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How Dogecoin changed my perspective on cryptocurrency

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Re: How Dogecoin changed my perspective on cryptocurrency

#141

Post by minimax »

kordless wrote: post #87
minimax wrote: post #83

Here we have more evidence of the miraculous ability of crypto currencies to turn unassuming computer programmers into economics experts. Let's take a look at some choice quotes. There’s no inherent reason that a piece of paper has a certain amount of value. There is a subjective reason, though: namely, that a large enough number of people agree that USD is a worthwhile commodity. They believe that for a number of re…

I'd argue that cryptocurrencies have a fair amount of commodity worth to them. The security of the coin is enabled by work put into the system by miners. Hypothetically there is some value in linking a commodity compute operation to crypto coin value. BTW, I looked to see if there was a correlation between oil commodity and USD, and here's what I found: http://en.wikipedia.org/wiki/Petrocurrency Note the bit about oi…

I spend a bunch of money buying electricity to run my electric kettle but that doesn't mean there's a huge market for selling hot water.

Re: How Dogecoin changed my perspective on cryptocurrency

#142

Post by Plasmoid »

minimax wrote: post #83

Here we have more evidence of the miraculous ability of crypto currencies to turn unassuming computer programmers into economics experts. Let's take a look at some choice quotes. There’s no inherent reason that a piece of paper has a certain amount of value. There is a subjective reason, though: namely, that a large enough number of people agree that USD is a worthwhile commodity. They believe that for a number of re…

> Currencies aren't like some weird subset of commodities.

Actually, currencies are considered to be the ultimate commodity. They don't degrade, they're 100% fungible, and they're instantly moveable worldwide. They're even susceptible to runs and shortages.

Think of it this way, what is the price of money? Is it $1 for a sandwich or 1 sandwich for a dollar? In this way, money has a price. So if the price of money goes up, by say everyone worrying that they'll lose their job and not spending anything, "prices" for goods will drop. Conversely, you can get runs when people think their money will lose value, eg during a war or disaster.

Re: How Dogecoin changed my perspective on cryptocurrency

#143

Post by ianpenney »

I'm starting to think there's a place for something like Dogecoin as a teaching tool. Although, heh, certainly not if there are too many people take it so seriously on either side of any debate about its value.

Sure, limited liquidity on exchanges like Cryptsy suggests that DOGE currently holds some* "real value" at present. I think it's best described as a high score contest. You can't sell a million USD worth of Doge to anybody right now, but that's not a bad thing! If a crypto-currency-game with a cute mascot gets more kids and teens into learning about computer science and math, we should find ways to keep it innocent and fun!

I remember running Distributed.net as a teenager, just to see how much processing power in keys per second I could personally muster. It was exciting because it taught the power and limitations of parallel computation.

To anybody who has managed to search and hack their way to mining their first Dogecoin (or anycoin) using only source code and blogs? Well done!!! You should consider this a great computing merit badge and maybe even a hacker rite of passage.

I hope future generations will have the same opportunity, community and incentives necessary to participate in the excitement of a gold rush, even if they can only make a actual pennies a day doing it. Having fun while learning at a young age is priceless.

(Looks like about 1.5 million DOGE / 1 BTC?)

Re: How Dogecoin changed my perspective on cryptocurrency

#144

Post by ChuckMcM »

minimax wrote: post #133
ChuckMcM wrote: post #127

Earlier quoted context omitted.

Perhaps we're not talking about the same thing. For any national currency, a bank has a way of resolving your request to exchange their currency for a local, more acceptable, currency. That is part of what the banking system does, and BitCoin eschews. In my fictional example, if an exchange didn't have deposits to cover the conversion they would go to their currencies central bank for the $90M and then exchange the B…

There are a lot of question marks in your comment and I'm sure some of them are meant to be rhetorical and maybe some aren't. Also you mentioned something about exchanges talking to central banks which isn't something that happens. Your fictional example is: I've got 150,000BTC, please convert that into dollars for me at the market rate. What? No worries I'll just wait here. You can wire the dollars to this account h…

I think maybe your question is just "What happens if you want to sell bitcoins and nobody wants to buy them?" and in that case the sellers are just screwed.

Nicely summarized. We are talking about the same thing.

