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How Dogecoin changed my perspective on cryptocurrency

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41–50 of 173 posts

Re: How Dogecoin changed my perspective on cryptocurrency

#41
Here's an interesting observation I made.

You can instantly become both the world's richest and generous person. Take a friend that you trust, and sell him a piece of paper for $10000000000000 billion dollars. Suppose he agrees (even if he doesn't have that money right now, he/his descendants can pay it off over their lifetimes). Now you have $10000000000000 billion dollars of wealth. But, you decide to be generous and give $10000000000000 billion dollars to your friend, for free (which in turn allows him to pay off his debt to you).

Basically, two things happened simoultaneously: nothing, and a two-way exchange of $10000000000000 billion dollars. Which, if you report to the government, you both owe a lot of taxes now because you've had a lot of income.

Re: How Dogecoin changed my perspective on cryptocurrency

#42

There is one other aspect here I find very interesting, and it has to do with the efficient market hypothesis. The fact that people are buying Dogecoin simply because it is a fun internet meme kind of flies in the face of people who still view the price of financial assets as mostly rational, value-based prices, that can be deconstructed along the lines of asset-based valuation, financial ratios, available informatio…

Dogecoin is a good, not a medium of exchange. Why do people buy iPhone apps? iPhone apps don't even have resale value.

How is Dogecoin a good if its only feature is the mode by which it is exchanged?

Disclaimer: I possess Dogecoins

Re: How Dogecoin changed my perspective on cryptocurrency

#43
post #42

Earlier quoted context omitted.

Dogecoin is a good, not a medium of exchange. Why do people buy iPhone apps? iPhone apps don't even have resale value.

How is Dogecoin a good if its only feature is the mode by which it is exchanged? Disclaimer: I possess Dogecoins

It makes the people that hold it laugh, which is valuable to them.

Re: How Dogecoin changed my perspective on cryptocurrency

#44

Here's an interesting observation I made. You can instantly become both the world's richest and generous person. Take a friend that you trust, and sell him a piece of paper for $10000000000000 billion dollars. Suppose he agrees (even if he doesn't have that money right now, he/his descendants can pay it off over their lifetimes). Now you have $10000000000000 billion dollars of wealth. But, you decide to be generous a…

I think that's where the IRS' definition of "fair market" value comes into play. They'd only tax you on the market value of that piece of paper... which is $0.

Re: How Dogecoin changed my perspective on cryptocurrency

#45

There is one other aspect here I find very interesting, and it has to do with the efficient market hypothesis. The fact that people are buying Dogecoin simply because it is a fun internet meme kind of flies in the face of people who still view the price of financial assets as mostly rational, value-based prices, that can be deconstructed along the lines of asset-based valuation, financial ratios, available informatio…

People have always bought silly trinkets and useless things, what's wrong with that? This doesn't "fly in the face" of anything, the price is being set by supply and demand. It just so happens memes can create demand.

The people actually investing in dogecoin are doing so because they believe the price is going to go up, the same as people who invest in anything else. They will lose or gain money depending on whether they are right or wrong.

Re: How Dogecoin changed my perspective on cryptocurrency

#46

Earlier quoted context omitted.

except they do have a resale value.

Try reselling Angry Birds.

sure - apps dont have a resale value. but that doesnt mean video games in general dont. You're just providing an exception to a rule that's all. Also - you're defying your original point of something being a good. Angry birds is not a good - its a service.

Re: How Dogecoin changed my perspective on cryptocurrency

#47

There is one other aspect here I find very interesting, and it has to do with the efficient market hypothesis. The fact that people are buying Dogecoin simply because it is a fun internet meme kind of flies in the face of people who still view the price of financial assets as mostly rational, value-based prices, that can be deconstructed along the lines of asset-based valuation, financial ratios, available informatio…

Someone might rightfully ask the question, "Should I invest in Dogecoin?", and at this stage of our financial markets, I really don't have a good answer for that.

This is where recognising a distinction between investing and speculating comes in handy. It's quite possible to speculate in dogecoin (relying on greater fools coming after) in the short term and make some money. In the long term it is extremely unlikely to have any value at all, so if you take investment to be long term search for value, the answer to should I invest is no.

The interesting thing about fiat (all our currencies at this point, including crypto ones, unless you want to quibble over semantics), is that it depends on confidence for its value. Without confidence it is worth nothing (Assignats, Zimbabwean dollars etc). This realisation doesn't give me great confidence in Bitcoin or any of its spin-offs though. It's an interesting experiment and noteworthy, but I think fatally flawed as a currency or an investment because of the explicit rejection of verified identity, regulation, and inflation and its attempts to emulate paper cash.

Perhaps the next currency to emerge will be corporate sponsored rather than state-sponsored, as corporations are still rising in power over states, but it will be a very interesting century, because most of the national currencies probably won't survive it, and by 2100, no-one will be using physical tokens for payments (cash). States will naturally resist any encroachment on their power over currency and taxation, which up to now has been absolute. I expect any stateless currencies which do manage to rival say the USD to come under heavy pressure from both speculators like Soros, and currency blocs who perceive a threat to their monopoly on trade.

Re: How Dogecoin changed my perspective on cryptocurrency

#49
post #12

Totally agree, as a Bitcoin fan who also sees Dogecoin as a positive sign. Some Bitcoin boosters believe "there can be only one" winning digital currency, and hope/predict it will be Bitcoin. I instead expect many to be tried, most to fail, but a wide variety to survive and live in strange, ever-changing symbiosis. They're just so easy to bootstrap, now, and the possibility/exploration space is so large. Bitcoin migh…

Yup. The lighthearted nature of both the coin and the community is drawing a lot of attention from people who haven't cared about cryptocurrency before, including myself. It shouldn't be that surprising to anyone on Hacker News: marketing is important. Bitcoin was all "we're going to destroy fiat currency, fuck the government." Dogecoin is "hey lol isn't this silly? Have some coins." It's no wonder that people are re…

I really, really like you and really respect you, but a lot of this is projection:

>Bitcoin was all "we're going to destroy fiat currency, fuck the government." Dogecoin is "hey lol isn't this silly? Have some coins."

Re: How Dogecoin changed my perspective on cryptocurrency

#50

Earlier quoted context omitted.

Why dogecoin? Why not megacoin, that's also pretty absurd.

> Megacoin , Your Global Currency. Your Modern Wallet. Global, Anonymous, Secure. Sounds pretty serious business to me.

Are there any crypto-currencies that are not anonymous? I like secure, modern, low cost transactions, but I don't like the anonymity. I want a currency where everyone knows how much I spent, what I bought, and it applies to everyone. Does that exist?
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