Let me start by saying that I am only offering my opinions and that this post should not be taken as financial or legal advice of any kind. But yea, I am taking a pretty big departure from my normal material here because I want to talk about my latest fascination. Cryptocurrencies.
What's a cryptocurrency? Like some kind of magic internet money?
Exactly... Magic, Internet, Money. I know, it sounds totally crazy; and it brings up a host of security and other concerns. But the more I have looked into this, the more I realize that something really profound is happening beneath the surface. I think that this is going to have a huge impact on the way our society works. Many of you have likely heard of Bitcoin, which has received quite a bit of press after rising more than 6000% in value during 2013 and creating a bunch of new millionaires. To put this into perspective; three years ago some techie guys were able to buy a pizza for 10,000 Bitcoins. Today 1 Bitcoin is worth around $800. How would you like knowing that if you had ordered 1 less pizza you'd be 8 Million dollars richer? Bitcoin was the first, is the most recognized, and widely used crypto. There are over a hundred new currencies that have sprung up trying to capitalize on Bitcoin's success, however my interest is primarily in Ðogecoin. Ðogecoin started as a joke currency 2 months ago and has been taking the internet by storm ever since. Today there are something like $50,000,000 worth of Ðogecoin in circulation.
Ok, you've got my attention, but how does this all work?
I think that the key to understanding crypto currency is that there is no spoon. Or in this case there is no currency. There is no physical currency, there isn't even any computer code that represents the currency. The only thing that actually exists is a record of transactions. All the transactions ever made since the currency was "created". It's a really long file called the blockchain. Since every user has access to the blockchain, and the system is constantly verifying all the transactions, no one can insert a fake transaction or the rest of the system would reject it. I think the easiest way to think about it is a sort of computerized version of double entry book keeping where everyone has access to the books so no one can cheat.
Since all the accounts are numbered, it also offers a fair degree of anonymity. Though I have no doubt that a sophisticated hacker could interpret the blockchain and figure out who holds what account. It would certainly take a high level of skill and resources to do so.
I thought this blog was about your garden, why are we talking about computer money?
Yes, this is my garden blog, but it's also where I talk about permaculture. While I am sure many would argue that since crypto currencies depend on massive amounts of computing power (and therefore electricity) both to process transactions and to encrypt the network, that it is not exactly permaculture. True, and it certainly raises the question of how this idea can survive the inevitable increases in the cost of energy. But I look at the ways we use power right now and shake my head in disbelief. From Christmas lights to video games and don't even get me started about really big entertainment based energy use like NASCAR or Las Vegas.
Currency is important. It is a form of communication that has a profound impact on our lives every day. Although it is not as important as water, food, clothing, and shelter to our immediate personal survival; I do think it has that same level of importance to the health of our social systems. And let's face it, the way we have been doing business is not working very well anymore. It is increasingly difficult to view the status quo as an equitable tradition, and there are enormous problems looming on the horizon in every direction for our financial institutions.
Suddenly we have this revolutionary idea. A way to trade with each other that is actually functioning out there in the real world on a global level. There are even people working on ways to use this concept in even more complex arrangements such as trusts, wills, and other legal mechanisms. To me, dealing in such important human needs clearly makes it worth considering crypto as an example of appropriate technology. (Acceptance of appropriate tech is one of the things that separates permaculture from the crazy hippies that want you to sacrifice your quality of life and eat grass). I believe that even if every single crypto currency that exists today fails, some form of this technology will be part of what John Michael Greer likes to call our "Eco-Technic" future. If nothing else, it's a fascinating moment in history that is well worth learning about.
So why Ðogecoin, instead of one of the other hundred or so other alt-currencies out there?
