UNKNOWN

MAY 2017

GLOBAL

DOGECOIN

DESCRIPTION OF EVENTS

"Dogecoin is an open source peer-to-peer digital currency, favored by Shiba Inus worldwide." "Dogecoin sets itself apart from other digital currencies with an amazing, vibrant community made up of friendly folks just like you." ""Doge" is our fun, friendly mascot! The Shiba Inu is a Japanese breed of dog that was popularized as an online meme and represents Dogecoin."

 

"We all know and love our tipbot /u/dogetipbot, Dogecoin wouldn't be where it is today without it, but how it works exactly?" "You summon the tipbot by saying its name with "+/u/" in front of it, +/u/dogetipbot, after that you can write a tip!" "If you don't have a dogetipbot account yet, click here to register for one. This page has all the commands you might need."

 

"The shibes’ tips of dogecoins to each other didn’t end well, either. The operator of the 2014 dogecoin tipping bot confessed in 2017 that he had stolen all the deposited dogecoins two years earlier. Much sorry, many loss."

 

"As of right now, everyone's dogetipbot balance is set to 0 -- the slate has literally been wiped clean. There are no Dogecoins left in the dogetipbot hot wallet. This is literally the nuclear option. I've recorded your dogetipbot balance as of now (your pre-implosion balance), by the way -- so yes, I know what you had."

 

"I wish I could tell you dogetipbot got hacked -- but unfortunately, we didn't. Because of the way we structured the bot and cold storage, dogetipbot never had an external hot wallet breach in the 3.5 years we've been running. Individual reddit accounts were compromised (weak passwords, etc) -- but that never affected everyone else until now."

 

"So, what happened? In 2015, Wow Such Business was completely out of money -- I had to lay off all of our employees (including myself) in an attempt to keep the business and the bot alive with debts to pay. With $500 in the bank account, all of my personal funds spent, and all of my personal credit cards maxed out to pay for the business, I had to make a case to potential investors as to why cryptocurrency tipping wasn't going anywhere and why they should back us. We had a solid track record, but raising money in 2015 was a hell of a lot harder than in 2013. We couldn't continue to operate without an influx of investment (and no, crypto ICOs wouldn't help -- your attorneys and the SEC can tell you why)."

 

"I made the decision to cash out the cold storage funds to keep the bot and the business afloat during this time. The goal was to raise another round to re-purchase the sold coins -- thus ensuring that dogetipbot wouldn't operate as a fractional reserve. That day never came -- we weren't able to secure additional funding."

 

"I had to declare Chapter 7 bankruptcy personally, since there was no way to get myself out of the mountain of debt (high five-figures) I personally had spent on keeping the bot, business, and dream alive with no income and no funding. If I had to do it all over again, I would have shut down dogetipbot, wind up the business, and walk away. I don't know where Dogecoin would be today if dogetipbot shut down in 2015. Unfortunately, there's no bailouts in crypto."

 

"The only reason the bot still ran for 2 years has literally been me keeping it alive by transferring every crypto asset I had into the hot wallet so folks can withdraw funds. Unfortunately, with the price increase, scammers and hackers have both targeted and compromised high-value reddit accounts and withdrawn funds from them -- it pisses me off that I add cash to the hot wallet only to have some hacker who snags a reddit account drain the balance instead of someone who deserves it -- which is what happened last week. That was the final nail in the coffin."

 

"I'm shutting it all down and leaving crypto for good. dogetipbot on reddit will officially self-destruct on December 15th, 2017 -- 4 years to the day of it coming into existence. All source code will be fully released before then, if anyone wants to try herding cats and dealing with all this. I personally hold no cryptocurrencies nor do I have any desire to in the future. I have one piece of advice for anyone considering starting a crypto business: don't."

 

"Dogecoin used to be fun, back when it wasn't worth anything. We were the coin that made fun of people looking for a quick profit. Over time, it turned into everything I hate about crypto. I just didn't see it happening since I was in the middle of it."

Dogecoin is a meme crypto-currency inspired by online Shiba Inu memes. In 2015, there was a popular tipping bot on Reddit, which allowed users to tip Dogecoin to one another. In 2017, the bot shut down, and it was revealed that the creator of the bot had already spent everyone's platform funds. While the creator promised to refund users, it's not clear if any refunds were provided and the price of dogecoin increased significantly at that time, and has increased further since.

HOW COULD THIS HAVE BEEN PREVENTED?

This type of situation would be easy to prevent with funds stored in a proper multi-signature wallet and regular visibility to ensure full backing.

 

Check Our Framework For Safe Secure Exchange Platforms

Sources And Further Reading

 For questions or enquiries, email info@quadrigainitiative.com.

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