Dogecoin, Elon Musk and the ‘joke’ cryptocurrency showing the power of memes

The price of Dogecoin is soaring again after the cryptocurrency received another series of apparent endorsements by the world's richest man, Elon Musk.

The future-moulding entrepreneur appears to have thrown his weight behind the coin – started as a joke born of the internet culture in which the infant crypto market has developed.

Musk's seemingly light-hearted Twitter posts – one of which consists of a meme portraying him as Rafiki from the Lion King standing on Pride Rock and raising a Doge-headed Simba in his arms – might just be for fun but, as he suggests – that's kind of the point, and is part of what makes recent events so intriguing.

For those still wondering what exactly Dogecoin is, it is essentially a joke cryptocurrency – seemingly of little inherent value.

Created as a response to Bitcoin, to which it is vastly similar, Dogecoin takes its name and image from the popular 2013 meme based on a Shiba Inu dog.

Its value topped 50 cents for the first time in January, and most cryptocurrency investors only buy a few Dogecoins, viewing it as something of a novelty coin and a fun nod to internet culture – rather than as a serious investment likely to bring any real returns.

But as Musk has previously said: "The most entertaining outcome is the most likely."

During an appearance on the Clubhouse app on Sunday, he said that while his comments on Dogecoin "are really just meant to be jokes ... fate loves irony", adding: “The most entertaining outcome and the most ironic outcome would be that Dogecoin becomes the currency of Earth in the future.”

While also a joke, this seems to be a fairly on-the-pulse observation of the appreciation for the importance of humour within the crypto market and culture that surrounds it.

As noted by economics professor Jason Potts and blockchain researcher Chris Berg in The Conversation, this sense of fun is a defining characteristic of a movement currently threatening to upend some long-standing tenets of the mainstream markets.

In the past month, Wall Street has been shaken by the emergence of a powerful undercurrent which has long bubbled beneath the surface – as communities of individual investors, self-organised on internet forums, used their collective power and combined wealth to punish Wall Street investors short-selling stocks of the ailing video game retailer, GameStop.

The historic episode brought this previously underground world of investment crashing into mainstream discourse for the first time – beyond the brief spikes of attention corresponding with each new Bitcoin high or low.

And as the potential power of this underground world quickly became evident, with corporate firms losing billions of dollars, so did the value of the Reddit memes and culture popular with those who frequent it.

While the power of memes has long been evident, Dogecoin – which is defined by the fact it is a meme – has in some ways given us the first tangible evidence of the financial value of memes and their power to move markets.

Dogecoin differs little from Bitcoin

There is little in the way of technological prowess to discern Dogecoin from Bitcoin or Litecoin, upon which it was based.

Speaking to CNet, co-founder Billy Markus reportedly described merely changing a few core elements of source code, such as changing "mine" to "dig" – to make it more dog-like.

"From 'that seems like it's funny' to actually doing it, took about three hours," he said of creating Dogecoin. "It's almost trivial to create a new cryptocurrency."

Surprisingly, the alt coin's popularity quickly grew, becoming a fun way for crypto investors to send each other a cheap digital "hello". An effort to raise 26 million Dogecoins on Reddit to help Jamaica's bobsleigh team reach the Winter Olympics also helped cement the coin's reputation as being a jovial force for good.

So why is Dogecoin enjoying its current success?

So in traditional terms, its success remains a source of confusion.

"It is a puzzle to me why Dogecoin is so highly valued," Adrian Lee, a senior finance lecturer at the University of Technology in Sydney, told CNet.

But in some ways, that is the point.

Dogecoin's success lies its fans' willingness to engage in something for the sheer joy of it – which some have suggested makes the enterprise close to a piece of performance art.

While its price could easily come crashing down tomorrow, in an online world in which humour and memes have long been considered a currency, all bets are off.

More: The GameStop saga shows taking down capitalism is possible – or at least messing it up for a while is