Better than dollars?

 A news analysis

Fans of Alaska’s Iditarod Trail Sled Dog Race might soon be able to help fill its financial coffers by doing their shopping with virtual IditaCoin.

As Fairbank’s Brett Sass was preparing to run the last leg of the 1,000-mile race on Monday to seal his first Iditarod victory on Tuesday, the race announced the launch of a cryptocurrency with the promise that “IditaCoin will generate funding not only for staging the historic race, but for animal welfare grants and financial support for the rural communities that share the heritage and tradition of this great race.”

The coins are now available online at what is said to be a “Pre-Sale Discount” at “”. The minimum purchase price is $100. 

“IditaCoin (DGZ) is a Solana-based crypto utility token which will be used to access Iditarod programming, events and merchandise,” the website says, “and that’s just the beginning.  Now is your chance to be on the right side of history – buy DGZ today and let’s win together!”

An IditaCoin “whitepaper” suggests the coins will become more valuable as increasing numbers of buyers enter the market for IditaCoins, and thus those who buy early will not only be able to immediately start shopping Iditarod merchandise, and possibly other merchandise in the future, but will see the value of their IditaCoins grow over time. 

“We believe that the good you do, should do good for you,” the pre-sale website says by way of echoing that pitch. “That’s why we have allocated a large portion of total IditaCoin inventory to benefit not only the Iditarod – US 501(c3) charitable organization – but also independent charities dedicated to the advancement of dog well-being and the Native Alaskan communities that keep the Iditarod legacy strong.”

Neither the website nor the whitepaper, however, offer any specifics on what animal-welfare groups the Iditarod plans to provide financial assistance or how exactly Iditarod intends to will financial support for rural communities. The Iditarod Trail from Willow, a wide spot in the George Parks Highway 70 miles north of Anchorage, to the community of Nome on the Bering Sea runs through 12 to 13 predominately Alaska Native villages each year depending on the race route.

Rural relations

Sled dogs were once the norm in many of those villages, and some of the villages were once home to Iditarod competitors. But village dog teams are largely gone now, and it has been more than a decade since a musher from any of the Iditarod Trail villages has run the race.

The late Paul Johnson from Unalakleet was the last to compete in 2011 as the connection between rural Alaska, a land now dominated by snowmachines, and the Iditarod has steadily faded over time.

The villages along the trail haven’t fielded a top-10 competitor since 1983 when Eep Anderson from Takotna finished as the race runner-up. 

The race this year featured twice as many mushers claiming homes in Scandinavia as it did mushers living in any of the state’s 82 percent of communities unconnected to the state’s limited road system, let alone those villages along the Iditarod Trail

Alaska is a state sharply divided between the urban and the rural.  More than two-thirds of the population is clustered in the Anchorage and Fairbanks metropolitan areas at the north and south ends of the 362-mile-long Parks Highway.

Off the road system, there are approximately 240 villages, most of them scattered along the 365,000 miles of flowing waters that served as the state’s main transportation system before the arrival of roads and airplanes in the north.

Villagers still living along the historic Iditarod route that once stretched for more than 1,000 miles from the port of Seward to Nome espouse a love for the self-proclaimed “Last Great Race,” but the relationship between the villages and race organizers has become more complicated over the years as Iditarod has brought in increasing numbers of self-supported volunteers from Alaska cities or the Lower 48 to help staff race checkpoints.

With the Iditarod at the same time touting itself as a $3.5-million to $4-million event – money being the measure of success in the modern world of U.S. athletics – it is understandable that villages want a cut of the action,  but the race burns up a big chunk of that budget in the aerial supply and resupply of Iditarod checkpoints.

How to compensate villages for what some villagers have come to think of as an annual Iditarod invasion has become more and more of an issue for the race over the years, and there is no doubt the 10 percent of Iditacoin profits the whitepaper says Iditarod would set aside for “community incentives” would help cement village relationships.

If there are significant profits.

Where is the money?

Big on hype, the whitepaper is woefully short on details as to potential profits. It proposes the creation of 10 trillion Iditacoins, 2 trillion of which would “be allocated for the public raise,” which would help to determine the market value of each coin.

The value of the coins would then float up or down as the demand for IditaCoin use grows or shrinks. Cryptocurrencies have come under fire for these fluctuations and,  in many cases, the lack of any real assets to back their value.

Reserve Bank of India Deputy Governor T. Rabi Sankar in February compared cryptocurrencies to a Ponzi scheme. India has the second high adoption rate for cryptocurrency use, and Sankar is concerned.

Bloomberg quoted him warning a banking conference that “cryptocurrencies are not amenable to definition as a currency, asset or commodity; they have no underlying cash flows, they have no intrinsic value; that they are akin to Ponzi schemes, and may even be worse,” 

Sankar called for either an outright ban on them or some serious regulation, and the concern is not just in India.The European Union on Monday approved new rules to protect consumers from crypto fraud, according to Euronews,  and U.S. President Joe Biden last week ordered federal agencies to conduct an analysis of the benefits and risks inherent in the use of cryptocurrencies.

