SYLVIE DOUGLIS, BYLINE: NPR.
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STACEY VANEK SMITH, HOST:
Hey, everyone. Cardiff and Stacey here. This is THE INDICATOR FROM PLANET MONEY. And, Cardiff, it is time for us to check in with our old frenemy (ph), cryptocurrency.
CARDIFF GARCIA, HOST:
VANEK SMITH: (Laughter) It's having a moment.
GARCIA: Most definitely it's having a moment. And a lot of it is because of everybody's favorite crypto booster, Elon Musk.
VANEK SMITH: Elon Musk, yes. So his car company, Tesla, will reportedly start accepting Bitcoin as payment. And the company has apparently bought $1.5 billion worth of Bitcoin, which is just a lot of money. And it helped boost Bitcoin's value up to a record - nearly $50,000 per Bitcoin. It's crazy.
GARCIA: Yeah, though he also just did not stop there. He also gave a huge boost to a cryptocurrency known as Dogecoin.
VANEK SMITH: Yeah. And Elon took to Twitter, and he fired off a couple of Dogecoin jokes, little memes, including - there was a picture of Dogue (ph) magazine like Vogue magazine but for Dogecoin.
GARCIA: Yeah. And then Snoop, the rapper, also started tweeting about Dogecoin - and Gene Simmons of Kiss as well. And before you knew it, Dogecoin's market value was up past $10 billion.
VANEK SMITH: What a world we live in, Cardiff Garcia. What a world. Yes. And, you know, Cardiff, as we were sitting around kind of watching all of this unfold, we kept thinking back to this conversation that we'd had with Jackson Palmer, one of the creators of Dogecoin, back in 2018.
GARCIA: Yeah. Back then, Jackson told us all about the kind of strange origin story of this cryptocurrency, Dogecoin, and why he himself does not actually own any of it.
VANEK SMITH: Yeah, there were some mixed feelings that he has about Dogecoin. That conversation with some updates after the break.
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JACKSON PALMER: So my name is Jackson Palmer. I'm based out of San Francisco, Calif., and I'm a product manager. And back in 2013, I created Dogecoin.
GARCIA: Dogecoin - that's D-O-G-E coin.
PALMER: There was a gold rush back then in cryptocurrency, and I'd been monitoring that to a certain degree. And I knew it was getting a little bit bubbly when people at work were talking about it. And so I went and investigated, and I noticed there was a lot more of what are called altcoins or alternative coins coming on the market, you know, whatever coin, like Litecoin, Feathercoin. A bunch of this was on the market.
VANEK SMITH: Like Bitcoin copycats kind of.
PALMER: Bitcoin copycats - they take it. They change a variable, and then they, you know, release it to the world. And so what I noticed was that the prices were inflating, and people were making a lot of money out of it. And I was like, this seems a little shady.
GARCIA: Also happening back in 2013 - this Internet meme called doge.
VANEK SMITH: Yeah. It was a picture of a dog, a shiba inu, and it had this goofy comic sans writing all around it with phrases like, much amaze, and, so good.
GARCIA: Grammatically challenged phrases, I think.
VANEK SMITH: Grammatically challenged phrases, yeah.
GARCIA: And then one day, it all came together.
PALMER: I had come home for the day and in an Australian kind of tradition, you know, cracked open a beer. And I was just sitting around. And the way it kind of came together was that I had one browser tab open with this article about doge. And right next to it, I had CoinMarketCap, which is a very popular website for checking the valuations of cryptocurrencies, so my tab names kind of almost spelt it out for me in a way. And I just thought, Dogecoin; that's hilarious. And so just as a joke, I tweeted, I think, in late November 2013 that I was going to invest in Dogecoin because I thought it would be the next big thing. And this was completely a joke.
GARCIA: Then he started hearing from all these people who were like, Dogecoin; actually, great idea.
VANEK SMITH: And a friend of his in the tech industry is like, what the hell? Let's make Dogecoin a real thing. It's easy to make a new cryptocurrency, and it'll be like a fun project to understand how this stuff really works.
GARCIA: And so they create Dogecoin.
VANEK SMITH: OK, you have a joke that is turning into a thing. Did you buy Doges? I mean, I'm not...
VANEK SMITH: No, you didn't.
PALMER: No, no. So, yeah, again, you know, when you make a joke, you don't - you know, your second thought isn't, how do I monetize this joke, right?
GARCIA: His co-founder gave him, like, a couple of hundred bucks' worth, but he doesn't think anything of it. And then the price of Dogecoin starts to take off.
