Note (opinion)

A joke becomes a serious joke; Dogecoin and the New Meaning of Money


Dodgecoin digital currency and the behavior pattern of its fans on social networks has become a strange phenomenon and has attracted the attention of many experts. The behavior of this currency and its supporters can be examined from an external perspective, in addition to their impact on the internal developments of the digital currency market.

Michael J. Casey, CEO of CoinDesk Website, at an essay He recently took a look at Dogecoin’s role in the evolution of the concept of money. He believes that there is no more important narrative to reconsider money than the story created by Dogecoin. We read Casey’s article below.

Interestingly, in a week that was bad for the markets, the news that got the most media attention was not the dramatic 24% drop in Bitcoin (BTC), but the spectacular rise of Dodge Coin in the middle of last week. My article this week examines why this phenomenon, while literally based on a joke concept, is not something we want to laugh at. The Dogecoin’s amazing military influence has a lot to say about the realignment of power in the digital age.

Age of Dodge

Part of me was worried that I would give in to temptation as I wrote this article.

There is a perceptible concern in Quinn Desk’s newsroom that Dogecoin’s news coverage may make it seem as if we prefer the easy clicks of its fans to the risk of encouraging investing in coins that have no inherent technical advantage.

In the meantime, one Posted I read great from Max Read about the future of money, which was published last week. This post is inspiring Cover image Interestingly, New York Magazine was asking a question about NFTs. It was then that I realized that there is no longer a narrative about making money more important than the insane rise in Dogecoin prices.

Dogecoin’s madness doesn’t just look silly, it’s really silly; The Dogecoin community failed last week to raise its price to $ 0.69 on Tuesday. The Dogecoin community decided to raise the price of the Dogecoin to 69 cents by artificially purchasing it alone, in honor of an old joke on April 20, 1969, which marked the day as National Cannabis Day. With all these stupid moves, real and serious money is at stake.

In this sense, Dogecoin’s stormy ascent marks an important moment in human history. Society’s traditional “narrative” of money is collapsing, and new and complex concepts such as SPAC and NFT are flourishing, and gaming, entertainment, and mass buying can dominate markets.

A special-purpose acquisition company is a kind of paper company that is listed on the stock exchange, just to buy a private company.

Dodge is part of a fierce competition for meaning in the world of money. This digital currency is a testament to the shift in power in the 21st century, which has been exacerbated by two separate financial crises and the rise of social media.

End of narrative

A joke becomes a serious joke;  Dogecoin and the New Meaning of Money

We start with the idea that money is a narrative.

Familiar readers know that I am a fan Yoval Noah Harari I am (Yuval Noah Harari). In his best-selling book, The Wise Man: A Brief History of Mankind, he argues that human civilization is built on our ability to come together around concepts that are imaginary but universally accepted.

Harari sees “company” and “nation-state” as examples of these constructed ideas that, along with several others, have enabled us to form complex societies. However, he says that money is “the most successful story ever told.”

Currencies have no intrinsic value. Sorry gold fans, your favorite shiny metal is just as much about paper money and digital currencies. The value of a currency is the common belief around which value is formed. Because people believe that something is worthwhile, so it is worthwhile.

Of course, this does not mean denying the fact that certain types of money have characteristics that help to resonate with their narrative; This is why Bitcoin (BTC) can be described as “sound money”, but not Dodge Coin. But in the absence of that belief, all money is worthless.

Healthy money is money whose purchasing power (price versus something else) does not change suddenly.

For most of the past two millennia, the prevailing view has been that the value of money comes from the ruler, because the tax-competent government has a vested interest in optimizing the performance of social accounting, which is the real purpose of money.

Then in recent times, in the age of Fiat money, it was the “goodwill and credibility” of the government (instead of a steady supply of gold) that guaranteed this value. Later, this narrative was modified with the idea that central banks independent of political institutions could maintain its value by managing the money supply for the benefit of society.

Now that we are entering a stage where government-sponsored money competes with both decentralized cryptocurrencies such as Bitcoin or Dodge Coins and corporate currencies like Diem (Facebook’s digital currency) or Starbucks concessions, that limited narrative is collapsing. The first catalyst for this collapse appeared a little over a decade ago.

Moment of crisis

In his article, Max Reed follows the current collapse [روایت] Follows an interview with Ben Bernanke, the then head of the US Federal Reserve, at the height of the financial crisis in 2009 on CBS’s “60 Minutes.”

Asked if the central bank’s injection of money into troubled banks would be financed by taxpayers, Bernanke said: “To lend to a bank, we only increase the amount they have on the computer with the central bank. . »

He was saying something that has been done for a long time: the central bank makes money by increasing or decreasing the banks’ reserves, but for the confused masses struggling with the financial crisis, it was an explicit challenge to the fundamental narrative.

These remarks made it clear that money-making does not adhere to the sacred rule of scarcity and has almost nothing to do with coins and banknotes, which in our collective imagination are considered as representative units of value. Bernanke’s remarks showed money as a digital accounting system that a single entity can set up with a few clicks on a computer.

