Feb 11, 2021 - Economy

Memes as economic stimulus

Illustration of cryptocurrency and dollar bills

Illustration: Sarah Grillo/Axios

The current stratospheric levels of cryptocurrencies in general, and Dogecoin in particular, can make it a lot easier to spend money.

Driving the news: Another part of the thinking behind the Tesla cryptocurrency announcement is that for someone sitting on a lot of bitcoin, it's psychologically easier to transfer a single bitcoin to Tesla than it would be to try to write a check for $40,000.

  • An economist would say that transferring the bitcoin is exactly the same as selling the bitcoin and spending the proceeds. Which goes to show the limitations of economics.

For instance: Vitalik Buterin, one of the founders of Ethereum, announced this month that he had transferred exactly $4,280,784.20 of his crypto assets to GiveDirectly, the nonprofit that gives cash payments to the neediest people in the world.

  • "They take crypto," he wrote — a decision on the charity's part that clearly paid off handsomely. Buterin then added cheekily: "They don't yet take DOGE directly but maybe that can change."

GiveDirectly didn't need to be asked twice — they immediately set up a wallet for Dogecoin donations.

  • The result: Elon Musk donated 150,000 Dogecoin, worth just over $11,000. His tweet helped precipitate a rash of other Dogecoin donations, too.

The bottom line: Crypto can feel divorced from reality, in an easy-come-easy-go kind of way. Weirdly, that can make them an excellent fundraising vehicle.

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