The Advantage of an Anonymous Creator

Bitcoin’s mysterious creator, a person or group by the pseudonym Satoshi Nakamoto, disappeared from stage in 2011. In his last email to another Bitcoin developer he mentioned he was moving on to other things. He was never heard from again until Newsweek reported on the potential identity of Satoshi Nakamoto in 2014. The “real” Satoshi Nakamoto denied Newsweek had found the right person by stating “I am not Dorian Nakamoto,” but did not reveal his real identity. Bitcoin’s founder has thus remained a mystery to date.

Poor Marketing

Bitcoin’s founder disappearing from stage might have been part of Bitcoin’s success. Dogecoin, the second most popular cryptocurrency, is revealing how a founder can impact a coin’s success. The coin was created by Billy Markus and Jackson Palmer. The two have not tried to hide their identity. Especially the comments by Jackson Palmer, who ironically works on Adobe’s marketing department, have put a strain on the digital currency multiple times.

In February, Palmer turned down a $500,000 investment offer from two venture capitalists and stated “they’re offering me what in reality is ridiculous amounts of money.” A statement like this would make other investors think twice before investing, as it implies a lack of confidence and caps the upside of the coin’s value. Palmer later noted he has never held many Dogecoins: “I have roughly 2mil [DOGE] remaining.” This equals less than $600 in today’s value, and again makes it seem like he does not have much confidence in his own coin.

Public Drama

Palmer also publicly expressed his outrage against the manager of the DogeHouse mining pool by the pseudonym pronoob. The Dogecoin blockchain had experienced a hard fork when Dogecoin was upgraded from version 1.4 to 1.5. Palmer considered pronoob “abrasive in his treatment of the core Dogecoin team” during their combined effort to solve this issue. The argument caused many people to leave the DogeHouse pool, which subsequently shut down in April. Pronoob expressed the following on this: “People hated us. People loved us. At the end due to all the drama and fud [fear, uncertainty and doubt]/lies spreading we lost of a lot of miners.”

As most of the DogeHouse miners joined multi-coin mining pool WafflePool, this accelerated the deterioration of Dogecoin’s network quality. Just one and a half month later, one of Dogecoin’s developers sparked panic in the community by suggesting the mining schedule would have to be altered to secure the coin’s future. The presence of a significant dedicated mining pool such as DogeHouse could have at least bought the developers more time to think about this.

The drama did not stop there. In a recent turn of events, Palmer has now decided to leave the Dogecoin community. The reason for this was yet another public argument, this time between him and Alex Green. Alex Green is the founder of the platform, which decided to file a Notice of Opposition against the company UltraPro for trying to trademark the word “Doge.” After a fierce debate, Palmer finally threw in the towel and announced he would be stepping back from the community: “Given that I just can’t be bothered dealing with the massive amounts of hate you’ve somehow had directed at me though, in the past 24 hours, I’m going to step back and let you run this community here on Reddit from now on, which you [Alex Green] obviously own. Unsubshibing. Peace.” Dogecoin prices subsequently dropped by more than 12 percent.

Whether this will be the final nail in the coffin of Dogecoin, or whether Dogecoin will be better off now is still to be seen. But it certainly seems like many “Shibes” will be wishing they would have had their own Satoshi Nakamoto.

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Comments (2)

  1. Daine June 26, 2014
    • Dogeconomist June 26, 2014