I don’t know what Bitcoin will end up being. It could be a currency or a commodity, a fad or a revolution, the future of money or a total waste of money. What I do know is that Dogecoin could be just the same, now that it's joined a countless legion of so-called “altcoins” in the wake of Bitcoin’s skyrocketing price.
Yup, it’s the first digital currency based on an internet meme—not just any internet meme, mind you, but the 2013 meme of the year. Very currency. Such crypto. Wow.
Sorry for that, but it’s also kind of the point. “Is this supposed to be retarded on purpose?” wondered a confused onlooker on the BitcoinTalk forums. If Bitcoin is a compelling concept, Dogecoin is totally stupid. Even so, it's still proving successful in the midst of the cryptocurrency craze. In just 24 hours, the mining difficulty for Dogecoins increased thirty levels, according to one impressed, self-described fanboy. That means a whole lot of people are trying to mine their own Dogecoins. Believe it or not, Dogecoin has gone viral.
Indeed, after a week of existence, Dogecoin is already the 24th most valuable altcoin, with a total market value of $1,621,559 based on its price on the exchange CoinedUp, though it might be worth even more elsewhere. On eBay, someone just paid $600 for 1 million Dogecoins. Then there’s the guy who said he'd buy up to 0.2 bitcoins of dogecoin on reddit, which comes to about $150, and which solicited offers of a million dogecoins or more. In all, not bad for what is clearly supposed to be nothing more than some satirical levity. Really, this all sounds a bit like the early days of Bitcoin.
So what does this say about Bitcoin? Is Bitcoin any different from Dogecoin, beyond its philosophical underpinnings and first-mover status? Sure, like all the other altcoins, Dogecoin offers some variability, like a theoretical max of 100 billion versus 21 million, and a different proof-of-work algorithm, but we’re reaching Furby levels of ridiculousness here.
As absurd as a currency named after a dog meme is, it's more similar to Bitcoin than many BTC fans may care to admit. They're both currencies created by random people that, lacking a central regulator, are susceptible to high volatility. Bitcoin does have a more established infrastructure, a more heavily-studied protocol, and larger market, which is key to its stability. But there are also plenty of signs that the current bubble’s momentum is beginning to wane, following tempering statements from various governments including China, with its price down nearly 40 percent from its all-time high of over $1,200.
At $735 a coin at the time this article was published, a bitcoin is still worth plenty of scratch. Meanwhile, Coinbase, the US-based startup that allows customers to buy and sell bitcoins, just raised another $25 million from Andreessen Horowitz, a hefty bet by Silicon Valley that bitcoin may yet survive long enough to be useful. And if that’s the case, then buying a few Dogecoins might not be as stupid as it seems.