The most valuable Tweet in history


Or - Could this be the Bitcoin your mother uses?
 






So a new crypto-currency, conceived as a joke last Christmastime by a guy in Australia based on a silly internet meme from 2013 is becoming the way people give friendly, real-money tips to each other online, managed to send the Jamaican bobsled team to Sochi, will have a fully funded Nascar drive at Taladega sporting their doggy logo, has provided clean drinking water to people in need and just may be one more reason for the big banks to be worried about their place in the world.

Wait - what?

But back way up for a sec. Let me start from the beginning.

Yesterday, someone in the office lumped me in with "older people". It was traumatic. And made worse by the fact that once she'd realised what she'd done, she did the 'oh' face and covered her mouth while making "I'm sorry" eyes.

She was talking about funky, app-driven customer experience concepts for self-service in restaurants, and whether they could be successfully applied to fine dining as well as to lower-end and fast food options, and came out with a line about how "older people tend to prefer traditional service" while gesturing to me! ME! (And I'm only six years older than she is, it turns out. Better start moisturising, I suppose.)

But I got my own back. As I was writing this, I asked her what she knew about crypto-currencies. Know what her answer was?

"What are those?"

Yeah. That's right. So I got to edu-macate the little "you old dudes wouldn't understand all this modern app-related stuff" smuglet with the little snippets of info from that opening paragraph. Felt great.

That said, I'm no expert. Far from it. In fact, about two weeks ago, my answer would have been the same as hers. I'd be the poster-boy old dude (and representative of the current state of the mass market) when it comes to crypto currencies. But not so much anymore, and I think this may be important.

What IS a crypto-currency?
When I first heard about this, I barely knew anything about Bitcoin. I had a vague idea that there is something I’m really meant to be doing or installing on my computer to try and make myself some online-money-Bitcoin-thingos by using computer power to crack codes that other people aren’t doing, so I can “mine” myself some and be rich when Bitcoin suddenly “makes it big”? But also, I mean, isn’t it somehow dodgy? Don’t you hear about terrorists being vaguely involved with it? Or money laundering? Or people buying cocaine on the internet with it? But I also hear it’s meant to be all good for privacy, which is supposed to be everybody’s Digital New Year’s resolution, right? But what IS it? How do you get it, store it, and get it out of the computer and turn it into real money? 

Bitcoin lasted about three minutes in my life before I stuck it in the “too hard, leave it to the nerds” basket. I figured I’d revisit it when it took its next evolutionary step towards accessibility.

So it turns out Bitcoin isn’t alone though. There are more crypto-currencies. Quite a lot more, in fact.
Here’s a handy chart so you can see them ranked by founding date, growth over the last week, exchange rate and total available.

And one of them - the one I mentioned opening this post got founded a little while ago….

Your face on the money?
So what does that mean, ‘founding a currency’ anyway? How does a person found a currency, and how does it go from some spotty faced founders’ idea into something that’s actually doing (increasing amounts of) serious good around the world? Well to know that, it helps to know a tiny bit (just a tiny bit I promise) about how these crypto currencies work. And I promise it’ll be in layman’s terms. Because I don’t understand any of the rest of it. (And if anyone who does understand it better reads this, please be kind in the comments with the stuff I inevitably stuff up.)

Crypto currencies are the essence of a fiat currency. When I was doing my economics degree, one of the very first things they teach you (aside from the x-shaped supply and demand curve) is that most modern currencies are fiat currencies, which essentially means that they’re not based on anything tangible. They're valuable only because people believe they’re valuable. (As opposed to being backed by a Gold Standard, or being made out of something intrinsically valuable like gold or any other precious metal.) Fiat currencies are based on the system perpetuating itself - on the faith that it will. I can give you a little bit of paper with an S on it with two lines through it, and you’re happy to trade that to me for some food, because you believe the next person will take that paper in turn as an exchange for whatever fun thing it is they have that you want. As long as the faith stays alive, the system stays alive, and the currency lives.

I think these bills are almost dry...








Thing is, you want to know that my little bit of paper is a real one, and not one I made on my colour photocopier in the basement. So, we centralise production of our currency - like with a country’s central bank - and apply security features to it, like really fancy swirly patterns that are hard to print at home, or embossing, or special paper, or holograms, or embedded watermarks, or little strips of plastic or ink dots that glow under ultraviolet light. These features make the currency difficult to fake. The difficulty increases the trust that it's real, this trust helps the system stay alive, and when the system stays alive, the currency stays alive.

Well, with crypto currencies, this idea that if the system stays alive, the currency stays alive is even more literal. Like all modern money, they're numbers in a computer system. But the security features are a little bit different. For a start, the currency is decentralised. That means that it doesn’t require a central bank to issue it or to make monetary policy decisions around how much of it is around. And since a crypto-currency is something anyone can launch, (you don’t need a ‘money license’ for it - if you did, it would be centralised again), it still needs to be secure. It does this by behaving a little bit like the DNA on a cell.

