Memes have received a lot of attention in recent times with the rise of internet culture. While sharing images, inside jokes, cultural allusions, and catchphrases have long been a part of human history, creating an economy to trade memes as capital assets like stocks and shares reflects remarkable ingenuity.
Despite pandemic woes, this market is flourishing with r/MemeEconomy (an online community on the American social media platform Reddit), boasting over 1.4 million active followers. There are top investors and traders, who speculate on the viral potential of a meme. There are in-depth guides on meme trader performance to help usher in first-time investors and dedicated magazines offering investment advice.
However, in the absence of any real monetary exchange, this market had little to offer until now other than as a gimmick. The coming of non-fungible tokens (NFTs) has changed that for good. While memes and viral videos are ubiquitous and earn their cache by being widely consumed, NFTs have made it possible to own the rights to a meme, creating authenticity, scarcity, and value. This economy is now a reality, with the internet’s most iconic creators auctioning off their memes and viral videos for hundreds of thousands of dollars.
But is the meme economy a real thing or a bubble that can burst at any moment?
Of Memes and Mimetic Desires
To understand how this market works and gauge meme trader performance, we need to figure out how stocks work. One may ask, what creates value for a stock? How does one speculate about the value of a stock? At the heart of this economy lies the story of human desire and scarcity.
French philosopher René Girard once said that human desire is not an autonomous process, but a collective one. We want things because other people want them; this leads to scarcity that drives up the value of a thing.
Gerard’s mimetic theory of desire is perfect for understanding how the meme market works. Just like in a real stock market, where investors speculate on the business potential and profitability of a company, meme investors speculate on the "meme-ability," or the viral potential of a meme. The higher the viral potential of a meme, the greater are its chances of acquiring value.
While there may be thousands of images of a particular meme floating in the virtual space, there is only a single NFT attached to the original version of a particular meme. In this way, the widespread circulation of a meme can coexist with the scarcity of ownership.
In the case of meme stocks, value is driven through word-of-mouth publicity. The popularity of GameStop Corp. and Dogecoin shows how memes can move the meme economy.
GameStop, for example, was going through a rough patch in the mid-2010s, when consumer interest had shifted from online sales of video games to internet shopping. In January 2021, however, the prices of the stocks of the company skyrocketed due to a “short squeeze” (an artificial increase in stock prices due to short supply rather than market fundamentals) orchestrated by the members of an online community on Reddit that prompted a halt in trading and an eventual fall in prices.
Similarly, Dogecoin, which was originally created by Billy Marcus and Jackson Palmer as a joke on the existing cryptocurrencies, has outlasted most of its counterparts and spawned a thriving community of online investors, thanks to a surge in viral popularity and online discussions on social media platforms like Reddit and Twitter.
How NFT Memes have taken over the Meme Economy
NFTs are digital tokens stored on a blockchain that guarantees a certificate of authenticity. Much like rare collectibles, NFTs create scarcity, and therefore, push up the value of the digital asset to which the token is attached.
From early 2021, wealthy meme traders across the world have started collecting slices of early internet history from which most memes subsequently sprang. Some of the memorable memes and viral videos in this list includes Charlie Bit My Finger (a viral meme showing a kid getting bitten by his baby brother), the Disaster Girl (a picture of a girl named Zoe who accidentally became a meme when she stood in front of a building being burnt as a part of a mock fire drill), and Overly Attached Girlfriend (a viral video of a girl making a creepy face).
With the massive popularity of NFTs and the improvement of meme trader performance, creators and the subjects of memes are finally getting their due. This economy has been transformative for some meme subjects and creators at a personal level. For instance, Zoe Roth, the subject of the Disaster Girl viral meme, was able to pay off her student loans from the proceeds of the auction of her meme and donate the rest to charity. In an interview, she described the process as liberating, enabling her “to take control of a situation that she felt powerless over since she was in elementary school.” And, meme traders can claim a certain percentage of the sales each time a meme is sold — one of the advantages of smart contracts and NFTs for all creators.
The Future of Meme Economy
While questions of ownership and the technology behind NFTs remain, there is little doubt that the meme economy is here to stay and that meme trader performance is only going to get better in the coming days. As the online space for meme transactions becomes more democratic, it will see more and more people joining the ranks. It is possible for ordinary people to participate in this market and perhaps turn the buying and selling of memes into a full-time profession, much like stockbrokers. Several young artists are creatively using the idiom of meme in their artwork as well. Indian artist Sultana Zana has recently used the language of meme to draw attention towards the pressing issue of environmental degradation.
Finally, with the help of NFTs, issues of online fraud and counterfeiting can be also resolved. This too will positively impact the existing rules of intellectual property rights and give meme creators their due.