registered on the NASDAQ called NETJ.COM,

This had all the right words in the name, "net", "J" (for Java, hot at the time) and ".com" but its description of what the company did was:

The company is not currently engaged in any substantial activity and has no plans to engage in such activities in the foreseeable future

and this raised several $110 million in IPO funding from ordinary investors when it floated.

So a dog coin cryptocurrency "worth" $1bn... just same shit, different day.

Some odd shapes painted on a canvas, by some guy named Picasso. A used baseball, that some guy named Babe scribbled on. A beat-up old guitar strung upside-down that some weird guy named Jimi used to play with his teeth. An old book of notes by a guy named da Vinci. Old bottles of rotten grapes. Shiny rocks and yellow rocks we mine out of the ground that we melt and polish.

The formula for value (1% subjective and 99% bullshit) was established long before the .bomb or cryptocurrency came around.

Snapchats "substantial activity" was losing hundreds of millions of dollars every year before their IPO and valuation of $20 billion. Makes you wonder how far we really are from the .bomb era of valuation.

That's called deflation, not inflation

[johannesg]

Inflation is where your coin gets worth less and less. In this case the coin gets worth more and more. That's called "deflation", and economists and politicians want you to believe that it is incredibly bad for you if you can buy more stuff with the same money.

Their reasoning is as follows: "if your money is going to be worth more, you'll wait before buying anything, and that's bad for the economy." Let's investigate that strange claim. Which of the following statements is true?

"I will wait with buying food, because next year it is cheaper."
"I will wait with paying my mortgage, because next year it is cheaper."
"I will wait with buying a car, because next year it is cheaper."
"I will wait paying for a holiday, because next year it is cheaper."

The only category of product that might be affected in some way is replacements for luxury products, i.e. the following statement might actually be true:

"I will wait buying a new mobile, because next year it is cheaper, and my current one still works fine."

The real reason they want you to believe that deflation is bad is this: when new money gets created, it typically ends up in the hands of the richest individuals first. Then it "trickles" down to poorer individuals. However, the speed of price increases is not the same as the speed of trickling down money, and the people at the bottom of the pyramid get the disadvantage of price increases long before they get extra money. In this way, inflation is basically a wealth transfer from the poor to the rich.

Deflation must therefore be the opposite: a wealth transfer from the rich to the poor. And that's why so many economists and politicians are fighting it.

If I had invested in (say) a couple thousand bitcoin when I first heard about it, for a price that was pretty much peanuts, I would now be a very rich man. That's the power of deflation at work.

Re:That's called deflation, not inflation

[LordKronos]

You are missing the effect on wage rises - that they become wage drops. This is where the system breaks. If everything is 5% cheaper next year then that includes the value of your labor. Your company is getting 5% less income because the price of its products is dropping. That filters through to you...

Yes, all these people hyping deflationary currencies miss this. And they miss the next important consequence of that. Most people have more debt than they do savings. Deflation is good for you if you have lots of savings, but not lots of debt. Most people owe $100k or more on a mortgage, but have only a few $k (if that) in savings. Deflation is a benefit for your meager savings, but is a huge hindrance for your much more sizable debt.

When you buy a mortgage, you owe a fixed amount of currency. With inflation, over time your income tends to increase slightly year to year, and over the years the mortgage becomes a smaller and smaller part of your income, making it more and more affordable. This is great because if you buy something you can afford, you can generally count on being able to afford it until it's paid off (job loss and severe employment cut being the exception, but that will hold true for deflation also, so lets not consider that). But with deflation, it's the opposite. You get your mortgage, and the payment amount stays the same, but every year your income drops slightly, and thus every year your mortgage payment becomes a bigger and bigger portion of your income. A mortgage that is affordable when you buy it will one day become unaffordable for you.

I don't think that's what people intend, but that is the natural consequence of a deflationary currency.

Re:Please explain cryptocurrency

[JaredOfEuropa]

1) So?
2) Anyone can follow your transactions, not just the bank guys
3) Counterparty risk lies with the buyer. No fraud protection
Fiat money is hardly a scam. Central banks can and do manipulate the value of money, and generally they do so to keep inflation at healthy levels. They do not always succeed, but in general the value of your money is pretty stable when it's managed by a decent central bank.