Will Dogecoin Be the Next Bitcoin? Or Maybe Something Better

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There's a new cryptocurrency on the virtual block called Dogecoin, with a cute Japanese dog for a logo. But while its Shiba Inu mascot is almost too adorable to take seriously -- and the currency itself started as a joke four months ago -- Dogecoin (pronounced DOHJ-coin) is now looking to challenge bitcoin and become a legitimate, widely accepted method for buying things online.

Having a cheerful, over-the-top dog meme as its mascot shouldn't cause people to take it less seriously as money, says Ben Doernberg, a volunteer on the board of directors of the Dogecoin Foundation, a nonprofit organization that started in December 2013. Alexander Hamilton, Abe Lincoln and George Washington are portrayed on our currency looking stern and sober for a reason: To instill confidence that those bills and coins will have value for years to come.

"For young people who spend all of their time on the Internet, I don't know that it's any more weird to have a guy from the [1700s] there than a dog," Doernberg, 25, says of U.S. currency. "I don't think it makes any more sense to have Ben Franklin there than Doge."

Like many other cryptocurrencies, Dogecoins are mineable, meaning you can acquire them without paying in cash, as long as you have a reasonably muscular computer equipped to do some number-crunching with its spare power. There are already more than 64 billion Dogecoins in circulation, worth more than $34 million. The popular bitcoin, which leads all cryptocurrencies with a $6 billion market cap, has a current supply of 12 million.

One bitcoin costs $529.50, while one Dogecoin is worth .059 cents, according to recent prices. Or, to put it in more relatable terms, $1 will buy you 1,691 Dogecoins.

That's quite a low barrier to entry compared to bitcoin, which dovetails with the idea that Dogecoin is meant to be used as currency and not as a speculative investment. "It's not as focused as something you hold for 10 years and hope the price goes up," Doernberg says.

Dogecoins are gaining popularity. A man in Wisconsin is selling his vacation home for 100 million Dogecoins. That equated to about $135,000 in early March, but this weekend, it only amounted to around $59,000. PC builder Xidax accepts Dogecoins, and they're accepted by GoCoin for international payments.

Dogecoin supporters also recently raised $50,000 in the digital currency to sponsor NASCAR driver Josh Wise in a May 4 race at the Talladega Superspeedway. The sponsorship fee was raised in Dogecoins, which a private buyer bought for $50,000, says Kevin Dusenberry, who managed the NASCAR fundraiser for Dogecoin.

"Josh is the true embodiment of what the community represents," Dusenberry says. "He's an underdog and the Dogecoin is an underdog."

Wise, 31, of Charlotte, N.C., says he's thankful for the sponsorship, and thinks they picked a good race because drafting is allowed at Talladega, which should help an long-shot racing team like his.

"Talladega is really a race that levels the playing field," he says.

Having the gold Dogecoin logo as the dominant image on his car is something that Wise, and much of the general public, will view as a bit of a surprise. "Until a week ago, I had no idea it even existed," he says of Dogecoin.

Whether using a Doge to tip someone online because you like their video, or buying a song or something else online, the ultimate goal of the people behind Dogecoin is that we should all be able to use it easily for small, daily purchases such as a newspaper or going to a movie, and not as a speculative investment for your child's college fund, Doernberg says. "The goal is to actually be the online currency," he says.

"It's just so much easier than putting in a credit card," he says.

A problem with credit cards, he says, is that chargebacks and the standard 2.9 percent fee that credit card companies charge merchants prevent many businesses from accepting them for small purchases.
The New York Times, for example, doesn't charge a few pennies to read a story online, but it does charge a monthly fee for a digital subscription.

"The question with all these digital currencies is how do you get to the point that you can take it anywhere and someone will accept it?" Doernberg asks.

Buying Dogecoins is easy enough. You can transfer money from your bank account to a virtual wallet full of Doges. Dogecoin also has its own virtual wallet. Trading them back for dollars, however, is more difficult, Doernberg says, though there are markets such as Moolah that allow it.

