Linda Xie, cofounder at Scalar Capital, reads her essay on how the crypto community can successfully uses memes to help people understand the technology.
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Linda Xie: https://twitter.com/ljxie
Scalar Capital: https://scalar.capital/
You might have seen the Doge meme on social media. It’s an image of an adorable Shiba Inu dog with colorful Comic Sans font saying silly things like “such wow.” The photo of the Shiba Inu was initially posted in 2010 by its owner who was a Japanese kindergarten teacher. The image later took on a life of its own as it was shared widely across social media, gaining significant popularity in 2013 when the meme was spammed on a subreddit by 4chan users. In 2013, even members of Congress used the meme on Twitter and a cryptocurrency named Dogecoin featuring the Doge meme was launched. Dogecoin started off as a joke currency but managed to develop a strong online community and gained traction through people tipping each other online for providing good content. In 2014, the Dogecoin community raised $30,000 for the Jamaican Bobsled Team which had qualified for the Olympics but could not afford to attend. Even though the Dogecoin cryptocurrency started off as a joke, it currently has a $300 million market cap and $100 million of volume traded daily. The Doge meme represents how memes can shape reality.
Memes are ideas that spread through communities and represent a shared subculture or perception of reality. Memes shape everything around us from politics to religion to the very concept of a nation state. Fiat currencies are memes too, a reality made even clearer through the emergence of cryptocurrencies. While money isn’t the only use case for crypto and the memes within crypto have evolved over time, crypto being used as money is the longest and arguably one of the strongest running memes around. The 2008 Bitcoin whitepaper by Satoshi Nakamoto is titled “Bitcoin: A Peer-to-Peer Electronic Cash System” and there is even a prominent group of people within the Ethereum community frequently promoting the meme “Eth is money.” Memes are ultimately critical to crypto going mainstream — whether that’s as currencies, stores of value, or something else entirely. However, not every meme magically appeals to everyone. Rather, certain memes resonate with some cultures better. If crypto is to truly go mainstream, then the community needs to know how to make memes that will catch on. And that means tailoring them to the many different groups of non-crypto people who could benefit from this technology.
What are memes and their properties?
The term “meme” was coined by Richard Dawkins in his 1976 book The Selfish Gene. Dawkins compares a meme to a gene in biology that is able to replicate itself using people as hosts. Both memes and genes ultimately affect how humans evolve. You can also measure how prominent a meme is within society. For example, if the meme is a scientific idea and spreads among scientists, you can measure its survival value by counting the number of times it has been referenced in scientific journals. Memes themselves undergo natural selection as some memes die off and others become more prominent. There is natural competition among memes on which one survives. People have limited attention, capacity, and time to store information so the strongest memes that can get passed along quickly in a society and through generations will dominate. Dawkins summarizes this concept nicely with the line “We are built as gene machines and cultured as meme machines.”
The 1951 book The True Believer by Eric Hoffer, on the nature of mass movements, discusses the idea of “religiofication” which is the art of turning practical purposes into holy causes. In the most successful mass movements, people begin to remove their individual identities and view themselves as members of a specific group, becoming part of something greater. If people start viewing themselves as members that support a specific meme whether it be religion, governments, or organizations, then the attachment to the meme and its cause becomes even stronger. Interestingly, the discussion of certain topics within the crypto community such the Bitcoin block size and Bitcoin vs Ethereum have already turned into an almost religious debate. People label themselves as things like “big blocker” and “Bitcoiner” to demonstrate their beliefs. The book Get Together on community building discusses the notion that people share identity through words and use demonyms, a word used to describe someone from a certain place. Demonyms help people to identify themselves so it’s easier to spot others in the community. For example, Beyonce fans are known as Beyhive and Green Bay Packers fans are known as Cheeseheads. This creates a stronger bond between members.
A 2011 presentation titled “Tutorial: Military Memetics” by Dr. Robert Finkelstein discusses the military’s study of memes for national security purposes as the military acknowledges that memes can change people’s values and behavior as well as enhance subcultures. DARPA has supported research of memes with the goals of being able to identify how to make sure an idea spreads and what the consequences would be. This demonstrates how vast of an influence memes have on our society and that the crypto community would benefit from making memes that will catch on. Memes have varying levels of propagation and persistence. For example, a story could come across a few people for a few hours while a religion may spread among millions of people and persist for thousands of years. Studies show that smaller memes are more important because larger memes can be complex and difficult for people to remember. Finkelstein discusses a memetics fitness factor to create a method to evaluate the quality of memes including attributes such as number of people propagated to, persistence, and impact of the meme.
