Why Elon Musk likes Dogecoin
The meme-cryptocurrency Dogecoin has gone a long way from a joke to a confident “middling” market player. What allows it to remain afloat and at the same time to stay Elon Musk’s “beloved” cryptocurrency?
What is Dogecoin
The Dogecoin was “coined” in 2013 thanks to American programmer Bill Marcus and Australian brand manager Jackson Palmer. The cryptocurrency logo — a smiling dog of the Siba Inu breed, has become an Internet meme.
Initially, Dogecoin was just a joke and was not considered an investment project. Its authors simply wanted to cheer the public by showing that thin line between serious things and things-just-for-fun. But the wave of hype picked up the coin, making it quite popular.
“The cryptocurrency is a successful hardfork of Litecoin network. The currency gained its main popularity due to its low exchange rate, low cost and fast transaction speed, which allows using it for microtransactions, where its use is most common. Miners, who find it easy to mine the coin, also add some popularity to the coin. However, there is also artificial inflation of around 5 % and there is no limit on the extra emissions” explains Dmitry Mazenko, LetKnow.News analyst.
Initially, the number of Dogecoins was planned to be limited to 100 billion units. But in the end, the management decided to make the release of coins unlimited.
What binds Elon Musk and Dogecoin
Last week, Dogecoin was in the spotlight of the whole world. And again — it all started with a joke. On April 1, on April Fools’ Day, the official Dogecoin Twitter channel decided to hold a vote where users were asked to choose a new CEO of the company. With a noticeable margin, Elon Musk won, gaining 54% of the vote.
The Dogecoin account summarised the voting results with: “It looks like you are now the CEO, Elon Musk. Write where you would your access codes to be sent”.
The businessman decided to support the joke for the joy of the whole crypto community.
“Dogecoin might be my favourite cryptocurrency. It’s pretty cool, ” Mask replied.
At the same time, in his Twitter profile, Elon Musk called himself “the former CEO of Dogecoin” and warned investors that “the cost of Dogecoin may fluctuate.”
Elon Musk and cryptocurrencies
This is not the first time that the head of SpaceX and Tesla Inc turns its attention to cryptocurrencies. A year ago, Elon Musk admitted that he has Bitcoins. To tell the truth, the amount was quite modest — 0.25 BTC. According to the businessman, they were once sent to him by a friend.
Since then, he has repeatedly mentioned digital coins. For example, in July last year, the businessman mentioned ETH for the first time ever. Then he complained about the sway of “cryptocurrency” scam bots.
“I would like to know who is behind the Ethereum scam bots” he wrote.
The cryptocurrency creator Vitalik Buterin’s response was immediate.
“I wish Elon Musk’s first tweet on Ethereum was about technology, not about scammers on Twitter,” he regretted.
A month later, one of the users of the social network recalled the story to the businessman, to which Elon Musk responded more optimistically.
“I want Ethereum, even if it’s a scam” he wrote then.
Most of the posts from a famous businessman are jokes of some extend. After Ethereum, he repeatedly made fun of Bitcoin. But in the end, Elon Musk still came to the conclusion that cryptocurrency is a good financial tool.
“They bypass currency control. And sending money using crypto is much more convenient than using pieces of paper. That’s for sure. There is no doubt about that.” he stated in one of his last posts.
Illogical world
But let’s get back to Dogecoin. There is no sense in looking for anything meaningful in a famous businessman’s quotes. The fact that Elon Musk mentioned this particular cryptocurrency does not mean that the coin is outstanding, says Artem Rybachuk from Porokh&Co company.
“There is not much logic in the world of cryptocurrency. I think Elon Musk chose Dogecoin as his favourite crypto coin not because it was better than others, but because it’s Musk and he could afford it. Now, none of the coins has much value. Everything depends on our faith in it” the expert claimes.
However not only cryptocurrencies depend on faith, but also their fiat counterparts. Therefore, if some coin becomes popular and there is a demand for it, it is too early to give up on it. Dogecoin proved that even a joke can be monetised and become beneficial, and such celebrities as Elon Musk would be talking about it.
Author: Yevgeny Komchuk
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