It’s been 11 years since Bitcoin first came into this world, but most of us still have no real understanding of what a “crypto-currency” is, or how it works (other that you can use it to buy drugs on the dark web). Even many experts in the world of finance are confounded by crypto-currencies, with some arguing that it’s the best thing since sliced bread while others darkly warning that the whole thing is a convoluted ponzi scheme. But with new ‘coins’ being introduced every few months and valuations jumping up and down like a caffeined-up-toddler on a trampoline, it’s important to educate people on how they’re valued and the risks of investing in them.
Enter Tanmay Bhat, the Indian comedy scene’s resident finance expert. Over the last year or so, Bhat has been educating his audience about different aspects of personal finance, cryptocurrency, mutual funds and more through his series Clueless, available on the Honestly By Tanmay Bhat YouTube channel. His latest video focuses on one of the most bizarre convergences of investment and meme culture—”dogecoin.”
Here are some of our key takeaways from Professor Bhat’s latest econ class:
The joke heard around the world
The internet has always been one to take jokes a little too far. Dogecoin is one of those jokes. What started off as a meme by two techies Jackson Palmer and Billy Markus, the crypto has gained a colossal rise in its value since memelord Elon Musk tweeted about it. After Bitcoin (the daddy of all cryptocurrencies) entered the market, there was an influx of various coins in the market including Ethereum, Ripple and Litecoin, dubbed as “alt coins”. Palmer and Markus founded Dogecoin to satirise this coin gold rush, after Markus’ initial attempt called Bellcoin was unsuccessful. “They never thought this would make them very very rich,” says Bhat. “They just really liked the [shiba inu doge] meme and wanted to immortalise it.
Crypto For Good
“It was always supposed to be that fun, stupid currency in the middle of this serious industry,” says Bhat. “So, it was always used for fun and good causes.”
Dogecoin was first used for “tipping” across various websites including Reddit, where people would give the crypto-currency to a funny comment or post. It was also used for some wholesome causes such as raising funds for India’s Winter Olympics team in 2014, and Jamaica’s bobsled team, as well as funding a well in Kenya during the water crisis. “The point being that dogecoin’s vibe is so cool and joyful, that’s why people love it.”
The More The Merrier
In contrast to Bitcoin, which has a hard cap on “minting” new coins beyond the 21 million in existence, Dogecoin is unlimited in nature. “These properties reflect the seriousness of the founder when he made Dogecoin,” laughs Bhat.
The Meme Bull Run
This month, the internet took this meme currency’s valuation to an all-time high of 9 billion dollars! After the GameStop saga, people including Snoop Dogg, Jean Simmons and Elon Musk started investing in Dogecoin. “I think as financial products become more and more accessible, and it becomes easier to start investing, such meme momentum/’fun’ investing things could blow up more often,” remarks Bhat, who invested Rs. 5000 4himself when the crypto-currency was rallying.
But Bhat advises his fans to practice caution and not act impulsively during such financial phases. His answer to the most pressing question about jumping on this trend is, “Meme investment is a double-edged sword. Just like any other joke or meme, attention on that asset is very concentrated for a specific amount of time.”