[tlrobinson]

I'm skeptical of some of the hype around Dogecoin. The various stats sites are currently showing hundreds of millions of dollars worth of Dogecoin transactions every day (http://bitinfocharts.com/comparison/sentinusd-doge.html). These are trivial to manipulate by sending transactions to yourself.

Where are all these transactions happening? Am I just out of the loop?

[mkeung]

there is a big tipping culture in the community, especially on reddit. in addition to karma upvotes, people can use a tipbot to send doge to each other. the /r/dogecoin subreddit has 40k+ subscribers, with lots of tipping in each thread.

additionally, it may be that each transaction is counted multiple times. if I were to tip you, I would first send funds to the bot, who then sends funds to you.

[tlrobinson]

Ok, lets be generous and assume all 45,199 /r/dogecoin subscribers tip daily, and there are 2 transactions for every tip. Each subscriber would need to tip an average of:

$427,079,860 / 2 / 45,199 = $4724.44

Not likely, IMHO, even if each tip required 10 or 100 transactions.

Most tips seem to be less than a dollar. http://www.reddit.com/user/dogetipbot

It just doesn't add up. Where else is Dogecoin being used?

EDIT: some actual numbers are available here http://www.reddit.com/r/dogecoin/comments/1wd49h/huge_udoget...

---

On January 26th:

- 7,258 inbox messages were read by dogetipbot (even more were sent and were still unread at the time -- backlog).

- 4,565 tips were given.

- 572 new users registered for their first time.

- 359 shibes withdrew some dogecoins

- 743 shibes still kept sending +info requests even though i turned them off. ;)

- 1,063,466.73376456 dogecoins were tipped.

---

1,063,466.73376456 dogecoins = $1488.85 USD (using current exchange rate of 1 doge =US$0.0014)

There you have it. ~$1500 worth of Dogecoin was tipped on the /r/dogecoin subreddit on Jan 26, while $240M worth of Dogecoin transactions took place.

[mkeung]

I haven't run any numbers (great analysis by the way). Other sources I can think of:

-conversion from other currency holdings (LTC, BTC), which some people have openly said they did

-recent run up / down of the value caused a lot of people who were previously holding to buy / sell (started around the time of the big news push with the Jamaican bobsled team fundraiser, right now it is dropping)

-general interest, people buying some amount to hold for the first time. i have had friends making their first crypto purchase in doge recently, who don't understand the technology and probably shouldn't (due to the news i think and not wanting to miss out on bitcoin 2.0)

-Chinese investors getting in / out? i think i saw a graph of cny to doge being a major part of the transactions

personally, i haven't looked into it that seriously because i haven't invested seriously. i put time in (especially for the site content), but all my coins are mined from an existing gaming computer. my total doge USD value is ~$50, which is probably lower than what people would expect of the dogecointutorial creator. my doge mining actually started because I wanted to cheaply explore how cryptocurrencies worked. then the tutorial site actually started when i was testing out aws / github pages for landing page hosting. originally i just had some sort of dogecoin index placeholder but found myself jumping around / searching for info as i learned about doge and cryptocurrencies...so i started my own guide. if you do more research, do share it!

[tlrobinson]

I did some more calculations here: https://www.quora.com/Dogecoin/Where-is-the-currently-massiv...

Notably, the volume across all exchanges today is 562,124,614 doge, which is about $786,974, and mining accounts for another ~$1,000,000/day (500000 * 60 * 24 * $0.0014).

2x each of those to account for transactions into/out of mining pools and exchanges, and it's still only a few million dollars (plus a lot of trading never touches the blockchain)

[mkeung]

bookmarked, will keep an eye on it.

[pippy]

I would assume much of this is done by speculators. iBit, a company that directly connects the bitcoin market with NASDAQ, enables high volumes of trade. Once you have bitcoin all other alt currencies are very easy to trade. Many speculators love the high volatility of trades as it gives them an opportunity to buy low and sell high, especially if you've got a high risk portion in your investment portfolio.

[tlrobinson]

Most trades never touch the blockchain until a user transfer the coins out of their exchange account into a different wallet.

Even if they did, see my other comments about how the volume across Dogecoin exchanges is only about $1M/day.