VANEK SMITH: So Jackson and his partner decide, OK, if Dogecoin is going to be a thing in the world, let's make it something we can be proud of; not a place where people go to get rich but a place where people go to learn about cryptocurrency and maybe do some good. On the Dogecoin subreddit, they started suggesting giving Dogecoins to charity. And then someone was like, hey, I heard the Jamaican bobsled team is trying to raise money to go to the Winter Olympics.
PALMER: We thought, well, that's just as ridiculous as a dog on a coin. So sure, why not? And...
VANEK SMITH: That is why you decided to help them...
PALMER: Yeah. Yeah, so we posted...
VANEK SMITH: ...Because it just seemed, like, so preposterous?
PALMER: Exactly, so we posted a Dogecoin address. And, you know, my friend and I in Australia, we were sitting around. We were like, this is never going to work. This is preposterous. But we were out late that night at, like, a pub somewhere, and our phones started buzzing. And it was like, in 24 hours, we'd raised, like, $30,000 to send the Jamaican bobsled team to the Winter Olympics.
GARCIA: They donated Dogecoin to train guide dogs, to drill wells in Kenya. Things were going great until they weren't.
PALMER: Whenever you have something that's going really successful or you have a successful community like that and there's a monetary element to it, and it's like blood in the water, right? Like, sharks can, like, smell it from miles away.
VANEK SMITH: In 2014, someone on the Dogecoin subreddit convinced a lot of people to invest a lot of Dogecoin in a new cryptocurrency business. The business was really shady. It collapsed, and people lost their money.
PALMER: And that kind of just - you know, it really ended the party - right? - because it was like this thing that was - you know, it had a dog on it. How could that, you know, ever be, you know, kind of associated with people losing all that amount of money? By the end of 2014, I was kind of - I backed out. And by 2015, I was completely out of Dogecoin.
VANEK SMITH: You don't have a doge - not one?
PALMER: No, so I'd given all those - like, the 5 million Dogecoin I had, which wasn't worth a lot, I gave that to all those charity things that we were running. So it was pretty much all done through that, and I didn't have any for myself.
VANEK SMITH: You're Dogeless (ph) right now.
PALMER: I am Dogeless, yes. That's correct.
VANEK SMITH: And that is a little rough because right now, post-Elon tweets, those Dogecoin would be worth about $350,000. But Jackson has been kind of watching all of this drama unfold from a distance.
GARCIA: So, Jackson, there's a tremendous irony here that I'm sure is not lost on you, which is that you were a critic of all these other kinds of cryptocurrencies that were being formed and that were attracting all these buyers. And then on a lark, you would go on to found a cryptocurrency whose very success would reflect the same trend that you were so deeply skeptical of.
PALMER: Yeah, tell me about it, right? The irony is definitely not lost on me. You know, I feel guilty enough for creating Dogecoin, which I'm sure that people have at some - you know, I know that people have lost money on in the past, and that pains me.
VANEK SMITH: Do you wish you hadn't created it?
PALMER: I - that's - I think I wouldn't change creating it. I think in a way, Dogecoin acts, for many people - you know, I've had several people that have come up to me and said, look; Dogecoin was the first thing that got me into cryptocurrency. And because of it, I have a reality check on the whole space, and that makes me feel good because they came in. They understood how it worked, and then it gave them the context that if this thing with a dog on it can, like, pump in price by 10X (ph) one day, they're like, yeah, this whole thing is crazy, right?
GARCIA: And it really is crazy. Cryptocurrency is just notoriously volatile. To give just one example, back in 2018, Bitcoin lost half of its value in just a few weeks.
VANEK SMITH: Yeah.
GARCIA: And there was also a time when THE INDICATOR actually bought some cryptocurrency, Ethereum...
VANEK SMITH: (Laughter).
GARCIA: ...A few years ago. And let's just say it didn't end well.
VANEK SMITH: It didn't end well.
GARCIA: The less said about it, the better.
VANEK SMITH: Yeah.
GARCIA: But we'll link to that adventure on our website if you want to go back and relive those terrible memories.
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GARCIA: Our money's gone. It's gone.
VANEK SMITH: It's not gone. It's - holy... Well, maybe the...
VANEK SMITH: Wow.
GARCIA: That's astonishing. All right.
VANEK SMITH: It's brutal in the block chain.
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VANEK SMITH: This episode of THE INDICATOR was originally produced by Darius Rafieyan. The update was produced by Jamila Huxtable and fact-checked by Sam Cai. THE INDICATOR is edited by Paddy Hirsch and is a production of NPR.
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