The Guy Who Ruined Dogecoin
J Thoendell stashed this in Cryptocurrency
“In the beginning, everything was awesome and hilarious,” said Ben Doernberg, a research assistant at Harvard University who was a long-time board member on the Dogecoin Foundation—the volunteer group that organizes charitable efforts by the Dogecoin community.
“The people who got into it were goofballs, whereas the previous cryptocurrencies had attracted people who just wanted to get rich,” he said.
Unlike Bitcoin, which currently costs about $277 for a single coin, Dogecoin is affordable: 100 dogecoins cost about two cents. This makes playing with the currency easier—users tip fellow Redditors (where the Dogecoin community largely lives) for funny comments, sharing important news, or just for the hell of it. And they can easily rally funds for good causes, because even those who are tight on money can afford to purchase some dogecoin to toss into the pot.
And the Dogecoin community rallied around lots of charitable causes. They raised the money needed to send the Jamaican bobsled team to the winter Olympics. They donated $25,000 to a UK service dog charity. They collected $30,000 to help people in Kenya get access to clean drinking water.
“Those were some of the coolest things we did,” Doernberg told me.
As the market grew, it created fertile ground for new businesses to emerge. One of the biggest players early on was Moolah, a cryptocurrency exchange run by someone who called himself Alex Green, and used the Reddit handle Moolah_.
Green rose in popularity by giving away dogecoin liberally. Reddit posts and reports from those in the community show he would go on tipping sprees, tossing hundreds (and sometimes thousands) of dollars' worth of dogecoin at strangers for no reason. He would give generously to the community’s charity campaigns: $2,450 in dogecoin to a cancer charity and $2,927 to support the community’s efforts to get a NASCAR branded with the Dogecoin image. They were successful; by May, the Dogecar wasburning up the track at Talladega.
It's discouraging that scoundrels took advantage of the collective kindness of the community.
For the past few months, the Dogecoin community has been left picking up the pieces. Many have abandoned the currency altogether, others are more suspicious and less generous with their coins. They chased their tails trying to figure out who or what was to blame. The whole structure of the community was naturally vulnerable: based on trust and kindness, and hosted on an anonymous platform.
“Bitcoin has this well-earned paranoia about strangers on the internet, but Doge, the meme, is this hopeful, optimistic world view. It turns out, that’s very attractive to predators,” Doernberg told me.
Still, Dogecoin is one of the top 10 coins on the market (as of publication, it had the sixth-biggest market value). There are pressures facing the entire cryptocurrency market, yet Dogecoin has endured with the best of them.
This week, a user re-posted a letter by Dogecoin co-founder Billy Markus from early last year, when the currency was enjoying its height of popularity.
“Dogecoin is meant to be a fun cryptocurrency, one that encourages people to tip and to learn and teach this technology. It also, like every cryptocurrency, can have a maddeningly capricious nature. The novelty will not last forever, but if you want the community to last, that is where you come in,” Markus wrote.
“Stay positive. Keep doing awesome things. Lead by example. No matter what happens, never lose sight of the things that make Dogecoin worthwhile for you.”