A problem with cryptocurrencies is that because they're so new, they often gain value fast and can become significantly more expensive to buy from week to week, says John Arsenault, a Denver lawyer who represents a VPN company that accepts cryptocurrencies. Wide swings in value don't happen as much with currencies backed by governments.

Such price changes can make cryptocurrencies more popular with speculators, Arsenault says. "A lot of the value of a cryptocurrency is based on the Internet's perception of it," he says.

And here's another fun twist to using virtual currency: The IRS recently ruled that such payments are considered property and should be reported as income, making them subject under some circumstances to the capital gains tax. If you're making money as the market for a virtual currency rises, you'll have to give some of it to Uncle Sam. And no, the federal government won't accept Dogecoins as payment for a tax bill.


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8 Comments

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cryptic.hermit

Get yourself a few video cards.
Buy a Gold Digger from Mountain Mods to house them in -

http://www.mountainmods.com/u2-ufo-gold-digger-gpu-mining-case-p-724.html

get digging while the diggings good. reward for mining is about 12 days from getting halved. To the moon.

April 15 2014 at 3:11 PM Report abuse rate up rate down Reply
Kevin Donovan

This was the topic of discussion today http://www.tikr.me/dogecoin-halving/21881

April 01 2014 at 10:33 PM Report abuse rate up rate down Reply
Richard Townsend

I honestly believe dogecoin is going to be the next big cryptocurrency, so I ordered 150k dogecoin from http://dogecoinuk.com a few months back.
If dogecoin rises to even 10cents per coin my stash of dogecoin will be worth approx $15,000. I really do believe it will be going much higher than this considering the exposure it is getting... To the MOON!

April 01 2014 at 3:58 PM Report abuse rate up rate down Reply
Joe Sharp

There's another super easy and safe place to buy dogecoin that also works outside of the US dogeforsale.com it's a peer to peer marketplace with seller and buyer reviews and ratings *disclaimer* I helped create the site.

Read a little more about us https://www.dogeforsale.com/page/about-us

Happy to answer questions.

joe@dogeforsale.com

April 01 2014 at 11:03 AM Report abuse rate up rate down Reply
John

DogeCoin: To the Moon?
http://www.coinwrite.org/articles/coins/dogecoin-moon/

March 31 2014 at 11:32 PM Report abuse rate up rate down Reply
dsepa61024

Pyramid Schemes and Ponzi Schemes are what we do best! Remember 2008 when the banks where de-regulated when Goldman convinced Billy Boy to repeal Glass Steegal in 2000 and George W opend the trojan horse. Seams like being honest just doesn't pay yet we try to CON the world to believe we are? LOL

March 31 2014 at 4:31 PM Report abuse rate up rate down Reply
petroni912

All these cryptocurrencies are nothing new. A friend of mine, Sue in Hawaii devised the universal currency back in 2003, the Diddlysqwott. Recognized world wide, the Diddlysqwott is the true trans-national currency. Everyone knows what they are, what their worth from day to day and wallets and purses around the world have plenty of them. And you don't have to worry about crooked speculators or shady managers embezzling them.

March 31 2014 at 4:18 PM Report abuse -1 rate up rate down Reply
Happy-Bday ugly

Gee, looks like someone is trying to do away with our current money system, hope we are not that dumb.

March 31 2014 at 3:44 PM Report abuse +1 rate up rate down Reply
stupidestemail

Dogecoin is the easiest way to conduct person to person transactions without being physically next to one another. For comparison:
1. Bitcoin - too pricey to buy into. math gets too hard for small transactions.
2. Credit cards & Paypal - banks take 2-5% of your money
3. Cash - not reliable when sent through mail
4. Checks - Take too long to send/clear

It's clear that the future of small purchases is Dogecoin.

March 31 2014 at 3:03 PM Report abuse +2 rate up rate down Reply
johnny1888

This is straight out og 4Chan /b/.

March 31 2014 at 10:24 AM Report abuse -1 rate up rate down Reply