External Project Member
The concept of money has become somewhat philosophical in the current times. How can something that was worth cents 10 years ago, now have a value of over $50k USD? No, it is not a vintage LP, or a Picasso painting found in some old lady’s basement, it’s Bitcoin. And, unless you have been living under a rock for the past 5 years, you probably have heard of it. Bitcoin is the world’s largest cryptocurrency — a digital currency that is secured by cryptography, and distributed across a large number of computers —, and it can be used to buy goods in many online and physical stores. Bitcoin has not just been a trendsetter, it inspired an ever-growing legion of followers and spinoffs, becoming one of many cryptocurrencies that now exist out there.
2017: “Crypto Bubble”
Let’s go back to December 2017, the month that made individuals rich from night-to-day. At the end of 2017, Bitcoin had its first price spike after almost 8 years of its creation. What was worth cents, became worth $13k USD almost overnight. It brought hope to investors, and it created debate world-wide about the legitimacy of Bitcoin since it was (and still is) hard to forecast prices of this new currency. Countries debated on the uses of cryptocurrencies as a whole and the “threats” that they pose to actual money. This happened as money is “indivisible” in its physical form: if you cut a $100 dollar bill in half it does not become two $50 dollar bills, it becomes two useless pieces of paper. However, cryptocurrencies can be split almost indefinitely to accommodate their huge price.
This “infinite split” effect as some of my friends and I like to call it, was what caused a craze just a few weeks later when the price plummeted from $13k to just below $5k. Some people decided to follow the rise of crypto, but as soon as the price crashed, all these companies stepped out. Some did not even return the investments made and simply left many people bankrupt, some people had invested everything they had into these companies and now they had nothing. The most famous case of this happening was with the Bitconnect Coin, which became a meme even before the crash.
A new coin that has been launched but is not yet being traded, meaning it holds no real value is Pi Network, apparently founded by Stanford and Harvard Alumni. and that can be mined using your smartphone. Mining has become very popular in the past years and works by rewarding the device that completes the transaction first. Well, it turns out that this new coin rewards imaginary money to users that bring in more users and allow an app to have access to your phone: just fancy Multi-level Marketing or a Pyramid Scheme?
2020/2021: Elon Musk and r/WallStreetBetts
Probably the biggest rise we have ever seen in stocks and crypto came from these two names: Elon Musk, CEO of Tesla and SpaceX (aka real-life Tony Stark), and r/WallStreetBets, a sub-reddit full of memes and trading “tips”. It turns out that the best technique for increasing the value of a stock or a currency is not by actually buying the company itself, but by persuading teenagers and people with way too much “f-you money” to buy stocks or flood short positions thus creating a massive spike in prices on the short-run. Mainstream media that cover trading news like Bloomberg or CNBC had no idea of what was going on, which is no surprise as many of them are run by hedge funds managers or are largely funded by hedge funds. For the first time in the history of Wall Street, stock prices were not being controlled by the Machine, instead the market was actually being controlled by the people and internet memes.
The most recent spike in the price of the infamous Dogecoin — a cryptocurrency invented by software engineers which features the face of the Shiba Inu dog from the “Doge” meme as its logo and namesake —, happened at the beginning of February of 2021, when Elon Musk sent its price up by 75% just by tweeting “Dogecoin is the people’s crypto.” Now, it is clear that he is not advertising or getting paid to do so, but he might have some Doge in his crypto wallet, meaning that there was some strategy in his words, and he was not being what the internet calls a “memer.” Many people believe that his actions were innocent and that Dogecoin is just a joke Crypto, but it continues to be traded and people still profit from it.
Marketing an invisible product
The basis of Marketing Cryptocurrencies on how to create a trustworthy product, just like any product, is that a customer needs to believe in what they are buying. When a customer is buying a tangible good, they have an expectation to be fulfilled on what it feels like, how it smells, and how it pleases any other senses the product may evoke. The difficulties are even greater when you buy a product online since the client cannot see the product “with their own eyes”, and the seller needs to ensure that the product will still hold up to their expectations.
When you try to sell stocks or Crypto, for example, the customer will never “see” the product but expects positive returns from the purchase. The two methods that will sell Crypto are: word of mouth and heavy Social Media campaigns. If you can create a product that sells itself and is able to make the customer value it more than the actual price then you are set – good job! But be careful because if your product is too good, it may sell exponentially and in a way that some even might accuse you of fraud. If your currency can generate profits by word-of-mouth, just like DogeCoin has been doing since the end of 2020, and attract even more customers that invest millions of dollars, then you can pretty much forget your Marketing budget!
However, it is important to bear in mind that DogeCoin and Bitcoin were not created a few months ago and did not attract millions of users over night. It took years, and all the campaigns done were directed towards people that were in the tech industry or knew about the insurgence of Crypto. But, as Isaac Newton once stood on the “shoulder of Giants” to make his grand discoveries, we now sit in the shoulder of major Crypto giants that took the leap and risked their life’s earnings by creating the trust we now have in this virtual money system.