Even in the cryptocurrency world, where a token could fall 50% in a day or 10 times in a week, Dogecoin remains an enduring mystery.

After all, why does a joke currency surge and crash with such ferocity? How did Dogecoin catch and retain the attention of the world’s richest man and Twitter memelord?

Theories abound, per Joe Weisenthal of Bloomberg: some say it's the purest distillation of cryptocurrency speculation. Others claim it’s evidence that crypto really is nothing but a gigantic bubble, or that it’s really a failed cryptocurrency that's been abandoned by developers but hijacked by corporate interests and stonk pumpers. 

All the above are true, some more than others. It's certainly one of the most universally annoying topics that one can raise in crypto conversations, as Weisenthal points out. 

But I want to posit that Dogecoin is what you get when you invent digital scarcity and immutability. Cryptocurrencies gave us not only digital objects, but it also made those digital objects permanent. 

A blockchain is a little like a space-faring rocket. Once it’s launched beyond orbit, it better have a plan for jet fuel. If it runs out, it could end up floating listlessly in the void, like the 128 million pieces of space junk that drift around the Earth. These permanent pieces of crypto-monetary junk littering the internet are like Dogecoin, which has survived all these years and has become a vessel for the animal spirits of the day. 

You might ask how the death of a cryptocurrency could be defined. I found one paper that looked at this empirically. It’s a study of thousands of coins and how long each one remains listed on an exchange. By this definition, a cryptocurrency is dead when it ceases to attract liquidity. 

The paper, Cryptocurrency Survival Analysis from the Winter 2020 issue of the Journal of Alternative Investments, covered 2,500 coins. It found that the vast majority of coins (70%) get delisted within the first year of their existence. The survival rate in the following years isn’t great, either: The odds of delisting are 27% in the second year, 19% in the third and, mercifully, 12% in the fourth year. If a coin makes it to its fifth year on an exchange, the odds are about 9% that it gets delisted in that year. 

So, based on those survival metrics, we might say that crypto coins are easy come, easy go. It’s relatively simple to clone a coin by forking — that’s what Dogecoin did with Bitcoin — but it’s much more difficult to sustain it as a going concern for more than a few years. 

Once listed, the project needs to retain the attention of a bunch of disparate actors: traders who see more upside on the horizon, developers who imagine taking the platform to greater heights, and a community that derives meaning and fellowship from proximity to the coin and its holders. 

But being delisted is not exactly the same thing as being dead. Coins, in theory, don’t need to be listed anywhere to be traded, thanks to the magic of automated market-makers, which function as decentralized exchanges. All they need is someone willing to post a few drops of liquidity, and then trading can commence. 

The journalist David Z. Morris has an instructive view on digital permanence. In his book, Bitcoin is Magic, he invokes the theorist Harold Innis’ notions of “space binding” and “time binding” media to explain how blockchains manifest digital permanence. 

So in Innis’ telling, the pyramids are an example of time-binding media because their durability means they effectively project a message into the future. A piece of parchment or the telegraph, by contrast, is space-binding because they collapse distances between two points of communication. 

Morris argues that the special thing about blockchains is that they eliminate the trade-off inherent in networked media like the internet by being both space and time-binding. Public blockchains can be read anywhere, thus collapsing distance, but they are also durable, thanks to the significant costs and computational power required to write them into existence in the first place. A blockchain is “like a pyramid, but a digital one, visible from anywhere on the Internet,” Morris writes. 

Of course, a grand monument like a pyramid is one thing: a king decided to devote vast resources to its uniquely beautiful design and construction. But what if pyramids could be copied and pasted from their blueprints? Then you have hundreds, maybe thousands, of pyramids, all with slightly different bricks or capstones. This is the territory Dogecoin entered when it was forked into existence, precisely to mock the grandness of permanent digital ledgers. 

There is also some reason to doubt that blockchains are quite as permanent as Morris claims. The cryptographer and ZCash founder Zooko Wilcox has pointed out that it’s quite difficult to get complete copies of some blockchains. Some chains have missing blocks; other decommissioned testnets have been lost to time. “It’s interesting how ephemeral blockchains are,” Zooko tweeted. “How many of today’s blockchains will be findable by programmers or archaeologists a few decades from now?”

So what explains the Dogecoin phenomenon? It’s the discovery of not only time and space-binding media, but also the surprising requirement that these media be easily replicable. Then, the vagaries of liquidity determine whether it surges or crashes, and whether it can be inhabited by corporate branding campaigns or the whims of a tech tycoon. Wow. So scare. 

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