The next entry in our series of ICO case studies is Dogecoin, the cryptocurrency that didn’t take itself seriously enough.
What is Dogecoin?
Sometimes jokes get out of hand: for example, it might be very normal to start calling your best friend by a silly, unflattering nickname, but it is decidedly less so to tattoo it on their forehead.
But the worst jokes are the ones that get so out of hand that people start taking them seriously. This, more or less, is what happened with Dogecoin – described (accurately) by its founder in early 2018 as ‘a cryptocurrency with a dog on it which hasn’t released a software update in two years’.
And yet, that description sort of makes sense. In a market where every other coin is described as ‘revolutionary’, a cryptocurrency that doesn’t take itself seriously has obvious appeal. It certainly helps that Dogecoin investors had a distinctly charitable bent: in 2014, they raised enough money to send the Jamaican bobsled team to the Winter Olympics – and though that may have been a mischievous stunt inspired by Cool Runnings, they’ve also helped drill wells in Kenya, amongst other things.
These good deeds attracted publicity, and they attracted new investors. Eventually, Ryan Kennedy founded a Dogecoin exchange: Moolah – which received the full backing of the community.
Why did Dogecoin’s ICO fail?
There are several competing theories, but perhaps the most popular is that it’s a joke cryptocurrency with a dog on it that made itself particularly vulnerable to scammers. Ryan Kennedy was very much not on the level. He shut down the exchange, disappeared with the funds, and essentially destroyed a fun-loving, warm-hearted community – and, like Josh Garza before him, now faces fraud charges.
A donation fundraiser covered the stolen coin, but the damage was already done: to Dogecoin, and to the wider community – which, in the wake of another cyberattack, must once again fend off the idea that cryptocurrency is an inherently risky proposition.