In March 2020, a new crisis occurred: Covid-19. In the midst of the global economic downturn and the desperate struggle for the dollar, the US Federal Reserve fired on its “quantitative easing” policy, announcing that it would add as many computer-based dollars as needed to banks’ balance sheets to prevent a financial collapse. The program has no ceiling.

The central bank also extended the type of assets it accepted in exchange for new dollars to corporate debt, stock exchange funds and other non-government financial instruments. It now looks like the US Federal Reserve is buying almost everything to boost markets.

Meanwhile, the numerical prefix “trillion” attached to stimulus packages in this new era of “infinite quantification” is so large that, according to Bloomberg columnist Jared Dillian, “money is being lost. “It means itself.”

This erosion of meaning causes people to question the value of money, and this naturally leads them to buy other things. This is seen in the increase in the price of assets that are not externally linked to the value of the real world; Assets such as Bitcoin, Gamestop stocks, NFT tokens and of course DOGE.

But before we turn to Dogecoin, consider another factor: social media.

Online communities without a leader

A joke becomes a serious joke;  Dogecoin and the New Meaning of Money
Every mobile owner has an effect

Social media has challenged the centralized structure that organized society before the Internet. Although the Internet as a whole has failed to address inequality in the distribution of wealth, empowering disseminated opinions has had a democratic effect on all, allowing communities to produce new narratives to organize around.

This is a meme culture. Social media allows the sharing of narratives about memes, and this in turn creates new forms of belief, purpose, and camaraderie. And thus, these communities can withstand the established order at least once.

This is what we saw in the GameStop phenomenon. A community of seven million on Reddit raised the stock price of their favorite gaming retailer. Hedge funds tried to invest in shorts with the view that the company’s stock price was lower than its real value, but Reddit users suffered huge losses.

The Dogecoin phenomenon is similar in that there is only one fundamental difference: there is no central point for a regulator or a powerful asset manager on Wall Street to press. This is a big difference with the GameStop case. In that case, regulators and private equity funds, in a joint effort, stopped trading GameStop shares on the Robinhood platform, causing the stock price to fall. Robin Hood, the software platform of the WallStreetBets group, was in Reddit, through which it bought shares of GameStop and raised its price.

In the case of Dogecoin, not only is no one responsible for this digital currency, but its trading activities have spread to dozens of exchanges, some of which are themselves decentralized.

Who or what will the regulator follow? The Dogecoin, which was literally a joke, was created by someone who not only left the project but went out of digital currency altogether. Dodge Coin, like Bitcoin, had no pre-mined coins or initial coin offerings to generate tokens for the founders before launch. There is still no recognizable team in this digital currency that can manipulate its performance for its own benefit and at the expense of others.

A combination of marketing and humor

A joke becomes a serious joke;  Dogecoin and the New Meaning of Money

This structure, at least for the time being, allows Dodge’s fragmented and fanatical community to engage in collective work to create memes and stir up controversy, and to mix the coin with business.

Also, this structure creates unique opportunities for others to reach out to this quirky and community-oriented brand and its common logo, the Shiba Inu dog. This logo is an image of fun, absurd irony and common interests; The right brand of the Internet age led by the generation and the millennial generation. This in turn, with the efforts of brands to use the valuable participation of the Dodge community, leads to the emergence of a new model of coexistence for marketing.

One example of this was Slim Jim Food Company’s advertising campaign using Dogecoin on social media. But it was built in the early days of the Dogecoin community, where enthusiasts spontaneously participated in various marketing campaigns to increase the coin’s popularity.

CoinDesk’s Ollie Leach recently addressed this issue واکاوی has done. In 2014, a Nascar race driver was sponsored by Dogecoin, and in a genius move, a Jamaican Babsled team was funded by Dogecoin.

Dogecoin will never be a value reserve, a global reserve currency, and a medium of futures trading in a decentralized economy that has or wants to have Bitcoin. But in this unique convergence of memes, interesting branding, strong community structure, and relatively powerful marketing influence, we see how the digital media economy in the 21st century is reinterpreting money.

This does not mean that you should invest in Dogecoin. Rather, it means that the Dogecoin phenomenon matters.

Off-chart: Dodge vs. Giants

The chart tracks Dogecoin’s stormy price trend compared to the performance of some of Wall Street emails.

Dogecoin and the New Meaning of Money

Just two weeks ago, the total market value of the Dogecoin was $ 8.3 billion, slightly lower than Hyatt Hotels. Dogecoin then began to grow, not only becoming the chain hotel, but also surpassing the total value of the engineering giant Halliburton, the Credit Suisse Banking Complex and the Aflac Insurance Company. Then early last week, its total market value rose to more than $ 45 billion, surpassing the 330-year-old British bank Barclays. On Monday, the total market value of Dogecoin reached $ 53.98 billion, beating Swiss banking giant USB.

The total market value of the Dogecoin, of course, has since declined and is now slightly above $ 40 billion, which is equivalent to the asset management giant T. Rowe Price.

Not a bad performance for a joke coin.

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