That particular point is lost on a lot of people who are looking at Bitcoin. They see the surface aspect. Gee 1 BTC gets me $X and $X gets me 1 BTC. And from that they leap to 1 BTC is $X. That leap doesn't work because there is no equivalent of a market maker in BTC. I explain to folks who are wondering about BTC like this, "the more you want to trade the less they are worth, probably all the way to zero." So unlike Euros where 100 euros might be worth $132 and a million Euros $1.32M$ 100 BTC could be worth $X and a million BTC could be worth (small fraction x (10000 x $X)).

It is the difference between a currency and a collectibles market. Euros are the former, BTC are the latter.

Funny anecdote. My brother in law was buying property in europe and needed to do the transaction in Euros, prior to closing escrow he noticed that at the Hotel desk in the Caribbean where he was staying they had a better conversion rate than the bank had quoted him. The down payment was about $100,000 USD. On a whim he asked the desk clerk if he could change $100,000 USD to Euros and the clerk said, "Cash or check?" That one really through my brother-in-law for a loop!

I agree though, generally large foreign exchange transfers are scheduled things but they aren't all that complicated and seem to happen in the same 24 hr transaction window that other wire transfers do.

Re: How Dogecoin changed my perspective on cryptocurrency

#145

Post by trrocket »

minimax wrote: post #137
oafitupa wrote: post #104

Earlier quoted context omitted.

"oil tends to be priced in dollars internationally" And when that doesn't happen, suddenly they have the CIA overthrowing their leader, creating terrorists groups for false-flag operations, the US government spreading lies about WMDs, and then the entire army can go and fight the illegal (by international laws) war on terror. There should be a war on ignorance, so that we don't have to read comments like yours anymor…

When oil isn't priced in USD what do you think it will be priced in? And what do you think CIA will be able to do about it?

For many years it seemed likely it would be the Euro. At least Russia and Iraq circa 2002/3 publicly threatened making the switch, there may have been others. However, it seems that Iran stopped trading oil in USD (as of 2012) and apparently now uses a variety of other currencies[0], although I haven't looked into this to see if it actually happened yet. I am under the impression that China currently buys oil from Iran in Yuan/Renminbi.

I'd be interested to know if Iran went ahead with its plan to stop accepting USD altogether. I'd personally be surprised if threats and posturing regarding Iran's nuclear program went away without some sort of agreement on USD oil trade.

If Iran has stuck to its plan to stop accepting USD for oil AND the US backs off I think that signals a pretty significant loss for the US not just in terms of its relationship with Iran but ultimately, in the long term, in its attempts to remain a dominant force in the global economy. It would be a result of pressure from an international community that the US government feels it needs to keep on side, but also conversely an international community that may have an interest in reducing the economic dominance of the US.

Your second question is an interesting one. I think the US' next move - or Iran's (potentially changing its mind about USD oil trade) - will tell us how strong the US is at this moment in time. The position of economic & military dominance the US currently enjoys (which helps its "intelligence" agencies to get away with actions that would be otherwise considered acts of war) is bound to end at some point. I'm not willing to stick my neck on the line and predict the end of US hegemony is nigh (I'm not really a crystal ball kind of person) but I'd just say that the signs of a superpower fighting for its position should be evident. There will come a point where the US can no longer risk such interventions.

EDIT:

Having read a bit more (though not much, to be honest, so I'm happy to be corrected) it seems the Oil Bourse is for oil-derived products not crude oil (it actually says this on the Wikipedia article, doh). Also part of the agreement that reduced sanctions on Iran was to stop taking gold as payment for oil[1]. So there's no need to worry about the US' position in the world just yet.

Anyway, hopefully in 2014 some members of OPEC will be seriously advocating trading oil in dogecoin ;). To the moon!

0: http://en.wikipedia.org/wiki/Iranian_oil_bourse 1: http://www.bloomberg.com/news/2013-11-24/iran-agrees-to-hist...

Re: How Dogecoin changed my perspective on cryptocurrency

#146

Post by etherael »

minimax wrote: post #83

Here we have more evidence of the miraculous ability of crypto currencies to turn unassuming computer programmers into economics experts. Let's take a look at some choice quotes. There’s no inherent reason that a piece of paper has a certain amount of value. There is a subjective reason, though: namely, that a large enough number of people agree that USD is a worthwhile commodity. They believe that for a number of re…

> oil tends to be priced in dollars internationally, foreign countries hold lots of dollars as reserves

The first bit there has nothing to do with the US military, and the second bit there is not because of the first.