A report by CNA, a nonprofit research organization, called Exploring the Utility of Memes for U.S. Government Influence Campaigns states that memes with the most engagement are audience specific. Being more precise about which audience demographics you’re targeting will get more people to consume and also believe in that meme. The report discusses the importance of visual memes and how they are often able to transcend cultures and languages to reach broader communities. Various government campaigns have utilized visual memes due to their effectiveness. The report also states that it is helpful for memes to be reinforced with in-person engagement.
There is a significant amount of research involved in how governments can use memes to influence individuals and groups. We should use this type of research and do our own additional research to see how we can bring more awareness to crypto.
Popular memes within the crypto community
Gold is one of the most successful memes in history. Gold is an element used in the production of electronics and jewelry, but its use as a store of value has given it an almost $8 trillion market cap. Investors now put their money into gold to create a more diversified portfolio and countries store gold themselves or overseas. So it is not surprising that the “digital gold” meme for bitcoin has been successful with the investor crowd. Gold repatriation is the plan for governments to physically bring the gold they store overseas back home, which can be a complex process. For example, during 2013-2017, Germany brought back 54,000 gold bars worth $27 billion from New York and Paris. They had initially been storing gold overseas due to Cold War fears and wanted to bring it home. The process becomes even more complicated as these countries have to get insurance on the gold should something happen to it in transit. The “digital gold” meme is effective because transporting bitcoin across borders is significantly easier and cheaper than transporting gold. Bitcoin being referred to as “digital gold” might have sounded absurd to some in the beginning, but we are now at the point where even US Federal Reserve Chairman Jerome Powell recognizes this. Powell stated, “Almost no one uses bitcoin for payments, they use it more as an alternative to gold. It’s a speculative store of value.” Putting price volatility aside since we are still in the early days of bitcoin, theoretically it is a better store of value than gold itself because there is a known limited supply of 21 million bitcoin that will ever be created and it is far more portable than gold. Talking about digital gold to some institutional investors has helped them understand that concept better since many of them have gold or could easily understand holding gold in their portfolio.
While the “digital gold” meme works very well for some audiences, it does not resonate with everyone. We need to have grassroots efforts in local communities to create memes that will engage people of all different kinds of backgrounds. For example, when crypto people talk about how bitcoin is censorship resistant, many people in the US can’t understand why this is important. Some associate the need for censorship resistance with doing illegal activity, which in their minds is only a bad thing while others have no idea of what censorship resistance means. Residents of one country who believe its laws are just and reasonable may not immediately consider that illegal transactions by residents in an oppressive country could be completely appropriate if not good for that country’s residents.
Another popular meme among crypto people is “HODL,” which is used to positively reinforce the idea of holding cryptocurrency rather than selling it during volatile periods. “HODL” originated from a user’s misspelling of the word “hold” in a 2013 bitcointalk forum post. Memes like HODL make the crypto community stronger since they stick together during hard times. While having more of these kinds of memes is beneficial, it doesn’t necessarily bring more people into understanding or using crypto since non-crypto people have no idea what the meme means. We need to be working on memes that will bring people from outside of crypto into the community.
To get a better understanding of how memes in crypto vary globally, I wrote a post on Twitter asking for crypto people who live outside of the US to reach out to me. Then I asked them, “When you talk to people in your country about crypto, what aspects have you found resonate the most with them and what have you found doesn’t resonate well?” I quickly received over 100 responses across 50 countries which shows just how global crypto is. Note that these replies are individual opinions and by no means represent an entire country. Still, I found their perspectives to be helpful in understanding which narratives work well. Unsurprisingly, many people do not find the “digital gold” narrative appealing. People also have different views depending on demographics. For example, it seems that the younger generation who grew up with the internet are more interested in and open to cryptocurrencies.
