01.19.14 11:45 AM ET
Dogecoin, Coinye, & Catcoin: A Dummy’s Guide to Cryptocurrencies
If you’re wondering what the hell cryptocurrency is: join the club.
While Twitter, and the internet, pretends to understand Bitcoins or “altcoins” or whatever damn coins exist on the computer but not in my wallet, the truth is that millions of us are totally clueless about these market mavericks purporting to revolutionize economic life as we know it.
Crypto-bod Ben Doernberg explains: “Bitcoin was started by hardcore computer experts as a deadly-serious attempt to change the economic and political landscape, and it quickly attracted a core group of libertarians and cryptography enthusiasts.” Indeed, the digi-currency has enjoyed a meteoric rise to prominence since its 2009 inception, with 1 BTC now worth nearly $1k. But, as with all great success stories, one inspired idea paves the way for an onslaught of wildly inferior ones, and the daddy of altcoins has spawned hundreds of copycats. Simply being a decentralized, peer-to-peer currency was soon no longer enough, and lo and behold—a wave of digital money meme-ry was born.
Yep, the fiscal potential of altcoins now plays second fiddle to the kitsch factor, spearheaded by the introduction of Dogecoin last year. So here’s a guide to some of the key players in the cryptocoin market (plus some others that deserve a spot for being sufficiently weird):
It’s only right to begin this list with Dogecoin, the currency based on 2013’s Meme of the Year (no really that’s a thing now), Doge. A Shiba Inu pooch with a poor grasp of spelling may seem like a peculiar choice for a meme, but self-confessed “shibes” all over the globe have taken the little fuzzmeister into their hearts—and now their bank accounts—with the introduction of Dogecoin. The currency’s co-creator Jackson Palmer muses: “I think the real reason for Dogecoin’s success is that it’s added a friendly face to the notion of a global, digital currency—in turn, we’ve built a large passionate community of users, for many of whom Dogecoin is their first experience with cryptocurrency.”
The canine-faced coin functions less as a means of turning a profit, but rather as a way of ‘tipping’ fellow internet users in online games or social networks. Billy Markus —Palmer’s partner in coin crime—estimates that their creation has triggered a steep rise in new cryptocurrencies making their way to market, with anything from five to 15 being launched every day. Compare this to the fact that less than one per week were circulating before Dogecoin came out, and it’s clear that this cutely packaged computer cash packs a serious punch.
While some might question why we need to brand these digital dollars with memes, Brett Scott, author of The Heretic’s Guide to Global Finance, believes that they are crucial to a cryptocurrency’s success by provoking an emotional response from its users: “Any belief in currency—whether it be a paper note, or a piece of metal, or digital bytes, is essentially irrational and requires some emotional leap of faith.” Scott’s belief in Dogecoin is so solid that he accepts it as payment for his book, adding: “I believe the symbol has enough emotional power to form the basis for a future cultural system of value.”
And when it comes to cultural value, we really need look no further than Kanye West, the inspiration behind 2014’s first major cryptocurrency, Coinye West. ‘I don’t know what’s better, gettin’ laid or gettin’ paid,’ rapped the self-proclaimed “nucleus” in This Way, and it seems the currency’s creators are trying to experience at least one of those things for the first time by gathering some Coinye capital.
The altcoin launched in a blaze of legal fury last week after KW’s lawyers tried to shut it down, irate that the sole product in the world West doesn’t already have his own line of would go to market with his name on it. “It remains to be seen if Coinye will be much more than another PR black eye on the cryptocurrency community at large,” says Rackspace developer Jesse Noller. “It may be a good idea, but they launched it as a pure marketing jump after seeing the success of Dogecoin. It was a classic pump and dump: hype, pre-mine the coin, launch, cash out.”
While Coinye’s mascot has now inexplicably morphed into a blinged up ‘n’ bloated Kanye fish face, the entire messy enterprise has given cryptocurrency naysayers extra ammo in denouncing digital dollars. “Bitcoin [and its variants] has become synonymous with everything wrong with Silicon Valley: a marriage of dubious technology and questionable economics wrapped up in a crypto-libertarian political agenda that smacks of nerds-do-it-better paternalism,” blasts former Twitter engineer Alex Payne. Moral of the story: bitcoins bad, cute coins good.
And so explains the birth of Catcoin, the latest creation hell-bent on knocking its canine counterpart off its perch. Relying on the fluffiness factor to give them a popularity boost, the burgeoning currency is already attempting to scoop up Dogecoin defectors on reddit and increase its market value. Most of these bitcoin wannabes fall apart soon enough, though, and it remains to be seen whether Catcoin will really make its mark. “It’s completely impossible to say whether there is room for multiple cryptocurrencies to stick around,” Doernberg elaborates, “but if there is, Dogecoin or another coin like it has strong potential as a family friendly coin used in online games and to tip on social networks.”
While cryptocoin defenders are keen to extol the virtues of their online community, it does raise (even more) questions about what the actual point of all this pretend computer cash is. Is it intended as an economic game-changer that people can make real money from, or just a way of dishing out likes or recommends with a furry mascot attached? And, if it’s the latter, why name the currencies something so closely aligned to the libertarian ideology of bitcoin? Such questions, very confuse, etc.
Let’s move back from the deep and meaningful to the sheer ridiculous, which has helpfully been bestowed unto us by the creators of RonPaulcoin. Yes, that’s correct, a digital currency dedicated to the “intellectual godfather” of the Tea Party. The senior political Paul has been outspoken in his praise of bitcoin, telling CNN that it could “destroy the dollar” and cause a serious fiscal shake-up, so it seems like a logical step for him to be the face of one of its newest revamps. With a current market value of more than $28 per RPC and a ranking as the 47th most valuable of the 71 cryptocurrencies, this coin is climbing the ladder pretty quickly.
But if RonPaulCoin is the start, where does this all end? With Obama bucks? De Blasio dollars? Joe Biden Gs? You get the picture, and it’s not a pretty one. (Well, it will be if Joe B’s Gs takes off. Here’s hoping).
There’s only one logical move to make after RonPaulcoin: Sexcoin. This one seems to have a shred more purpose than its bitcoin-esque bedfellows as it promises a more private means of online transaction between performers, producers and consumers of adult material. It can be a little hard to take a cryptocurrency whose tagline is ‘Super Sexy and Delicious’ seriously, but with a current market capitalization ranking of 30, its performance isn’t too shabby.
So where do we go with all of this screen money, and is it really likely to overthrow our economic infrastructures anytime soon? If anything, the deluge of heavily orchestrated ‘quirkiness’ these groups are trying to inject into the market is something of a turn off, and the regular risk these currencies seem to be at from hacking doesn’t do much to restore my faith that altcoins are just a bunch of computery nothingness. “I agree with the naysayers—in fact, I pretty much am a naysayer,” concludes Noller. “But somewhere in between thinking cryptocurrencies are the future and cryptocurrencies are neckbeard monopoly money is the truth. Just don’t invest real money. Please.”