Crypto-security
You know how every cell in your body has in its DNA, the blueprints for building your whole body again? Well these crypto currencies are a little bit like that. Instead of DNA, they carry a bit of code on them called a ‘block chain’. That chain carries with it all the parameters of the currency as well as a kind of record of all the transactions that currency has been through. And they constantly update, so they’re all current. All the money knows all about all the money in the system. And it’s updated by people who have decided to point big, expensive, powerful computers called ‘ miners’ at the challenge of updating all this crypto-code. As you can imagine, after a while, these block chains get pretty big. And you’d be right. In fact, some people have modelled what would happen if crypto currencies ever scaled up to the level of say, a VISA (which does thousands of transactions per second globally) to find out if the size of the growing block chains would outstrip the expected growth in computing power. Apparently, there’s a good reason to be concerned. Could ultimately spell the end of this first iteration of crypto currencies like Bitcoin and its ilk. Or, it could simply precipitate the next stage in decentralised digital currency’s evolution. But never mind. I’m treading dangerously close to geeky technical territory I've no business commenting on.

The point is, these coins survive for the same reason any other fiat currency does: There’s a limited number of them, (that parameter is set in the original ‘DNA’ algorithm), they’ve got enough security features to be trustworthy (the DNA is replicated and updated by all the coins, so nobody can “CTRL-C, CTRL-V-V-V some to triple their holdings… The new copies won’t be reflected in the rest of the economy’s ‘DNA’, and they’ll be rejected), Finally, as long as everybody believes the currency will survive, and they’re willing to take it in exchange for goods, it survives. If the system survives, the currency stays alive. And in this case, the survival of every digital currency depends on the currency ‘miners’ carrying on their work mining - updating all the transactions, so the existing coins stay current. They get rewarded for this - in digital coin - at a predetermined rate, and so the economy can develop.

SO! Anyone can make a currency, and many do. You could make one immediately after reading this article. I could make one called STEWARTCOIN, put a picture of my face on it, decree that there would only ever be 1 Trillion STEWARTCOIN in existance and people would be welcome to point their block-chain-updating mining computers at them in order to corner the STEWARTCOIN market. But these new currencies die almost instantly, because nobody believes they have any staying power, so they don’t mine it, which means the coin can’t work, so it dies. Belief and a self-fulfilling prophecy. Fiat currency.
So all is as it should be.

The Dogecoin
Now, this brings us to one particular example of one of those currencies, and how it went from some Australian dude’s funny joke, to being kind of a force for good, and maybe one of the ingredients that will create the crypto currency tipping point to the mainstream.

Picture this. it’s December 2013 and this guy Jackson Palmer in Australia - a marketing guy at Adobe - is laughing away at Doge - the 2013 Meme of the year winning’s mascot.

Here's a few examples from www.knowyourmeme.com/doge 














(Don't ask me - apparently it's hilarious. Guess I AM old...)

Anyway, he tweets:

"I'm investing in Dogecoin - the next big thing."

 
And after some Twitter-couragement from a few folks, he ended up buying dogecoin.com and putting up a picture of the Doge dog as a splash screen.

Around the world in Oregon, a programmer named Billy Markus used code inspired by another digital currency (Luckycoin, which in turn is based on ANOTHER digital currency called Litecoin) and sets up Dogecoin as a real thing. He's also just finished watching Austin Powers, and he and Palmer decide it would be funny to set the total amount of available Dogecoin at "One hundred Billion coins" (cue little finger to mouth...).

The currency was officially released December 8 2013 with the following satirical Reddit thread:

“Dogecoin – very currency – many coin – wow – v1.1 Released.”


And then the dude went to sleep. Totally ready to get up the next day, head off to his job in marketing at Adobe, and probably never give his Dogecoin joke much more thought. Because of course, it would just peter out, and fade away like the satirical statement it was meant to be. But no. overnight, Reddit, an online community and home to his original post was blowing up with interest, and people were mining Dogecoins into existence.

The internet's tipping currency...
Now, Dogecoin isn't Bitcoin, but it's worth something. The way Palmer puts it: "if Bitcoin is your salary and the money you use to pay your mortgage and pay for your retirement, Bitcoin is like the change from your pocket that you stick in that jar on your dresser. It's not worth a lot, but it adds up."

And apparently it does. People have put Dogecoin to good use. First, it has apparently become the 'tipping'currency on the internet. Someone creates or passes on a link you really liked? instead of just giving them a useless "Like" (or an even more useless "Plus 1"), you can now toss them a few coins - in Dogecoin. (Note from me: I've never had this happen, but apparently it does. They say the online community is very strong. If you get yourself a Dogecoin wallet and make your posts known to the Dogecoin using community, apparently they're all very generous and inclusive. I'm going to link to this very article in the Reddit sub group for Dogecoin ( www.reddit.com/r/dogecoin ) and see if anything happens. I'll report back on the community's response in the comments.)

