What Dogecoin Teaches Us About the Future of Finance

• Dogecoin has created a new type of investor.
• Millions have bought into a project with little financial value outside of those who hold it.
• That phenomenon has now crept into retail investing and the broader markets.

What started out as a joke has become the poster boy for a movement that is trying to disrupt the financial sector. 

Dogecoin, the cryptocurrency created by software engineers Billy Markus and Jackson Palmer as a bit of fun has found itself caught between the whims of its famous followers - Elon Musk, Mark Cuban, Gene Simmons, Snoop Dogg - and financial professionals who have labeled the DOGE as little more than a Ponzi scheme. But behind all the hubris is a kernel of an idea: that the future of finance is going to be increasingly dominated by retail investors with a high-risk tolerance placing bets on projects that have value financially but more importantly, culturally to communities on platforms like Discord and TikTok. 

Laying the meme foundations
While Wall Street has been grappling with the rise of ‘meme stocks’ - a nebulous term used to define stocks and financial products that have been hyped on social media - Dogecoin laid the foundations for this movement nearly a decade ago. 

Dogecoin was created in 2013, as a hard fork of Litecoin, itself a hard fork of Bitcoin. Palmer and Markus had witnessed the explosion in alternative currencies that had been created that year and decided they’d create their own. 

Their idea was to combine a popular meme, in this case, Doge, which was pictures of a Shiba Inu dog accompanied by multicolored text in Comic Sans with a simple cryptocurrency as a way to market the product.  “A lot of cryptocurrencies—namely Bitcoin, with its history with Silk Road—has been sitting in the shadows. It’s associated with the dark web,” Palmer said in an interview shortly after the coin’s release.  

“I think by combining a coin with a meme, which is something that people see spammed to hell on their Twitter and Facebook feeds every day, I think it adds a face, the Doge face, and makes it more accessible. It’s something people can get behind. It’s no longer this shady thing that geeks in basements use.”

The currency, which had almost no utility outside of the sub-Reddit where members tipped each other with DOGE whenever they posted something funny or interesting, saw its 24-hour trading volume go from zero on December 13, 2013, to $3.2 million in a month. 

Source : decrypt.co