“The financial innovation and the technological innovation underlying this boom has a lot of potential benefit, but the risks and the costs are increasingly becoming apparent,” Brian Deese, director of the National Economic Council told CNBC in the wake of Biden’s order. “We need a 21st-century government structure to actually address this.”

Cryptocurrencies have now also become an issue in Russia’s war on Ukraine because of fears Russia could or is using them to evade economic sanctions the U.S., European nations and Japan have imposed to try to end the invasion.

“Russia and its banks could be looking at cryptocurrencies more closely because they could represent an alternative medium of international exchange to the dollar,” Dan Milmo, the global technology editor for The Guardian reported today.  “Cryptocurrencies could also bypass the international banking system that is key to enforcing sanctions as a listening post for financial transactions worldwide (a characteristic of cryptocurrencies that watchdogs and central banks dislike), by offering an alternative way to make irreversible cross-border transactions.”

Russia was previously among countries proposing a ban on cryptocurrencies. China banned them in September of last year and began pushing a digital version of the yuan, the Chinese equivalent of the dollar. 

What all this means for the fledgling IditaCoin, or the stability of its value, is impossible to know at this time, but as the Iditarod whitepaper notes Iditarod musher and Iditarod fans love an adventure.

“While many charities are focused on campaigns asking for crypto donations, we are busy breaking trial into a whole new territory,” the white paper proclaims.

Deviating somewhat from the current Iditarod race mantra that “it’s all about the dogs” – the real athletes in the annual, 1,000-mile race from Willow to Nome – the white paper declares that “the IditaCoin leverages the brand exposure and passion of the world-famous Iditarod competition. Each athlete (known as a ‘musher’) leads a team of 14 dogs on a 1,049-mile, life-changing journey through Alaska Wilderness; navigating storms; snow, ice, wind, team care and personal endurance. Iditarod mushers are extraordinary homo sapiens, tenacious adventure-athletes, part Magellan, part meteorologists, part magicians, sleep deprivation ninjas and soulful dog whisperers. The Iditarod is the embodiment of grit and the indomitable Alaska spirit.”

This, and the dogs, is what is apparently supposed to help lead many to convert hard-earned dollars into IditaCoins because, to quote the white paper:

“Let’s face it – crypto and canines have a deep love affair going on. There is a special alchemy between crypto enthusiasts and the adorable dogs interfacing multiple tokens/coins/crypto assets.”

That’s the pitch.

How the market will buy it – not to mention how much it will buy – only time will tell. But L. Sebastian Purcell, the senior advisor to IditaCoin and the “founder of the online crypto trading school,” according to his resume, was today claiming success.

“Well, we just had a successful pre-sale for IditaCoin ($DGZ),” he wrote on Twitter. “I think it’s the perfect timing to set up for the next run. Also, $LUNA is killing it for DeFi.”

Terra’s LUNA is a South Korean cryptocurrency on which IditaCoin appears to have been modeled. LUNA jumped 20 percent in value in one 24-hour period last week, according to the Motley Fool, a website for investors.

LUNA is also a so-called “stablecoin”  cryptocurrency pegged, as the Motley Fool put it, “to traditional assets such as the U.S. dollar.

“Terra has been one of the few cryptos to gain in value during 2020’s crypto slump,” the website reported. “Terra now has almost $1.5 billion in reserve to support UST, its U.S. dollar–pegged token.”

Iditarod has no such reserves to support anything.

Market share

The IditaCoin whitepaper also raises serious questions about the size of the market for an IditaCoin. In trying to hype the offering, the document pitches market demand with a reference to “over 200,000” subscribers to the Iditarod’s newsletter and “15,000-plus paid (Iditarod) race stream subscribers.”

Another way of looking at this would be fewer than 201,000 newsletter subscribers and less than 16,000 paid subscribers to the Iditarod Insider at an annual cost of $19.95 to $39.95. If all of those subscribers were buying the most expensive “ultimate” package, Iditarod would be netting about $600,000 revenue – small potatoes, tiny actually, in the world of sports today.

Compare these numbers to the 222 million Americans now believed to be esport gamers, and the $300 million they dump into their sport each year. And Americans, according to Global Sports Matters, are laggards on the global esport stage.

“The esports industry is a booming global phenomenon, projected to hit $1 billion in revenue in 2021,” the website reported. 

The globe’s biggest esport competition – The International 10 – last year put up $40 million in prize money, according to DOT Esports. The 10th ranked competition – The Dota 2 Asia Championship – boasted $3 million in prize money.

At the Iditarod’s peak, former champ Mitch Seavey dreamed of a $1 million purse. The Iditarod never got close to that goal. The purse this year is $500,000.

And there are likely far more young esport gamers in rural Alaska today than there are budding mushers, which doesn’t make anything easier for the race. Its limited fan base is one of the big reasons it has gone of in search of crypto-linked funding and even sketchier non-fungible tokens (NFTs), basically the digital versions of an artwork.

