By Bjorn Slater, Business and Ads Manager
In the online currency world, there’s a new dog in town. Programmer Billy Markus created Dogecoin — pronounced DOHJ-coin — in December 2013, and in three months it has gathered a faithful online following dominated by users of Reddit, a social news and entertainment website.
The new cryptocurrency — a digital currency that uses cryptography for security — is valued at $0.78 per 1,000 Dogecoins. Dogecoin started as a parody of Bitcoin, the first cryptocurrency that surfaced in 2009.
Dogecoins feature the image of a perplexed Shiba Inu — a Japanese dog.
Since then it has grown to be the most traded cryptocurrency of all time in terms of volume, with more than 61 billion Dogecoins in circulation.
Since each Dogecoin is only worth a fraction of a penny, it is mostly used as an online tipping system for Reddit.
Users of Reddit can traditionally give each other “upvotes” and “downvotes” by clicking the corresponding arrow next to the posts of other users and can easily create posts themselves.
Now, Dogecoin has entered the picture, and users can give each other a few Dogecoins for a good post or comment.
The cryptocurrency is not practical for becoming rich by hoarding—as many did with Bitcoins when they skyrocketed— due to the high volume and low value.
But 27-year-old entrepreneur Matt Thompson disagrees.
According to CNN, he is offering to sell his vacation home for 100 million Dogecoins, or about $78,000, as of March 17.The entrepreneur has proven the usefulness of cryptocurrencies to small business owners.
Thompson’s success has been in selling games and electronic gaming accessories online using Bitcoins since 2011, and he started using
Dogecoins just two days after they became available online. He’s managed to use online currencies to sell inventory as far away as China, saying it’s “safe and easy with minimal fees.”
Dogecoin isn’t the number one cryptocurrency — Bitcoin still has the largest user base and is more widely used for larger transactions.
The average Dogecoin transaction is about $106, while the average Bitcoin transaction is more than $9,300. Dogecoins are mainly being used for fun little things such as buying computer games, which according to Policymic.com, is just what the creators intended
Bitcoin has a bit of a dark past. It was used commonly on The Silk Road, an online exchange where users could buy illicit substances.
Dogecoin wants to keep away from that kind of image, and users have been very supportive. Dogecoin Foundation, a nonprofit organization founded by the creators of Dogecoin, said the community is what really makes this cryptocurrency special.
Ben Doernberg of the Dogecoin Foundation, said most of the competitors that have sprung up around Bitcoin are just intended to make a lot of money.
Meanwhile, Dogecoin fundraisers managed to raise more than $30,000 to help send the Jamaican bobsled team and an Indian luger to Sochi to compete in the Olympic Games.
Dogecoin is still in its infancy—Bitcoin has been around for about five years while Dogecoin has only existed for three months. Bitcoin has shown that cryptocurrencies can be incredibly valuable.
At one point in early December, Bitcoins were valued at more than $1,200 each.
Dogecoin’s high volume and low value at this point in time make high value Dogecoins seem unlikely, but a lot can happen in a few year’s time.
Who knows, with users like Thompson blazing the trail for high value Dogecoin transactions and an active, supporting community, it could happen a lot faster.
Information collected from http://dogepay.com/, http://www.techopedia.com/definition/27531/cryptocurrency, https://bter.com/trade/doge_cny and http://bitcoincharts.com/charts/bitstampUSD#rg120ztgSzm1g10zm2g25zv. ◼︎