I got really excited when I found out about dogecoin. Not because I thought it would succeed, but because I thought it showed all the signs of a classic speculative bubble. Kind of like the tulip craze in 17th century Holland or the recent housing or tech bubbles here in the US. Sure bubbles are bad and all that, but some people also tend to make a lot of money off of them. I figured I had found a bubble that hadn't inflated yet. A quick way to make a buck as long as I could be smarter than your average bag holder, so why not give it a try? I figured out how to get my hands on some (a lot harder a month ago than it is today) and started learning more and more about it. I have become hooked on getting the latest info daily from /r/dogecoin. And over the last month, my views on this "joke currency" have changed... A LOT!
I recently stopped caring what the "value" of dogecoin is. I used to check dogecoin.com (the official developer's site) daily for the USD price, but recently that doesn't seem important anymore. Now I am among the growing ranks of users who are dedicated to doge regardless of the value. Even if it dropped to zero, I would continue to find value in the extraordinary community I have become a part of. It's kind of hard to explain, but somewhere between the amazing charity drives, and the general fun spirit of things, I developed a genuine affection for this silly little meme based coin. I still think the value will increase, but I and a lot of others are dedicated to using it regardless of the value, which ironically is why I think it will gain value.
Something really unusual is also happening in the doge community. People are consistently being nice to complete strangers over the internet. Not even just nice, but summoning the greatest and most noble of human behavior. Generosity is abundant. People are excited, happy, and finding a profound joy that carries over into their real lives. There is a buzz of fun and humor in the air that reminds me of the world famous Seattle fish market. And there is zero tolerance from the community of any kind of trolling or cruelty... ON THE INTERNET! If you've ever participated in any type of chat or messaging then you will be well aware that the internet does not have a reputation for bringing out the best human traits (especially on reddit), so something really special is happening here.
So I should sell everything and buy Ðogecoin?
No! It would be really foolish to risk anything you can't afford to lose in this venture. No one can predict what comes next. All it would take is some government interference or a major bug or security flaw to bring the whole party crashing down right quick. I encourage you to check it out, to learn about it, and to have fun with it which you should not have to spend any actual money to do. Crypto currencies are very new, and very volatile, and should be approached with patience and caution as they are very risky. They are basically digital cash. There is no way to reverse a transaction. There is no customer complaint line, or anyone who can catch the hacker that just stole your coins. While they have the advantage of much lower transaction fees than credit cards or banks, they also lack the protection that those institutions can provide. So proceed at your own risk, and be sure to follow the security guidelines. Backup and encrypt your wallet people!
Ok... then why are they even useful?
Ðogecoin in particular, I think, can fill a very useful niche by allowing for low cost micro-transactions online as well as for tipping over social media. Right now as you read this, millions of doge are being transferred over reddit, twitter, and sms text messaging. There is talk of a facebook app that will offer similar capability. Which is to say, when you see a comment, story, video, painting, pic, or any other thing that you want to support; you can tip them directly, with a tiny amount of real money, at no additional cost. Amazing.
Coming back around to the garden... The place I have found Ðogecoin to be most useful is in exchanging seeds with other seed savers. It's really the perfect currency for it. No longer do we need to find an exact match for an exchange to happen. Hopefully we can form a thriving marketplace where we exchange seeds for dogecoin, and everyone can find what they need. I started offering seeds on /r/dogemarket for Ð1000 per pack (currently down to about $1.20 USD) and have had a great response. I have tried to offer my seeds online before, but the transaction fees required by all the payment processors and auction sites mean that you have to do a huge volume or charge a lot to be able to cover the fees. Not very helpful to a hobbyist exchanging such an inexpensive item.
Ðogecoin bypasses the gatekeepers so we can trade directly with each other, and makes this type of low value, hobby based exchange possible. It's not something you're going to get rich doing, but it's sure nice to be able to exchange seeds with a larger network than just two people. That is what inspired me to start a new subreddit, /r/dogeseed. It is a place where anyone can trade open pollinated sees for Ðogecoin at no cost. There has been a great response so far, hitting 47 subscribers in just two days. Eventually I hope this will lead to a modern, internet based version of what the Seed Saver's Exchange has accomplished. But even if it never gets to be anything that large, you will find some good Shibes there, so I hope that you will come over and check it out too.