“NFTs refer to unique bits of code (hashed ‘smart contracts’) that are typically (though not always) stored on the publicly-accessible Ethereum blockchain,” according to the office of the U.S. Attorney for Manhattan, who is warning of all sorts of scams and frauds. “These ‘smart contracts’ in turn point to content (e.g., an artist’s digital painting, a sports highlight) that resides at a location on the internet (and which can be viewed).

“The provenance of these NFTs can then be tracked across the public blockchain, providing end-purchasers with a built-in chain of authenticity.”

Unless, of course, the NFTs have been faked, or the buyer has been lured into some sort of phishing site.

NFTs might, however, offer a certain, unique attraction for Idit-a-fans who could conceivably all get their own individual NFT photo of a specific location along the trail, and there could be money in this for Iditarod, which accurately notes the difficulty of fundraising these days.

“Passive giving is showing up more and more in the rearview mirror. Donor fatigues as a result of continuous fundraising ‘asks’ has led to disengagement,” the whitepaper says in one of the few paragraphs not drowning in hyperbole.

IditaCoin does offer the promise of possibly helping to free Iditarod from handouts, which are a difficult way to run a business. But the whitepaper might be overselling the value of IditaCoin to prospective purchasers.

“…We want you t know that when you join us on this adventure,” it says. “We will be laser-focused to make sure that the good you do, does good for you.”

The only way that really works is if the IditaCoin is indeed a Ponzi-style scheme wherein the demand for more coins keeps forcing the value of earlier-obtained IditaCoin higher. Think of a pyramid with a wide base feeding a skinnier top.

Still, this does have the potential to increase revenues for Iditarod, if it works, and to boost the incomes of Iditarod CEO Rob Urbach, Purcell and the rest of the team put together to build the IditaCoin plan.

“Ten percent, or a total of 1 billion Iditacoin, will be allocated for the team incentives and partnership expansion,” the white paper says. “Every member of the team involved in the initial launch of this project committed their time, talent, networks and tools without compensation due their belief in the project and commitment to the cause.”

Whether it can perform as well as Luna only time will tell. And even there the Motley Fool offers a warning:

LUNA has performed incredibly well this year and may continue to go from strength to strength. But all cryptocurrencies are risky, and there’s a lot of uncertainty surrounding the outlook for stablecoins right now. Make sure you understand how that environment might unfold before you invest.”

Thus one might want to think of the purchase of $100 of IditaCoin today as a nice contribution to Iditarod that might amount to more than that, but quite possibly won’t.

Correction: An earlier version of this story attributed the last finish by an Iditarod village resident to the wrong Johnson in 2010 instead of the right one in 2011.


















6 replies »

  1. Mr Medred ,
    Im impressed with your grasp of crypto. Maybe you will find more time to enlighten us in your easy to understand language. I personally think we should all be heavily invested in crypto as humanity freeing means of currency. He who controls the gold makes the rules issue. Yes it could be considered a ponzi scheme but for many it’s about revolution freedom personal choice and happiness. Im not yet invested but I certainly will be soon . Im just to paranoid about having my finaces and information connected to Internet without that being my knowledge forte .

    • DPR,I’m pretty sure we’re of different gens.That being said, to much bs with crypto.Account thefts, and of course volatility.Beyond $ denominated assets(with of course there requisite drawbacks),Id just rather have gold that sits there and does nothing (like crypto).But nobody can hack it….
      I own a bit of Coinbase stock (~1%) of various account balances, thats as close as I want to get.
      Theres a bigger exchange but not sure its on the stock exchanges.
      Blockchain is here to stay, crypto….well who knows..
      Good luck in the new paradigm

  2. Anything they try to decouple their backers from the coordinated, orchestrated anti-Iditarod mob is a good idea. Whether it works or not is another thing entirely. My guess is that they will have a few head fakes before figuring out how to get this done. Kudos to whomever came up with this approach. Cheers –

    PS: and no, I’m not invested in crypto.

  3. Thanks Craig. Thoughtful coverage of the trace and it’s future. IditaCoin is the latest in a long line of Iditarod CEO fantasies. (I may buy one as a souvenir of an event remembered as a wild glimpse of past times)
    For 2022! Great to see Brent Sass rolling down Front Street with a team of tail wagers after a challenging run. Cool that young mushers from Iditarod “bloodline” families are making their mark. Still it’s hard to see how the race survives. Costs of supporting kennels are so high on and off the road system. Surviving year by year may be what we can hope for… but that’s not so unusual for The Last Great Race. And as long as that continues, “Real Good” as Smokin’ Joe Redington often said

  4. What a joke…in bigger news, I read that Brent Sass got $2,500 for winning the race. That doesn’t even pay for dog food for 1 year of keeping an Irod dog team. Seems like the golden era of free trucks and big “Benjamins” is over for mushers.

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