...and good deeds currency...
And this community is doing some cracking things. In addition to providing a sense of gratification with their tips for good writing and curation, and in addition to (very occasionally) allowing you to buy coffee (if you live in San Francisco), they've also spontaneously formed the Dogecoin Foundation to make real things happen...in the real world. Last year they cottoned on to the fact that that old favourite group - the Jamaican bobsled team had managed to pull together a team for the Winter Olympics, but were short of the funding they needed to go compete. The Dogecoin Foundation called upon its donors and BOOM! Jamaica was at Sochi. I don't quite get the mechanics yet of how they translate Dogecoin activity into real-world action (and spendable cash), but they do it. They've managed to sponsor a Nascar race car in the US, they ran a competition for the Dogecoin symbol that would appear on the hood, got it produced, and the car raced at Taladega. 
More materially, they've also managed to do some more meaningful good, and they've funded the digging of a handful of wells in developing countries to provide clean drinking water with Charity water, including, according to Wikipedia, an $11,000 donation (14million Dogecoin at the time) in "what the news media dubbed "the most valuable tweet in history""
 
 
Could this start a tipping point to adoption by the Early Majority?
This friendly, irreverent, yet seriously do-gooding is just the shot in the arm that crypto currencies need to get the attention of the most important group of people to the success of crypto currencies - those of us just out of the know. I (and my old ilk) represent the next big segment required for these things to work. A non-geek (and when I say 'geek' I mean it with affectionate reverence, not derision), but vaguely tech-savvy person who represents the beach head on the big cohort. People like me are they type who would be willing to act as an early adopter for something a little out there and techy cool, but I'm also far enough on the safe side - not so out there or on the bleeding tech edge, that the more conservative members of the BIG FAT MAJORITY are more willing to use me as a reference case than they would be someone they viewed as a pure tech enthusiast. Get me and my kind to learn about / care about a crypto currency, and they're that much closer to mass adoption. And this accessible, friendly do-gooding Dogecoin is just the kind of thing that may make that happen.

Which would be an interesting thing, and kind of blows my mind.

It's already kind of starting - Yahoo Finance recently added Bitcoin, and there's a petition for Dogecoin to be included too.
Apple this week also lifted its ban on crypto-currency supporting digital wallet apps. It's begun.

Having looked into it a bit now, do I believe Bitcoin and Dogecoin will necessarily be the defacto global currencies in 10-20 years? Probably not (a bit more on this later), but do I think a decentralised fiat currency of some kind will be in place. You bet I do. In fact, in 20-30 years, it'll probably be a "duh!" kind of an obvious byproduct (benefit?) of the global connectedness we're building. For that to happen, it'll have to become a lot more user friendly. I mean - I'm writing about it and I don't even really know how I'm goign to "get some Dogecoin" (But I intend to figure it out). For help, Google tells me to go to www.howtodoge.com, where there's an appropriately irreverent tutorial.

(Apparently this is my "receiving" address: DT8oXk7PHRRCzSkxmxLVJCzkbUjifsuEcR)

I think. It's all a bit tricky to the novice. But in the long run, usability isn't going to be much of a hurdle. This is what entrepreneurs DO. They say inventors rarely get the credit or the riches. Who invented the TV? Who invented the Hard Drive? Who invented the microchip? Betcha don't know. But the mash-up artists who innovate off these ideas - who jam them together and build cool stuff with a customer's perspective in mind are the ones hailed as heros. SJ is probably the current granddaddy of them all.

What might it mean to a writer in rural China?
So the world has invented decentralised crypto currencies, and somebody will eventually make them user-friendly. Then what? What will this do to the disparity that currently exists across geographies? Particularly for information work? If I write a clever article or render an even more valuable digital service, I may get paid in Bitcoin, Dogecoin, Stewartcoin or whatever. That article I write, or that service I perform may score me say 20 Doge from the Doge-ers around the world. And 20 Doge may be enough to buy me a coffee in Australia. (For instance. I have no idea of its actual value today.). Well, whatever the absolute Dogecoin price, coffee in Australia is worth (or costs, that is) a hell of a lot more than a coffee in rural China. Or Bangladesh. Maybe 200 times more. What happens if my Bangladeshi equivalent writes the same article, or performs the same digital service, and gets the same 20 Doge? His work just became like 200times more valuable to him that mine was to me. What got me a coffee might get him three meals worth of food. How cool is that? Could a decentralised, globally available, government-independent, cost-of-living-blind currency be one of the forces that goes some way to equalising standard of living in the second or third worlds?

Now this is dangerous musing off the top of my head, and there will no doubt be those who have given this considerably more thought than me and who coudl expose my reasoning weakness with a swift flick of the pen (worth +50 Doge?), but whatever happens, it's going to be cool. I have the sense that this could be one of the more important byproducts of the internet - indeed, maybe even the most important thing to happen to global economics since the internet.
But that's probably enough from me for now.

I'm going to shut my laptop, hang out my tip jar and see what happens....

(This is my tip jar.... I think)
DT8oXk7PHRRCzSkxmxLVJCzkbUjifsuEcR

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