Business to Business Services Are What Will Make Dogecoin Succeed

dogecoinFollowing on from my previous post about the second / third generation cryptocurrencies advancing the start of the art, I’ve spent a lot of time participating in /r/dogecoin on Reddit and seeing dozens of new businesses start accepting Dogecoin every day.

I’ve mined a fair bit of Dogecoin so far (albeit on laptops, not dedicated mining rigs) and purchased a substantial amount, so I’ve been looking for some ways to spend or invest it.

Here’s some of the purchasing that I’ve done or am considering at the moment:

There’s a steady clip of new merchants and stores announcing support for Dogecoin on Reddit and elsewhere every day – to the tune of a couple dozen per day based on my casual observation of the forums.

One thing that 100% of these stores have in common is that the goods they’re pricing in Dogecoin are consumer goods, sold directly to individuals. And that’s probably the natural place for a new type of payment technology to begin getting traction, since the barriers to entry are fewest.

However, there are millions of consumer businesses that simply won’t take the currency risk of accepting Dogecoin (or Bitcoin) directly – they might try using a service like Coinbase or BitPay, which mitigate the currency risk by just pricing everything indexed to some fixed fiat (USD, EUR, etc) value and send the fiat back to sellers immediately once the transaction clears.

But the core problem that early crypto-accepting businesses like Overstock solve with Coinbase et al today is that they can’t cover any of their business costs with Dogecoin or any other cryptocurrency. If I’m Overstock’s CEO, I might be able to accept cryptocurrency from customers but I can’t use it to:

All of these expenses are really business-to-business transactions, if you consider employees as sole proprietor service providers for the sake of this example.


Not being able to pay for any of those things without having to convert Dogecoin back into USD and being subject to rapidly changing market conditions is the real-world definition of cryptocurrency risk. And so the strategy of choice for mitigating it is to simply never pay for any of these services in Dogecoin – set the price for all of your goods in USD and let the customers take the currency risk at the point of sale.

However, that strategy ultimately limits the utility and value of the cryptocurrency to business-to-consumer transactions only – still really useful, but also makes the USD / Dogecoin exchange rate the sole determinant of the currency’s value, since prices for goods are still really set in USD.


An alternative and much more interesting approach is to start selling business-to-business services in Dogecoin directly. It’s a process that will take much more time to develop (decades) but it ultimately leads to a path where the value of Dogecoin goods can be wholly priced in cryptocurrency. And therefore: leads to a day when the value of Dogecoin is based off of its buying power indexed to real goods and services, not speculation.

I run a B2B startup at the moment - MarkedUp Analytics; if I could pay my (considerable) Amazon Web Services bill in Dogecoin alone and there were tools available to make it easy for my accounting firm to reconcile Dogecoin-based transactions in Quickbooks, I’d be in.

Growing a B2B Dogecoin ecosystem from the ground up can be bootstrapped. It starts with a few SaaS products that make it easy to do order fulfillment and process transactions – Moolah has already made massive strides on that front. Immediately after that comes accounting tools – something as simple as a bank statement plus historical fiat fair market values is probably all that’s needed until the ecosystem grows. Those are the basics that businesses selling to consumers need.

From there, the next best place to enter is marketing and advertising services – and I would start by building marketing / advertising services that make it easy for businesses to find consumers who are want to pay with Dogecoin.

Trying to get MailChimp or MarkedUp to accept Doge is the wrong place to begin – focus on building advertising networks or product listing services that make it easy for the early adopter businesses to find Dogecoin customers. Because from there, you can get a virtuous cycle that can start growing the ecosystem based off of its own organic growth, rather than hit-driven PR and speculation.

From there, if the segment of customers “willing and able to pay in Dogecoin” grows sustainably, anything is possible. Cracking the really tough nuts, like paying salary or buying real-estate with Dogecoin, will take many years of consistent growth in order to be achievable.

Dogecoin is entering a phase now where the first business-to-business services need to emerge in order to help support the business-to-consumer companies selling coffee, Steam keys, and the like. That’s how the long view of the ecosystem becomes realizable.

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I'm the CTO and founder of Petabridge, where I'm making distributed programming for .NET developers easy by working on Akka.NET, Phobos, and more..