How A Meme Went On To Become One Of The Largest Entities In Cryptocurrency
We take a look at the satirical beginnings of the Dogecoin, its meteoric rise, plans for the moon and how a meme became one of the largest Cryptocurrency's in the world.
On April 1st, Elon Musk tweeted about a new space mission with his company SpaceX . But what the people didn't know at the time was that this news brought with it a twist for the world of Crypto as Musk announced that he had plans of putting a literal “Dogecoin on the Moon”.
Yes, you read that right - Elon Musk plans on launching and putting a Dogecoin on the moon. And to further add to the bewilderment, the whole mission is paid for in Doge.
But how did a meme about a dog become such a big entity in the world of Crypto in the first place?
It all started as a joke when in 2013, Jackson Palmer who was working as a product manager in Adobe Inc created Dogecoin as a means of satire due to all the hype that was surrounding cryptocurrency at the time.
After getting some positive feedback on social media, Palmer bought the domain dogecoin.com and joined forces with Billy Markus, a software developer at IBM. Markus wanted to create a digital currency, but couldn’t promote his creations, and on discovering Dogecoin and the buzz surrounding it, reached out to Palmer to build the back-end software of the coin!
Although initially the coin was created purely as a lighthearted alternative to Bitcoin - with its uses in its initial stages being limited to giving tips online or crowdfunding social causes.
The community has always advocated for fundraising for different causes and charities, one such cause is a fundraiser for the Jamaican Bobsled Team which even though qualified, could not afford to go to the Sochi Winter Olympics. On January 19th, 2014 a fundraiser was created by the Dogecoin community to raise $50,000 and by the second day, $36,000 worth of Dogecoin had been donated!
The Dogecoin community also went on to raise funds for a second athlete, Shiva Keshavan, a six-time Olympian and the first Indian representative to compete in the sport of luge during the Winter Olympic Games who was struggling to raise funds after India was suspended from the International Olympic Committee.
They also began collecting funds to build a well in Kenya, specifically in the Tana river basin by working with Charity Water. Led by Eric Nakagawa, the community aimed to raise $30,000 equivalent worth of Dogecoin (which was 40,000,000 at the time!) - all before March 22nd which is World Water Day. They were successful in collecting donations from over 4000 donors including one benefactor who donated approximately $11,000 or 14,000,000 in Dogecoin!
Additionally, other instances include the community coming together to raise money in 2013, after there was a hack at two major wallets known as Dogewallet and Instadoge and reimburse those who had lost their Dogecoin - they raised $13,545 or 30 Million coins (at the time).
In 2014 they raised 67.8 million Dogecoin which is equivalent to $55,000, at the time, to sponsor a NASCAR Sprint Cup Series driver named Josh Wise. Wise's car had a sponsored paint scheme in the theme of Reddit/Dogecoin and was driven at the Aaron’s 499 at Talladega Speedway.
The coin has gone on to become one of the largest and most recognisable cryptocurrency coins in the world - but this traction though good has received some criticism as well. The irony behind the fact that it started as a joke and a satire on the world of cryptocurrency isn't lost, and many financial experts and mainstream media have a hard time taking the company seriously.
Another issue is the coin's history of scams where it has often been described as a pyramid scheme and been deemed susceptible to hacks such as the one in 2013, as well as 2014, when $55,000 worth of Dogecoin (280 Million Dogecoins) was stolen. However with notable celebrities like Snoop Dogg and Gene Simmons backing the cryptocurrency and even Mark Cuban, owner of Dallas Mavericks, announcing they will accept Dogecoin as a source of accepted payment for team merchandise and finally Elon Musk coming aboard the doge-train, all point to the fact that the coin just might be here to stay.
An example of just how strong the celebrity backing and influence can be directly attested to Elon Musk and his series of tweets. In February of this year the multi-billionaire CEO of Tesla and SpaceX came forward with his support of Dogecoin and the coin's value went on to surge more than 50 percent! This is not the first time we’ve seen something backed by Musk making a major impact on this industry with Elon's earlier tweets about GameStop causing the company's share value to skyrocket as well.
However, this is bigger than celebrities - this is about how external factors play a bigger role in the promotion of the coin rather than any other factors. But now the question arises, why is it not used as a day-to-day currency if it’s so popular and continuously growing?
The issue is the same as using something like oil as a currency in daily lives. The value is described as extremely "volatile and seasonal" with the instant changes in the market causing the coin value to rise or fall overnight! And with these values being affected by external factors such as celebrities and influential individuals a simple tweet in today's world can cause unexpected surges and recessions (while a simple tweet from Elon Musk can cause the value of a coin to rise, alternatively calling a crypto a "hustle" on SNL Live can cause the value to fall massively as well!)
Be it cryptocurrency or the stock market, the main takeaway seems to be that no matter what you invest in - it’s important to be careful, do the due diligence and research before you put in any money.