The rise of meme coins has been a surprise not only in terms of the growth of their collective market value, but also their utility. The leading meme coin Dogecoin was originally launched as a joke by its co-founders in 2013 had reached a market cap of over $65 billion in May. Maybe the clue to its later success is in its origination, as a fork of Lucky Coin, itself a fork of Litecoin, which was a fork of Bitcoin! While its original creators never intended it to become so popular, or to rise in value to such stratospheric levels, itâs clearly âtaken on a life of its ownâ to coin a phrase. Now thereâs a new twist in the Dogecoinâs tale, with the backing of celebrities like Teslaâs Elon Musk and Shark Tankâs Mark Cuban, itâs now being used for payment. So how seriously should we take this latest chapter in the development of meme coins, as a form of payment?
While itâs tempting to see the use of Dogecoin for payment as one more inexplicable jump in its unlikely evolution, its brief history shows whatâs a consistent driving force behind this â its community. Just two weeks after its launch in 2013 the Reddit forum r/Dogecoin had over 19k members. Itâs this community that drove the first real use of the coin, when in 2014 it quickly raised $30,000 to send the Jamaican bobsled team to the Winter Olympics, in a real-life version of the comedy sports movie âCool Runningsâ.
And without a PR agency to spread the news, the story was picked up by media outlets, broadcasting the meme coin to the world. Dogecoinâs fun meme-driven community backing and simplicity to use are key to its popular success. Maybe it found a market by accident rather than design, but that also underlines the power of memes to spread ideas and grow products.
Itâs perhaps not surprising that Shark Tank star and billionaire owner of the NBA team Dallas Mavericks, Mark Cuban, told US-broadcaster CNBC recently that not only is Dogecoin âa medium that can be used for the acquisition of goods and services,â but that also "the community for doge is the strongest when it comes to using it as a medium of exchange". This was in turn endorsed by Elon Musk, who tweeted: âIâve been saying this for a while.â So how did Musk, with his Tesla and SpaceX commitments, get so involved with Doge?
Apparently, his first contact was in 2018 when Musk asked Doge co-founder, Jackson Palmer, to help him with Twitter scam bots. The next year in 2019, he tweeted that, âDogecoin might be my fav cryptocurrency. Itâs pretty cool.â His follow-up tweets in 2020 only served to inflate the prices of Doge, including in January 2021 when Musk helped send Dogecoin prices up 800%.
So how is Musk âputting his money where his mouth isâ and going from meme to payment promoter? The answer lies in his SpaceX business. In the first quarter of 2022 SpaceX will accept Dogecoin as full payment for a payload on the officially titled âDOGE-1 mission to the Moonâ. DOGE-1 will fly a 40-kilogram cube satellite as a payload on a Falcon 9 rocket, with a hi-tech payload. SpaceX also confirmed that the DOGE-1 mission would adopt Dogecoin to set the standard for âinterplanetary commerceâ. Musk sees the meme coin as having a future in payments thatâs not simply confined to planet Earth!
A latecomer to the meme coin payment party, entrepreneur, and star of Shark Tank Mark Cuban, is altogether more down to earth with his meme coin payment proposals. Cubanâs basketball team, the Dallas Mavericks, is rolling out the coin for payment with the help of BitPay, which is providing it as a payment option for its merchants and consumers. The blockchain payments company confirmed that, âMavs Fans for Life (MFFLs) can now use Dogecoin to buy tickets and merchandise online, making Mavs merchandise more accessible to MFFLs everywhere, a decentralized, peer-to-peer digital currency, Dogecoin enables customers to easily send money online with very low transaction fees and fast transaction times.â Commenting on the Doge-related deal Cuban admitted they provided Dogecoin âbecause we can!â. He added that for fans who wanted to know more, âwe strongly encourage you to talk to your teenagers who are on tik tok and ask them about itâ.
