From Computer Science to NASCAR, Cryptocurrencies in the Modern World

On June 22^nd, the internet’s favorite NASCAR driver, Josh Wise, will be tearing up the track at the Sonoma Sprint Cup in his signature No. 98 Shiba Inu clad “Dogecar.” Sponsored by the growing “Dogecoin” community, Wise’s entry is a testament to excellent fundraising, some good humor, and a growing trend of popular cryptocurrencies taking the market by storm.

            Dogecoin, modeled after the Bitcoin spin-off Litecoin, is a currency of the Internet. Similar to the popular Bitcoin, Dogecoins are obtained through exchange for goods and services, free market exchange, and “mining.” Mining, or “digging” as it is known in the Dogecoin community involves letting your computer solve complicated math problems as it, much like a hacker, searches for the correct computational code to unlock a “block” of coins. When the transaction has been completed, and the code verified by the host network, the miner, or digger as the case may be, is rewarded with a “block reward,” of the respective cryptocurrency (e.g. Bitcoin, Dogecoin, Litecoin, etc.). Rewarded coins vary in number, and frequency, and the greater processing power of your computer (the more energy devoted to the task), the more likely coins are to be discovered.

            According to Nathan Wells, student at Worcester Polytechnic Institute, and user of Bitcoin and Dogecoin, Bitcoins and their respective spin-offs really do function as a currency of the Internet. “They’re like online cash,” he explained, “they can be sent easily and mostly anonymously between any two people with Internet.” Bitcoin isn’t backed by any government, agency, or corporeal capital, the Bitcoin algorithm codes for a finite number of them to exist. Much like gold, the more you mine, the less undiscovered product exists, and a government or independent practice can’t create more of it just to accommodate demand. Supply and demand (as well as any costs accrued in transaction) dictates the price of both.

            According to Nathan, people like cryptocurrencies such as Bitcoin “it’s anonymous and doesn’t require any middle-men like credit card companies or PayPal.” Despite this perk, because Bitcoin isn’t dependent upon corporeal capital, it and every other cryptocurrency is subject to the whims of the market, which can be quite inconsistent. “I got into Bitcoin a few years ago because it seemed like a cool idea,” Nathan said, “and I thought other people would want to start using it too. It ended up being a pretty good investment.” Nathan purchased around 20 Bitcoins in 2012 at around $13 per Bitcoin, and sold most of them off when they peaked at $30. Laughing, Nathan explained, “Bitcoin peaked at about $1,000 a few months ago.” But though he acknowledges he didn’t strike it rich, “I still ended up making a pretty respectable profit.” Though there are few stores online that accept Bitcoin, Overstock.com does, and there are sites where users can exchange Bitcoins for credit to Amazon.com, which Nate has done. Currently, the price of Bitcoin hovers around $632, while only a few days ago it hovered around $680. Media craze tends to correlate strongly with Bitcoin peaks, as do events such as businesses making the move to accept Bitcoin as tender on their websites.

            Dogecoin, on the other hand, weighs in today at $0.000411. Currently the seventh largest cryptocurrency by market capitalization, Dogecoin has a fan following and clientele all of its own. “It’s kind of silly, but I think it has it’s place,” Nathan said, “People on Reddit have been using it a lot.” Reddit, the social networking service, news website, and self-proclaimed “front page of the internet” has served to skyrocket Dogecoin from an Internet joke to a legitimate Internet currency. Originally a joke prevalent on the subreddit /r/doge, a page that serves to feature the popular Doge meme, depicting a surprised looking Shiba Inu dog complete with captions of incorrect grammar in the iconic Comic Sans font, Nathan says that Dogecoin has blossomed into something real, and surprisingly, charitable. “I haven’t spent any of my Dogecoin yet, I only have about $0.50 worth, but there are a few stories of people getting together and raising a lot of money in Dogecoin.”

            Earlier this year, the Dogecoin community established a fundraiser to raise $50,000 for the Jamaican Bobsled team, which had qualified for, but could not afford to attend the Winter Olympics held in Sochi, Russia. In just two days, $30,000 worth of Dogecoin had been raised, and the Dogecoin to Bitcoin rate rose by 50%. Spurred on by this surprising chain of events, the Dogecoin community was inspired to collect $30,000 in donations for the “Doge4Water,” fundraiser to build a well in Kenya. The campaign was successful, receiving donations from over 4,000 donors, including one anonymous Dogecoin patron who donated 14,000,000 Dogecoin, roughly equivalent to $11,000 at the time.

            Now, similar to the Jamaican Bobsled Team, the Dogecoin community is once again lending support to the “underdoge.” in March of 2014, the Dogecoin community successfully raised $67.8 million Dogecoins (then approximately $55,000) to sponsor NASCAR driver Josh Wise. On May 4, Wise drove the Dogecoin/Reddit-sponsored Shiba Inu clad racecar in the Aaron’s 499 event at Talladega Superspeedway. Though Wise finished 20^th, on May 16^th he won a spot at the Sprint All-Star Race by virtue of an online fan vote, beating out longtime crowd favorite and GoDaddy.com spokeswoman Danica Patrick, and came in 15^th. Now again, the Dogecoin community is gearing up for June 22^nd, when Wise will be sporting his colors at the Sonoma Sprint Cup. And when he’s tearing up the track, you can be sure the announcers will be commenting not only on the paintjob, the humor, but also on the cryptocurrency community that made it all happen.