Cryptocurrencies took the world by storm in 2017. Kick-started by the meteoric rise of Bitcoin, the craze kept building as other alternative cryptocurrencies, commonly referred to as altcoins, began reaching lofty prices. As interest in the market grew, individuals looking to make a quick buck by riding the seemingly infallible roller coaster began buying tickets. The more people invested, the higher the prices went. It was sheer mass hysteria, driven by the Fear of Missing Out (FOMO), that propelled the prices of several cryptocurrencies into orbit.
In the cryptocurrency market, all it takes is a jargon-laden whitepaper, vague promises of fulfilling untapped potential, and exaggerated corporate partnerships to draw in investors by the dozen. This trend led to the birth of several fraudulent altcoins, but it also birthed a less criminal and more hilarious fad – joke cryptocurrencies.
With hundreds and thousands of nonsensical altcoins flooding the market, a few people began creating spoof cryptocurrencies and brazenly promoted their absurdity as a selling point. There were harmless parodies, intended for nothing more than a few laughs. However, the hysteria and buying patterns referenced above drove the prices of these gag cryptocurrencies up to bizarre heights. Even the creators of said altcoins could only look on in bewildered amusement. Once such skyrocketing joke cryptocurrency is Dogecoin.
In November 2013, while the cryptocurrency world was still in deep slumber, a product manager at Adobe named Jackson Palmer cheekily tweeted about investing in a made-up currency called Dogecoin. Soon, with the help of Billy Markus, a software developer at IBM, he brought the idea to life. Featuring the face of a Shiba Inu dog (popularised through the doge meme) as its logo and driven by an active Reddit community, Dogecoin soon started gaining traction.
Its initial popularity bore promise. While he had created it as a joke, Jackson Palmer realised that his cryptocurrency, thanks to its incredibly low price, was a good way for amateurs to learn the workings of the market without investing large sums. Furthermore, members of the Dogecoin community turned out be an altruistic bunch. Through the ‘Dogecoin Foundation’, the community donated to charitable causes such as sending $30,000 to Kenyans in need of drinking water, helping the Jamaican bobsled team participate in the Winter Olympics, and raising over $25,000 for a British organisation that trains service dogs for children with disabilities.
However, all good things come to an end, and so it was for the Dogecoin community. A man going by the name of Alex Green (whose real name was allegedly Ryan Kennedy) began making a name for himself in the community through generous tips. He would send hundreds and thousands of dollars to charities and even total strangers. Once he had established himself as a virtuous member of the community, he then announced that he required funding for a new cryptocurrency exchange he was creating called Moolah. Long story short, the whole operation turned out to be a scam, and Green made off with something between $2-4 million. The Dogecoin community was understandably shattered, and it ceased to be a fun environment for newcomers to learn about the market. But this was in 2015, and two years later, the story took yet another surprising turn.
When Bitcoin, Ethereum, et al began their FOMO-driven ascent out of the deep last year, there was no shortage of small-time investors looking to hop on the bandwagon. For most of them, however, established cryptocurrencies like BTC and ETH were a bit too expensive. These smaller investors wanted something that was cheaper and could hence record a higher growth percentage in a shorter time span. Sub-$1 currencies like IOTA and Ripple are arguably the best examples of how this mindset drove up prices of such altcoins. But while these two at least have real-world applications, parody cryptocurrencies too ended up witnessing a price hike.
Dogecoin, which had not received a software upgrade since the 2015 fiasco, went through its second period of popularity and this time, it made quite a splash. Its market cap of around $20 million at the start of 2017 briefly crossed $2 billion a few weeks ago before settling around the $850 million mark (at the time of writing this). Even Dogecoin’s creator Jackson Palmer has been left incredulous by the market’s behaviour and has voiced his apprehension about whether the community will be able to recover ‘when (not if) the bubble bursts.’
Meanwhile, several other joke cryptocurrencies have mimicked Dogecoin’s price rise. From coins for the dental industry (Dentacoin, with a $750 million market cap) and the cannabis industry (Potcoin, $52 million market cap) to ones named after world leaders – TrumpCoin ($1.4 million market cap), PutinCoin ($5.9 million market cap), TheresaMayCoin (market cap of $186,000) – there seems to be no shortage of parodies flooding the already inundated market. Sanity, it seems, is the only thing in dire shortage in the cryptocurrency world, which is likely to be in for a rude awakening when it returns.