So, what makes the meme token so attractive for payments, beyond its popularity? BitPay said Dogecoinâs large supply and low price facilitated âefficient micro-tipping contentâ. "It has an advantage Bitcoin or Ethereum doesnât necessarily have at this time: Dogecoin has low fees. And when you combine a strong community with low fees, thatâs a great recipe. I expect it to continue to grow, and that utility will get greater," said a BitPay spokesperson. The well-known crypto exchange Coinbase that itâs e-commerce platform âCoinbase Commerceâ has begun accepting Dogecoin for payments, allowing its merchants to start accepting the meme token.
Talking of e-commerce, it may be a little ambitious to believe the giant online retailer Amazon will take up Dogecoin for payment purposes, but that hasnât stopped a petition titled âDoge4Amazonâ from picking up strong support in 2021. Started three years ago with 20k supporters, in the last 6 months its jumped from 75k, to 100k, and now to close to 250K signatures. The petition reads: âAmazon.com, being a leader in innovation, should accept Dogecoin as a form of payment. Dogecoin is fast, cheap, and stable. It is stable in value, has the lowest transaction fee of other major coins, has a huge supply of coins, and has a very large, active community with ongoing development.â
At the other end of the e-commerce scale from Amazon, itâs reported that SamandZoey.com, a company that produces custom textile designs said they are accepting Dogecoin. âAccepting cryptocurrency, including Dogecoin, seemed like a natural next step for usâwe have a history of listening to what our customers want. Iâm surprised other eCommerce stores arenât doing the same,â a spokesman said. Dogecoin may dominate the meme coin landscape but thatâs also starting to change, as the demand continues to grow. In July it was reported that Baby Doge, in a bid to follow in Dogecoinâs footsteps, is also moving into e-commerce as a payment option. Itâs teamed up with Coin Payments, allowing the meme coin to be used with over 5 million e-commerce businesses worldwide.
For aficionados of meme coins, Dogecoin isnât the only popular crypto coin that was created in 2013, with a fun animal identity and with strong community backing. MONA was launched in 2013 as part of the MonaCoin Project and is based on the meme of a cat-like figure. It was designed by an anonymous developer who goes by Mr.Watanabe, who like Bitcoinâs anonymous Satoshi Nakamoto has never been officially identified. The meme token, which in March had a market value of around $134 million, is mainly used in Japan which may explain why itâs not more widely known. Its key practical use is as a currency in several stores (both online and on the high street), and according to Investopedia the currency can also be used through Monappy, âan online platform where MonaCoin holders can exchange coins for digital assets, such as coupons, electronics, and other itemsâ. While its success for use in payments was helped by Japanâs Financial Services Agency approval in 2017, the cat-like currency is still dwarfed by Dogecoin in terms of popularity.
Clearly, despite their fun-filled origins meme coins are here to stay and rising in global popularity. Led by Dogecoin, especially in the US, and with celebrity backing from Musk and Cuban, itâs not difficult to see the advantages of its payment-friendly features in terms of low fees and infinite supply. If a major retailer like Amazon jumps on the meme coin bandwagon, it will become a major payment option for consumers. Indeed, you can already see innovation within the mobile meme-coin-led consumer space with DogeCola, a token designed to keep the price stable and avoid Whale speculation, while also offering its own soft drink cola later this year.
Itâs also not hard to see meme coins use in related sectors such as music and gaming, as a cross-proprietary platform currency to enable the vision of the âmultiverseâ. In a recent report, UK-based blockchain VC Outlier Ventures sees the need to have a crypto decentralized core, with its own payment system as key: âThe defining characteristic of a true Metaverse is that it needs its own economy and currencies native to it, where value can be earnt, spent, lent, borrowed or invested interchangeably in both a physical or virtual sense and most importantly without the need for a government.â
Whether it will be used seriously for business-to-business payments, apart from one-offs like SpaceXâs use for promotional purposes, remains to be seen. After all, stablecoins such as Tether (USDT) and USD Coin (USDC) are also viable commercial options for digital payments that are fast and low cost and have been expanding rapidly in 2021. But one thingâs for sure about the meme coins, the skyâs the limit when it comes to future payment options for consumers keen to be able to use their favorite cryptocurrency.
âMemecoins could be another driver in the new metaverse. Who knows?â
- Anndy Lian, Chairman, BigONE Exchange & Author of Blockchain Revolution 2030
Also published here.