Within the past couple of weeks, the Dogecoin community has done something incredible: Two teams of athletes, one from Jamaica and another from India, are headed to the 2014 Winter Olympics, which kick off Friday in Sochi, Russia, thanks in large part to donations of the meme-themed virtual currency from its community of so-called “shibes.” This charitable image of Dogecoin’s community has helped rocket it to unprecedented heights in the world of virtual currencies – but also leaves it vulnerable to wolves that could devour its good name.
Launched in early December 2013, Dogecoin is a version of another popular digital currency called Litecoin (which, in turn, is a fork of Bitcoin). Ask a technical person what makes Dogecoin special compared to other virtual currencies, and they’ll tell you one thing: Nothing much. In fact, cryptocurrency purists argue that Dogecoin should be far less valuable than, say, Litecoin because its creators capped the total number of Dogecoins that can ever be “mined” at 100 billion. Bitcoin, by comparison, tops out at slightly less than 21 million coins, while Litecoin’s cap sits at 84 million.
“It’s like every week things just go to a totally new scale.”
Thing is, none of that matters. There are more than a hundred “altcoins” out there, and nobody outside of the cryptocurrency inner circle is talking about any of them. Dogecoin has momentum.
Which brings us back to the Olympics – or, rather, charity. The Dogecoin community has, quite wisely, latched onto the fun-loving, lighthearted, and generous nature on which Dogecoin was founded and turned it into a marketing powerhouse. Funding Olympic athletes – especially the Jamaican bobsled team, which shares Dogecoin’s whimsical underdog image – is not simply an act of charity; it is blatant self-promotion. And it seems to be working.
Dogecoin’s trading volume (the number of Dogecoin’s transferred from one “wallet” to another) far surpasses any other cryptocurrency – meaning people are using Dogecoin more, if only because each coin is worth so little. But people seem to be interested in the social aspect as well: The Dogecoin subreddit has risen to nearly 50,000 subscribers in a single month, and is consistently in the top 50 most active subreddits (out of thousands). Meanwhile, Reddit’s Bitcoin community just recently passed the 100,000-subscriber threshold – however, it took years to get there. Admittedly, there are plenty of other forums for Bitcoin enthusiasts, while /r/Dogecoin is the central meeting grounds. This may explain the growth disparity, but the metric is still telling.
Facilitating the Dogecoin community’s seemingly insatiable desire to give away its virtual currency is the Dogecoin Foundation, a non-profit founded by Dogecoin’s creators, Jackson Palmer and Billy Markus. The Dogecoin Foundation was central to funding the Jamaican and Indian athletes. And it is working hard to keep the momentum going.
Ben Doernberg, an active member of the Dogecoin Foundation and moderator of the Dogecoin subreddit, has had a hand in a number of Internet-fueled phenomena – for example, he was a lead organizer of the Restore the Fourth anti-NSA protest in New York City. He has also managed to become an expert in cryptocurrencies over the past few years. And to him, nothing compares to the energy percolating around Dogecoin.
“I’ve been involved in several sort of ‘Internet’ things, but this is just nuts,” says Doernberg in reference to Dogecoin. “It’s like every week things just go to a totally new scale.”
The question is whether Dogecoin can maintain its momentum. The fun nature of Dogecoin has so far managed to successfully set it apart from Bitcoin, which enjoys the greatest name recognition but has long been associated with a nefarious underworld. That nasty image was further fueled just this week by the arrest of Charlie Shrem, one of Bitcoin’s most prominent evangelists, who is charged with laundering money through his Bitcoin exchange, BitInstant, for use on now-defunct drug marketplace Silk Road. Guilty or not, Shrem’s arrest doesn’t look good to casual passersby.
The question is whether Dogecoin can maintain its momentum.
Dogecoin’s greatest vulnerability, then, is not simply a matter of protecting users’ digital wallets from hacker thieves, but protecting it from the darker sides of human nature: Greed, malice, and our tendency to use our resources to buy things that are bad for us. There aren’t currently any online drug dealers selling crystal meth for Dogecoin (at least not that I know of) – but the moment such a thing becomes a local news headline, the good work of Dogecoin will no longer seem so pure.
For now, Doernberg and the rest of his fellow shibes at the Dogecoin Foundation plan to plow ahead with new projects. They have at least one secret charity project in the works, and others in the pipeline, each of which will help to further solidify Dogecoin as the cryptocurrency of the good guys.
“Clearly, people are desperate to give their Doge away,” says Doernberg. “So, we want to keep helping with that.”
I wonder, though: As Dogecoin’s value rises, will people remain so willing to give it away? If so, it may very well launch all the way, as the Doge-faithful say, to the moon.