The latest go-to cryptocurrency is called dogecoin, a digital denomination that began life less than two months ago as a jokey tweet made by 26-year-old Australian Jackson Palmer.But his joke has now taken on a life of its own.The total value of the market for dogecoin (pronounced dough-je coin) has just topped $US60 million ($68 million) and it has spawned a community comprising thousands of buyers, sellers, merchants, beggars, speculators and "miners", the people who mint the money.The current value of the bitcoin market is $US10 billion.This week, transactions worth a total of $US14 million were made, including one Chinese investor who bought $US5 million worth of the virtual currency.And on a daily basis dogecoin transactions are outstripping those in the more established bitcoin market, albeit for a smaller overall value.Mr Palmer, who is a product manager based in the Sydney office of the software company Adobe, is both amazed and elated by the experience of introducing so many newcomers to virtual economics.

"If the world's got a problem at the moment, it's that people don't understand how economies operate, how scarcity works.And, if by joining the dogecoin community, they gain a better appreciation, then that's great."Tocap off a frenetic January, the community has also chipped in chipped in 27 million dogecoins - or $US30,000 - to help send the Jamaican bobsled team to compete at the upcoming Sochi Winter Olympic Games.(Based on exchange rates at the time of writing, one dogecoin is equal to $US0.0018.)The Carribean team, immortalised in the 1993 movie Cool Runnings, is competing at its first Winter Games since 2002, after failing to qualify in 2006 and 2010."We'resupporting the under doges," Mr Palmer quips.While there are still question marks about the long-term viability and security of these alternative currencies, associate professor David Glance from the University of Western Australia's Centre for Software Practice, for one, believes they have a big future - especially if they gain the backing of the official banking system."Ultimately,

cryptocurrencies are no more crazy than shares in terms of investments," he says."We can pretend that there is some logic behind valuations of shares but, in reality, most of it is just whim."[Dogecoin] grew a mind of its own Mr Palmer's co-conspirator is Billy Markus, a software developer at IBM, based in Portland, Oregon.They have never met in person.But, after coming across the joke website Mr Palmer cobbled together after the tweet, he suggested adapting a prototype virtual currency he had been toying with, which was based on the bitcoin DNA.At this stage, you may think that here are two smart alecs who have just invented and launched a virtual currency, so surely they must have helped themselves to a vault full of coins before opening for business.Yes, they wrote the algorithms that manage the currency and set a market capitalisation limit of 100 billion.But on December 8, 2013, when dogecoin launched, they effectively lost control.Now the dogecoin market has become a networked, self-regulating, peer-to-peer community.

These computer-generated currencies are produced through an activity known as mining where computers are used to process and solve mathematical puzzles and equations.As the currency pool grows and heads towards its capped limit, more computational power is required putting the activity outside the reach of amateurs using standard equipment.khan academy bitcoinEventually, this activity is dominated by miners using supercomputers or banks of networked computer known as server farms."That'slitecoin live transactionstrue virality," Mr Palmer says.cara mengumpulkan litecoin"[Dogecoin] grew a mind of its own."Butbitcoin vodkathat was not an issue for the founders.bitcoin entrepreneur under house arrest

Mr Palmer says he and Mr Markus never intended that dogecoin get too serious or appeal to the spivs and get-rich-quick types who have gravitated more towards the bitcoin micro-economy.In part, this is due to the large following dogecoin enjoys among users of reddit, a popular website known for its diverse and socially active community.This is undoubtedly because dogecoin takes both its name and mascot from one of last year's most viral internet memes - or running jokes.The doge meme takes its name from a reference on an episode of a popular 1990s internet cartoon series called Homestar Runner.vodka for bitcoinThe term "doge" was revived, mashed-up with a quirky photo of a pet Shiba Inu dog and then sprinkled with a few ungrammatical phrases written in the much-maligned comic sans font.Last year, it exploded across the internet.Mr Palmer, who was born and raised in Gosford on the NSW central coast, believes the doge theme has helped to make this cryptocurrency market appear less menacing, more accessible and a place in which he hopes philanthropists will outnumber the profiteers."What

I'd really like to see is for dogecoin to become the default tipping currency of the internet."Economics Sign up or log in to customize your list._ Here's how it works: Anybody can ask a question Anybody can answer The best answers are voted up and rise to the top up vote 2 down vote favorite The supply of new Bitcoins and Dogecoins is depicted in the graph below.The Bitcoin inflation rate is currently higher than the Dogecoin rate, but it reduces sharply to a rate close to zero.It eventually reaches 0% in 2140, after which there will be no new Bitcoins.There are currently 100 billion Dogecoins.The Dogecoin inflation rate is fixed at an additional 5.256 billion coins per year for every year henceforth.Which inflation rate is more appropriate for a general-use currency intended for use for transactions of all sizes?I realise this isn't necessarily the stated aim of either currency.Answerers should assume that the inflation rates are sacrosanct and can't be altered in years to come.

currency inflation cryptocurrency bitcoin up vote 4 down vote Your coins do not have 0 inflation in the long run First, we need to set straight that you have a critical error in your supposition: The rate of creation of money is not the only determinant of the inflation rate, see here.Even if we ignore these equilibrium effects, is any of these coins superior in its rate of money creation?Suppose hereinafter that the actual inflation rate mirrors the money creation rate.The optimal inflation rate is something that is not clearly understood, but most Economists agree that it is somehow related to the current state of the economy.Hence, an inflation rate that is independent of the state of the economy cannot be that great.It basically removes the central banking authority to manipulate the inflation rate to the greater good of society - but removing this power is also an explicit goal of many advocates of these coins.I have answered few reasons for and again higher inflation here.

These make a case for a positive inflation rate.However importantly, they make a case for positive unexpected inflation rate.If high inflation is expected, all these benefits fall down.What remains is the shoe-leather-cost of inflation, implying that the lower inflation rate, bit coin, would be weakly better.Remember: This is based on the false supposition that the money creation rate is the only determinant of the inflation rate.For the optimal rate of inflation, see also /economic-research/publications/economic-letter/1997/september/what-is-the-optimal-rate-of-inflation/ /papers/w16054 up vote 1 down vote Bitcoin can not have a real inflation rate because its value is purely speculative.Bitcoins themselves have no inherit value (intrinsic nor extrinsic).You only acquire a bitcoin because you think another person will want it for the same or higher value that you did.Thus any deviation in its value reflects pure speculation.At least with dollars, they have extrinsic value in that you can pay your taxes with them (public tender laws).