- After failing to get any offers, a man says he'll take Dogecoins for his vacation home
- Dogecoin is an alternative digital coin to the popularly traded cryptocurrency Bitcoin
- Although it started off as a parody to Bitcoin, Dogecoin is now worth more than $65 million
The Dogecoin started off as a penniless Internet joke. But Matt Thompson plans on selling his vacation home for this meme-inspired currency.
The 27-year-old entrepreneur has been selling games and gadgets over the Internet for years, but nothing as big as his Wisconsin vacation home, which he is offering for 100 million Dogecoins.
Dogecoin (pronounced DOHJ-coin) isn't something tangible like the dollar bills in your wallet. It's an open source file-sharing form of cryptocurrency that was created by programmer Billy Markus in December 2013. The newbie cryptocurrency started off as a parody of Bitcoin, using the image of a perplexed Japanese dog. Chances are, you've probably seen Dogecoin's mascot somewhere on the Internet already. As the Shiba Inu would say: Wow, much coin-cidence.
But this satirical currency isn't just a punchline anymore. Through trading and transactions between users, the currency went from being worth nothing to being valued at more than $65 million, and it has a uniquely supportive community of users from the site Reddit.
Thompson, a user of Bitcoins since 2011, started buying and selling Dogecoins two days after they were made available online. But the early adopter didn't think of selling his vacation home for cryptocurrency until his property got no offers after several months on the market. His three-bedroom, two-bath home is one of 2,300 properties on sale in Sawyer County, in the state's northern woods.
To attract potential buyers, he decided to accept Dogecoins as a payment form. He sees potential in it.
"I don't mind holding on to (Dogecoins) for a multitude of reasons, including that I believe I can use them to further my business," he explained. Thompson, who lives in Minnesota, primarily sells video and electronic game accessories online. He's been able to buy and sell inventory from places such as China by using the digital currency. "It's safe and easy with minimal fees," he said. "To date, I've found it to be very good for supplementing payment methods."
Timothy Lee, who has written about cryptocurrency for The Washington Post, says Dogecoin can be a feasible alternative to Bitcoin, but it is important to put it into context. Bitcoin is the most popularly traded cryptocurrency and has the largest community of users in the digital currency realm. Dogecoin is one of the top 10 cryptocurrencies, but it has a far smaller following.
Ben Doernberg of the Dogecoin Foundation -- yes, the founders even established a nonprofit organization -- says what makes it special compared with its competitors is its community.
"It was important to the founders that the currency would be friendly and accepting. Most of these Bitcoin competitors are created to make a lot of money, but it's hard to generate a healthy supportive community," he said. Doernberg estimates that more than 100,000 people use Dogecoin actively.
That does make for a limited pool of users who can fork up Thompson's 100 million Dogecoin price tag, which translates to roughly $135,000. The value of a Dogecoin is about one-tenth of a penny, whereas a Bitcoin is valued at a hefty $630 -- and at their peak Bitcoins were trading at $1,200.
Even though the value of Dogecoin is only a fraction of other cryptocurrenices, that doesn't mean it's easy to earn.
There's a process, says Dogecoin user Lionel Vogt, who first shared Thompson's story with CNN iReport. The Georgia resident explained that people use graphic cards and their computers to help "mine" Dogecoins. (In doge-ism speak, it's called "digging" for coins.) Mining is the process used to create digital currencies -- it's where computers solve mathematical equations in exchange for Dogecoins.
It's similar to producing other popular cryptocurrencies such as Bitcoin, Litecoin and Peercoin.
Dogecoin even has its own website, which has step-by-step instructions on how to get started using the currency. It also features a flashy introductory video of an animated Shiba Inu flying through a fictional city on a rocket ship.
The Dogecoin community is doing more than just joking around and financing online shopping sprees. The currency is being used to raise money for events and people. Before the Sochi Winter Olympics kicked off, Dogecoin fundraisers helped send the Jamaican bobsled team and an Indian luge contender to Russia to compete in the Games. The Dogecoin Foundation and Reddit's r/Dogecoin community were able to raise more than $30,000 for the two causes.
Despite the Dogecoin community's generosity, Thompson says the cryptocurrency has its critics.
"So many people, especially people involved with Bitcoin, tend to believe it's a copycat. I really don't think you can be so shortsighted. I believe the value of an economic system is the sum of all of its parts. So, there is room for all sorts of coins," he said.
Markus, the creator of Dogecoin, explains that the currency is not meant to be a rival to Bitcoin. Both use the same technology. "Dogecoin wouldn't be where it is without Bitcoin leading the way," said the Portland, Oregon, resident. "Bitcoin is the trailblazer and Dogecoin is a friendly spin that helps introduce the world of cryptocurrency."
Dogecoin's longevity is also dependent on network effect, Lee explains. "Dogecoin is sort of this self-fulfilling prophecy," he said. "The more people who accept it, the more value it has. Bitcoin has a head start on that," he said.
Bitcoin has been around for five years whereas Dogecoin has been in circulation for three months.
With the cryptocurrency still in its infancy and only a fraction of the value of its popular counterparts, it begs the question: Has Thompson received any offers for his six-acre vacation home?
Not yet, he says. But he's definitely made an impression with the Dogecoin community. "I've been asked a lot of questions about this house, and I think it's a good effect. It gets more people talking," he said.
Dogecoin Foundation's Doernberg says all the chatter is a good thing for the digital currency.
"The U.S. dollar is only valuable because people are willing to accept it. In currency, that is the most important thing," he said.
"Dogecoin's priorities are 'let's get everyone to the moon,' " Doernberg said. "Cryptocurrency is really powerful and instead of locking it up for a few people, let's get everyone in the world on it."