Popular crypto memes outside of the crypto community
A common theme among people was that crypto has a negative connotation that can put off newcomers. Bitcoin still has a stigma due to transactions for illicit purposes such as drug purchases, despite a study from Elliptic finding that they account for less than 1% of bitcoin transactions to exchanges. Some memes really stick, and for bitcoin, its use as drug money on darknet markets is a persistent one. That means that it needs to be replaced with an even stronger meme in order to remove this mental hurdle. However, many early technologies, such as the internet and video streaming, have gone through this transition, from being associated with illicit activity to ultimately becoming a staple for society. The way that these technologies were able to overcome the initial association was having the emergence of prominent legal, mainstream use cases. We will hopefully go through the same transition with crypto.
Another common theme was that crypto is an investment opportunity. While this doesn’t sound ideal, since we want people to understand the technology first, I believe this meme actually isn’t so bad. The opportunity to earn money helps pull people in and spreads the meme. As some people are investing in crypto, they start to learn more about how it works, teach others about it, and possibly stick around out of interest. Some of the smartest people I know in crypto, who have stayed to build amazing things, initially got in because they first heard about crypto from their friends or the media following a huge run-up in price. Now I don’t expect everyone to stay because they care about the technology but I believe there is nothing wrong with this as a meme itself. This is not much different than people investing in stocks, gold, or real estate. On the flip side, there are people who take advantage of this mindset and prey on the get-rich-quick mentality by creating Ponzi Schemes guaranteeing returns or other scams so it’s important to call out this type of behavior and set reasonable expectations for people outside of crypto.
Another consistent theme was that a lot of people who are unfamiliar with the world of investing don’t really know what digital gold means. This was one of the least effective ways to get them excited about a new technology. Imagine someone who has never invested in gold or cared about gold being encouraged to learn about something that is its digital equivalent. Why should we expect them to be excited by this? Many sophisticated investors who consider gold to be a good store of value are also skeptical with deeming bitcoin as digital gold right now given the price volatility. I’ve heard that some investors often prefer to look at crypto as just an alternative asset class.
Many felt that the word “crypto” has a negative connotation but the word “blockchain” has a more positive sentiment as it is often cited as a promising innovation by governments and companies. For example, in China President Xi Jinping praised the benefits of blockchain. Many crypto people have actively stayed away from using the term “blockchain” as it has been frequently used by banks and enterprises as a buzzword to describe permissioned databases that lack the openness of public blockchains. “Blockchain not Bitcoin” is a meme that developed among traditional financial institutions and enterprises to demonstrate that they thought blockchain technology was interesting but that Bitcoin was irrelevant. Given these connotations, it could be worth adjusting terminology you use depending on who you speak with so they are open to learning more. For example, the terms blockchain, digital currency, and digital assets could be more appealing to certain crowds that are skeptical whenever they hear the word “crypto.” One response I found interesting was that young people were perfectly comfortable with crypto being labeled as “magic internet money,” which is a light-hearted meme that was initially created as an advertisement for joining the subreddit r/bitcoin. It contains an image of a messily drawn wizard in what appears to be Microsoft Paint along with the text “magic internet money.” This got people more excited about the technology and wanting to learn more. I had previously dismissed using this meme because it sounds like a silly, fun thing for tech enthusiasts but if you are trying to get that crowd interested in crypto then that phrasing can actually be helpful. I’ve also heard many people use the meme that crypto is the “internet of money” which seems to also have resonated with a tech savvy crowd. In the end, even if you have strong pre-existing opinions about a meme, it’s always important to think about the audience and what would appeal most to them.
Different country perspectives
There were interesting country-specific highlights from people I spoke with that I felt were worth summarizing. This does not include all responses I received and the goal is to show how responses varied by country. Again, please note that these were individual opinions from people interested in crypto so it is not a representative sample.
