Dogecoin was supposed to be the kinder face of Bitcoin.
Created on a lark in response to the internet’s bizarre meme imagining what a Shiba Inu would sound like if it could talk, the cryptocurrency now has a reputation for sponsoring uplifting causes like sending athletes from developing countries to the Olympics.
But in recent weeks, three prominent Dogecoiners announced they were leaving cryptocurrency’s community: Dogecoin co-creator Jackson Palmer, as well as Ben Doernberg and Eric Nakagawa, two heads of the Dogecoin Foundation that also disbanded.
The departures coincided with the rise of a company called Moolah, a digital currency exchange specializing in Dogecoin. Moolah is perhaps best known for leading the successful campaign to sponsor a NASCAR driver. Its founder, Alex Green, has given away many of his Dogecoin holdings to help promote the currency.
Last month, Doernberg published a post expressing fears over Moolah’s business practices. He was mainly concerned about the lack of consumer protections Dogecoiners who were investing in the firm seemed to be incurring; Moolah ended up raising nearly $US500,000. In response, Moolah said it did have proper controls in place, while calling Doernberg “toxic” and asked him to resign from the Bitcoin foundation.
In recent days, a new issue has arisen over the trademarking of “Doge” and “Dogecoin.” A company called Ultra PRO, which makes protective coverings for valuables, sought to trademark the “Doge” meme, causing alarm within the Dogecoin community that a third party would have rights over Dogecoin projects. Palmer, the Dogecoin co-creator, attempted to assuage the community’s concerns, explaining he’d reached out to Ultra PRO and came away convinced the firm would not try to stop Dogecoin folks from using the trademark.
Moolah continued to hold that Ultra Pro should not be trusted with the trademark, and that Palmer was guilty by association. That was the final straw for Palmer, who in his comment on reddit announcing his departure this week said reddit’s Dogecoin community had become “sadly cult-like.”
Meanwhile, Dogecoin has faced technical dilemmas. The cryptocurrency was programmed in such a way that the limit on how many Dogecoins can ever be created could be reached by the end of the year. The incentives required for people to turn their computers into “miners” to confirm transactions have thus become less enticing, making the Dogecoin network more vulnerable to a malicious actor executing a 51℅ attack.
All this has taken an immense toll on Dogecoin growth. The number of visitors to the Dogecoin reddit page — the cryptocurrency’s defacto homebase — has fallen from around 45,000 uniques a day to fewer than 20,000. Meanwhile, the price of Dogecoin has fallen 25% in the past 30 days and 40% in the past 90, according to Coinmarketcap.
Dogecoin holdouts now largely accept Moolah’s prominence. A new Dogecoin Foundation began to form a month ago with Palmer’s blessing, and its new leaders say they are unfazed by Moolah’s stature in the Dogecoin world. “Moolah was one of the first businesses to give our community a shot,” a new foundation member who goes by “Goodshibe” told BI. “In a decentralized community, the strongest personalities tend to rise to the top. There’s been a false dichotomy created, that our coin can *only* be fun and worthless or valuable and ‘serious’.”
But everyone seems to agree that the good natured tone the community once prided itself on has evaporated.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.