How I learnt to stop worrying and love Dogecoin
Aaron PatrickSenior correspondentFeb 8, 2021 – 11.09amElon Musk convinced me.
The evangelists, futurists and hucksters are all wrong. Bitcoin is not an economic phenomenon. It will not replace cash, bring down tyrants or deliver world peace.
Tesla and SpaceX founder Elon Musk returned to Twitter after a two-day break to promote Dogecoin. Getty
It will not create a utopia where trust is no longer necessary for commercial transactions and the provenance can be proved of almost anything, from art to artichokes.
Bitcoin is not a technological god. Bitcoin is a punchline. Just ask Elon.
Last Thursday the business savant roared back onto Twitter – a medium he had vowed to shun two days earlier – promoting the Dogecoin cryptocurrency, which was created in 2013 as a joke on a burgeoning industry that might have been a joke itself, although no one at the time really knew.
Now, thanks to Musk and others, the joke currency has turned into real money, which makes it even funnier. Dogecoin’s market value reached $US10 billion ($13 billion) at the weekend, making it the eighth-biggest cryptocurrency, Bloomberg reported.
“Dogecoin is the people’s crypto,” Musk tweeted on Thursday.
The Tesla and SpaceX founder also tweeted a meme – a visual gag – of himself as a monkey from The Lion King movie holding up the golden-haired puppy that is Dogecoin’s joke mascot. The post got almost 900,000 likes.
“ur welcome,” Musk wrote under the meme, which I think is a way of claiming credit for a Dogecoin price spike after he compared it to a rocket – by posting a rocket’s jetstream and the word Doge.
Qantitative analysis this is not.
Not so silly
The currency has become an extreme example of the truism that cryptocurrencies, indeed all money, only has value when people believe it does.
But why Dogecoin, which was created to mock financial faith in computer code?
Jason Potts and Chris Berg, two academics at RMIT University, have come up with a theory which, in any conventional market, would sound silly.
In this case, with Simba moving prices, they offer as good an explanation as any.
“Dogecoin ... is a meme people add to their digital wallet because they think it’s funny,” they recently wrote. “In an open digital economy, memes move markets.”
Passing the time
Before the internet, fat broking commissions made share trading an expensive and serious activity.
Today, the rise of online trading, which in the US is marketed as free, has turned investing in gyrating markets and discussing it on social media into a pastime in itself.
As Musk acknowledges, trading Dogecoin is for laughs.
“The most ironic outcome would be Dogecoin becomes the currency of Earth in the future,” he said recently.
Social lives of men
In one sense, Dogecoin’s popularity reflects changes in the social lives of young men.
The pandemic has confined millions to their homes, shut bars and pubs, and disrupted sport.
Left with limited lives in the physical world, the internet has become the primary place many communicate with other people. Investing is even better lingua franca than sports because it requires almost no cultural or national familiarity.
And besides. Who doesn’t want to be rich?
That’s why Reddit’s WallStreetBets chat room has around 8.5 million registered contributors.
Their well-described influence over the GameStop share price so quickly permeated popular culture that the page’s founder, Jaime Rogozinski, last week sold his life story to Hollywood producer Brett Ratner for more than $100,000.
While GameStop’s valuation appeared detached from its financial prospects, at least it has some, unlike Dogecoin.
Don’t ask me why that doesn’t matter. Ask Elon. He’s in on the joke.
