Full disclosure: I don’t own any Dogecoin and probably never will. I only mine or buy technically innovative and functionally differentiated cryptocurrency.
Dogecoin, the alt based on a meme, is the bratty toddler of the crypto world. It runs around the room tugging on ladies skirts and biting men’s ankles, endlessly repeating its childish nonsense. Initially charming, Dogecoiners fast become irritating to the point that DOGE price crashes are met with a certain schadenfreude. Yet despite its hyped-up, saccharine shenanigans, Doge has lessons to teach the greater cryptocurrency community.
Dogecoin proves the importance of virality. Although it offers zero technical benefit over other cryptocurrencies, its appeal is all in its sticky memetics which evoke friendly and upbeat emotions. The creator wanted an altcoin without Bitcoin’s gangster connotations and the marketer nailed that with the “doge” brand. A cute dog babbling like an enthusiastic toddler – as conceptually distant as possible from Bitcoin’s serious and mature themes: cryptography, programming, anonymity, economics and black markets.
Dogecoin’s “identity” is both its greatest strength and Achilles heel. Although I suspect a disingenuous hand behind its “just for fun” design, this message brings a lot of casuals into the world of cryptocurrency. But hard-core coders and merchants are disinclined to touch it; the code is rehashed Litecoin and the long term value of a meme is dubious. According to one of the Bitcoin developers, Dogecode also has potential pitfalls for miners.
For now, popular appeal and a reputed million dollar backing prevail to keep Dogecoin in the first division of the cryptocurrency market cap rankings. Demographically, cryptocurrency is predominantly tech-pro adult males. Doge forsakes technical depth to speak to a broader audience. This hints at the secondary growth phase of cryptocurrency, in which “non-geeks” get involved. To further the network effect, crypto must both expand horizontally into new countries and vertically into new demographics.
Thus it makes sense for Dogecoin to position itself as “digital pocket money.” Dogecoin’s creators, initial adopters and big miners have made their easy money. I suggest they invest some of it into innovation if they want Dogecoin to survive. For example, by deliberately weakening the protocol’s anonymity and requiring third-party authorisation, parents could monitor and control their children’s spending. This anticipates a looming media controversy: children using cryptocurrency to buy weapons, drugs and porn online.
I’m all for financial privacy for adults but, even without accessing the darkweb, the anonymity of crypto allows minors easy access to cigarettes, alcohol and the like. That’s a problem it’s better to confront now. Geeky dads might want to introduce their children to the future of money, but hesitate when the first stories about Little Johnny and Girls Gone Bitcoin start hitting the media.
Dogecoin can carve itself a niche here. Instead of waiting for scraps from Bitcoin’s boardroom table or trying to compete with alts quickly evolving into untraceable shadow-money, Doge needs to limit and simplify its Litecoin feature set. A password-locked wallet mode which only allows payments to other identified children or community-screened list of merchants is the way to go. Mike Hearn could test out red-listing nannification in Doge, without anyone crying foul.
Third-party control and monitoring features, which would be the kiss of death to any other cryptocurrency, just make sense for “digital pocket money” intended for children. Either Dogecoin evolves into this space or a new alt will claim it in time. DPM anyone? I’ll draw the cartoon animals if someone else codes it.