In recent weeks, it has been hard to get through a day without running into a headline, or 50, referencing Dogecoin (DOGE). The meme cryptocurrency has seen its price appreciate exponentially on the heels of a series of celebrity endorsements, including billionaire Mark Cuban, Kiss member Gene Simmons and entertainment icon Snoop Dogg.
It is easy to dismiss what is going on with DOGE amid another round of hype-fueled frenzy — like the ones seen before — especially with “The Dogefather” Elon Musk workshopping ideas ahead of his Saturday Night Live hosting gig on May 8.
However, this time, something never before seen is happening: The use of Dogecoin for payments has been ramping up along with the coin’s price. In addition to the National Basketball Association’s Dallas Mavericks, a team owned by Dogecoin proponent Mark Cuban, Major League Baseball franchises are now also getting into the DOGE game. But is the growth of DOGE payments sustainable outside of hype cycles?
Much likable medium of exchange
Money can be a tool for coordinating human activity. To take on this role, the asset used as a medium of exchange must command the positive sentiment of a large enough audience. This favorable attitude can stem from a long-entrenched convention (as in the case of fiat), technological soundness (like a token designed to facilitate monetary transactions on a blockchain), or simply the fact that people like it or think it is easy and funny.
Dogecoin lacks technological robustness; it hasn’t seen a significant software update in many years. Until recently, the asset’s practical usage was mainly confined to tipping people on forums for witty remarks.
Yet, it is not unthinkable that the combination of Dogecoin’s memetic power — something it has demonstrated on multiple occasions in the past — plus the fading boundaries between collective sentiment and collective action, could mean more for adoption as a payment tool than for a sound reputation or technological superiority.
Granted, the chief motivation for businesses to start accepting DOGE payments at this time is likely the ticket to the hype train that making such a move confers. In addition to viral fame, a brand can benefit from the support of a vibrant Dogecoin crowd interested in boosting businesses that are shilling their bags on social media — a relationship some observers label as “mutually parasitic.” But it is anyone’s guess what will happen when a critical mass of businesses decide to take this route.
Very zoomer money?
Analysts often cite Dogecoin’s popularity with younger internet users as the rocket fuel that can eventually take it to all kinds of incredible places. In a recent interview, Ran Neuner, co-founder and CEO of blockchain investment firm Onchain Capital, suggested that young TikTok users could generate sufficient network effects to make DOGE a viable tool for online transactions.
It is difficult to estimate how popular Dogecoin is with teenagers and young adults. Indeed, it is a compelling idea that the coin that started as a joke and now has a $77-billion market capitalization embodies the nihilistic spirit of the younger generation. It is also true that last summer’s price pump began on TikTok.
Yet, when it comes to the question of how many zoomers — members of Generation Z — are using DOGE, the most honest answer is that there is no way of knowing. Reliable survey data on crypto usage is hard to come by, doubly true for age-group-specific data. According to the latest iteration of investment bank Piper Sandler’s “Taking Stock With Teens” survey, 9% of teenagers in the United States reported having traded cryptocurrencies. While the almost one-in-ten statistic looks solid, there are no details on which assets the respondents have traded.
Another recent survey by financial group Charles Schwab measured cryptocurrency trading behavior among young adults in the United Kingdom. It found that more than half of British investors between the ages of 18 and 37 traded or held cryptocurrencies, as compared to 25% of those who bought stocks. Again, no details on the usage of specific coins or the share of respondents who reported being active on TikTok.
In a follow-up conversation with Cointelegraph, Neuner likened the Dogecoin following to a rebellion movement: “Dogecoin has become anti-establishment, anti-normal,” adding further:
“People who don’t like to follow the rules turn to Dogecoin to show that they can make anything work, even against the odds. I said this many times: I think it’s always 20% about technology, 80% about adoption. And in this case, Doge is actually being adopted.”
So wide appeal
While it remains an open question if a single age or interest group can drive an asset’s ascent to the coveted status of mainstream payment method, Dogecoin potentially has appeal to a wide array of users. In addition to the nihilistic youth and meme-loving day traders, it could be an easy and friendly entryway for beginners in the digital asset space.
Devoid of the pretense of a technologically complex asset, the pup-emblazoned coin is well-positioned to become the first crypto for the less tech-savvy newcomers arriving in droves as crypto goes more mainstream.
Furthermore, the air of unseriousness could attract people nostalgic for the times before Bitcoin (BTC) derivatives were traded on major institutional platforms. Dogecoin could be the last bastion of the olden crypto spirit that traditional finance sharks would want to deal with — hence, the people’s coin?
Expectedly, many crypto experts are having none of it. When asked if Dogecoin has any future as a medium of exchange, Joshua Frank, CEO of cryptocurrency data analytics firm The TIE, responded to Cointelegraph:
“No. It is a funny meme, and it has gained a tremendous amount of mainstream attention, but I don’t foresee any future in which Doge is the coin of the internet.”
Still, with the right combination of social sentiment, well-timed celebrity tweets and forays by engagement-seeking big brands, it does not seem unfeasible that DOGE could find mass popularity as a payment tool in some sizable corner of the online economy.
But price speculation will remain a big concern as, until it achieves enough network effect, whales or influencers could easily sway the coin.
Ray Schuetz received a Masters Degree in computer science from The University of Texas (Austin). Ray has been working as a full-time blockchain consultant for the past 3 years. In his spare time, Ray enjoys writing for EthereumCryptocurrency.com and other crypto news publications.