Repeat after me; Petrodollar warfare is just a paranoid conspiracy theory.

Re: How Dogecoin changed my perspective on cryptocurrency

#147

Post by steveklabnik »

ianpenney wrote: post #143

I'm starting to think there's a place for something like Dogecoin as a teaching tool. Although, heh, certainly not if there are too many people take it so seriously on either side of any debate about its value. Sure, limited liquidity on exchanges like Cryptsy suggests that DOGE currently holds some* "real value" at present. I think it's best described as a high score contest. You can't sell a million USD worth of Do…

I have actually thought the same thing. I think it makes for a really interesting teaching tool.

Re: How Dogecoin changed my perspective on cryptocurrency

#148

Post by code_duck »

CryptoJunky wrote: post #23

Personally I think Dogecoin is hilarious. I put together a guide for anyone that is interested in playing around with it. http://cryptojunky.com/blog/2013/12/19/getting-started-with-... Regardless the intention of Dogecoin, it seems to be working as an introductory cryptocurrency for a lot of new users. Can't tell whether or not it will stick around yet, but I've heard a lot of responses from users saying it is the f…

For some reason, I have seriously considered mining dogecoin despite having no interest in obtaining bit, alt, lite or other 'serious' coins.

What attracts me seems like a good question ponder. I feel like I have a chance to actually 'find' some coins. Whether successfully mining coins is truly more likely, or whether the doge coins mined would actually have more value than whatever other types of coin I could find with equivalent effort, I have no idea currently.

I've always liked the doge of shibe meme... And the absurdity of doge coin is highly appealing.

It seems that indeed, probably the first currency I will learn to mine is dogecoin.

Re: How Dogecoin changed my perspective on cryptocurrency

#149

Post by patrickg_zill »

minimax wrote: post #128
steveklabnik wrote: post #122

Earlier quoted context omitted.

It's all good. I enjoy your other comments on HN, i've upvoted many of them. I probably should have been working today rather than writing blog posts, oh well. I do not think paper currencies are bullshit. I really really hate it when people say 'fiat' as a derogatory term. I also agree that SF techies running into other people's fields is terrible. However, economics is a field that I have actually attempted to educ…

I think that you undervalue the role of imperialism with regards to the purchasing power of USD Point me to a historical example of the US government saying "Use dollars or else!" and I'll change my tune. I think foreigners use dollars because dollars are actually a really great currency relative to the local alternative ... or bartering (3 goats for 1 iPhone sort of thing). My objection to your argument is that USD…

You can only pay your taxes in Federal Reserve Notes (which are neither Federal, not backed by any reserve, and not notes).

THAT is why the income tax and US fiat currency were put into law at almost exactly the same time. Same as in ancient China and many other empires and countries - people can be forced to use fiat if they go to jail for not paying their taxes. Thus they have to work to get fiat.

Your statement about the Federal Reserve is laughable... I suggest some remedial learning, perhaps Ron Paul, or even just Zerohedge.com.

Re: How Dogecoin changed my perspective on cryptocurrency

#150

Post by Dylan16807 »

ChuckMcM wrote: post #144
minimax wrote: post #133

Earlier quoted context omitted.

There are a lot of question marks in your comment and I'm sure some of them are meant to be rhetorical and maybe some aren't. Also you mentioned something about exchanges talking to central banks which isn't something that happens. Your fictional example is: I've got 150,000BTC, please convert that into dollars for me at the market rate. What? No worries I'll just wait here. You can wire the dollars to this account h…

I think maybe your question is just "What happens if you want to sell bitcoins and nobody wants to buy them?" and in that case the sellers are just screwed. Nicely summarized. We are talking about the same thing. That particular point is lost on a lot of people who are looking at Bitcoin. They see the surface aspect. Gee 1 BTC gets me $X and $X gets me 1 BTC. And from that they leap to 1 BTC is $X. That leap doesn't…

>It is the difference between a currency and a collectibles market.

What, the size? I bet there are currencies from small countries that are harder than bitcoin to exchange without crashing the price. I don't think your distinction is a good one.

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