The censorship resistant aspect of cryptocurrencies resonates more with people who have had experience with high inflation, capital controls, or distrust of governments or institutions. I received by far the most responses from Argentinians. Argentina seems to have a perfect use case for crypto with the environment of high inflation, restrictions on accessing the dollar, and limits on sending money abroad. Censorship resistance resonates with some people because residents generally don’t trust banks to keep their money safe. I learned many people in Argentina are economically savvy since they have to be able to manage their savings so that it does not get eaten away by inflation. Argentinians care most about having easy access to something that is not the Peso and this usually means the US dollar. Since there is such a heavy focus on the dollar, I believe the best meme in Argentina could potentially be access to a stable digital currency. Stablecoins could be presented as another option for Argentinians to escape the Peso along with the dollar. I highly recommend Mariano Conti’s inspiring presentation at Devcon 5 on getting paid in the stablecoin Dai and how that has helped him survive Argentina’s inflation.
People living in countries where sending and receiving money across borders is difficult and expensive seemed to connect with the idea that cryptocurrencies are borderless and cheap to send. Multiple people in Nigeria and Rwanda shared that the use of crypto for remittances resonates well since it is currently inefficient to move funds across borders. Among tech professionals in India, there are a lot of IT service providers who have foreign clients and often have to pay high transaction fees so I heard that crypto has also made sense to that crowd.
The “digital gold” narrative might be better suited for countries that have a strong existing gold culture, such as in India, where people buy gold jewelry and pass it down in the family. However, it would take time for crypto to catch on there, because it is currently heavily associated with speculation and scams, and politicians and the media are further driving negative sentiment.
People living in countries where there is already a strong banking system resonate more with crypto bringing about financial innovation and creating a new asset class. The perspective from several Canadians was that people in their country do not relate to censorship resistance as it’s not necessarily accepted as a good thing. I consistently heard that Canadians have a high level of trust in banks so decentralization does not appeal to them. What seems to have drawn in some people is that crypto is an evolution of money and not necessarily trying to replace the entire financial system. Similarly in Switzerland, investors seem to understand crypto being an alternative asset class that adds diversification and leads to innovation in finance such as the tokenization of assets.
People who live in countries where residents care about privacy might find the privacy benefits of cryptocurrency appealing. Germans are very conscious about privacy, which I learned is partly why they are such a cash heavy country. Particularly in Berlin there is also a strong tech scene, which, when combined with the high value on privacy, could attract people to cryptocurrencies.
My suggestions to the crypto community
My goal is not to pinpoint exactly how a country’s residents are thinking about crypto or be comprehensive across all cultures but rather to demonstrate that memes are extremely important to the success of cryptocurrencies and we need to be creating new ones that stick. There have been many attempts to push the “digital gold” meme but it does not appear to resonate with a lot of people globally. It is important for people from diverse communities to help identify and share memes since they would best understand what would be most effective. It is not in our best interest to have a small group of prominent crypto individuals, who are typically tech savvy, to generate the memes that would resonate with people around the world. It is also worth experimenting with new narratives and formats for meme propagation. With that said, I can try to offer a few suggestions that are hopefully helpful to the crypto community in reaching a mainstream audience.
- Make your meme short and simple. It’s important to make it as easy as possible for someone to inherently want to share it with others, which creates the strongest chance of virality. We can determine its probability of success by testing this meme with people and seeing if they remember it afterwards. Ideally memes should be no longer than a few words and should be easily translatable into different languages.
- Tailor your meme to your audience. There shouldn’t be anything wrong with using the terms “blockchain” or “digital currency” if it helps make someone more open to learning about the technology. Then if the person ends up getting involved in crypto, we should educate on popular memes within the community like “HODL” to strengthen their bond. Giving a name to that group like “Bitcoiner” also helps strengthen that identity.
- Use a visual meme where possible. Visual memes can often transcend different cultures and languages and spread quickly. A joke currency like Dogecoin with the adorable Shibu Inu dog was able to have a $300 million market cap. Funny memes like these can be equally effective and we shouldn’t shy away from using silly memes like the “magic internet money” wizard to tech savvy crowds that might be attracted to it. We can measure a visual meme’s success by counting the number of times it appears in Google search or social media.
- Track which memes work well. The crypto community should openly collaborate on which memes and methods are effective and continue iterating from there. We should be tracking factors like the number of people the meme was shared with, how long it lasted, and its impact.
I’m optimistic that with this technology, community, and the right memes we can get crypto to become mainstream.
Thank you to Laura Shin, Will Warren, and Jordan Clifford for reviewing my post and to the many people from around the world who reached out to me on Twitter sharing their perspectives.