Tesla boss and multi-billionaire Elon Musk is also a lifelong crypto enthusiast, his current favorite cryptocurrency is Dogecoin, which he supports to the best of his abilities. It also gives its Tesla customers the option to pay by Dogecoin.
He also uses his investment in news service Twitter, in which he has a 9% stake, to promote Dogecoin. For example, he urges Twitter users to be able to pay the fees for the paid service Twitter Blue in Dogecoin.
Impact of the Musk-Twitter deal on the Dogecoin price.
Following the announcement of Elon Musk’s Twitter entry, Dogecoin experienced a price spike and rose over 30% in the past month. So much stronger than major competitors and top cryptocurrencies Bitcoin and Ethereum.
Bitcoin has only gained 8% in value over the past month, despite the highly anticipated Bitcoin conference in Miami. And Ethereum can’t match Dogecoin’s increase in value either. However, it is closer to DOGE than BTC with an incredible price increase of 20%.
Musk publicly proclaimed his “love” for Dogecoin in 2019, when he was voted CEO of the memecoin in a Twitter poll. Investments and associated public interest from Musk and other well-known investors have driven the price of Dogecoin from a fraction of a penny to an all-time high of over 70 cents.
Musk repeatedly calls on Dogecoin officials to dramatically improve the cryptocurrency. Transaction times should be shortened several times and fees should be reduced significantly.
Musk’s vision is to establish Dogecoin as “the” traditional crypto payment system, dethroning Bitcoin and Ethereum.
Musk’s public mind games, on the other hand, were counterproductive after Dogecoin was able to integrate with Ethereum in order to beat Bitcoin. After that, the price fell to a value of only 15 cents.
Who or what is Dogecoin actually?
The “dog currency” is actually a fun invention of American software engineers Jackson Palmer and Billy Marcus in 2013. At the time, Palmer chose the popular meme of a Shiba Inu dog as the cryptocurrency’s logo and this name misspelled “Doge”. ” instead of Dog.
Dogecoin was invented and started as a parody to make fun of Bitcoin. Followers and supporters of Dogecoin have tried to draw attention to it with spectacular and high-profile campaigns.
Like collecting donations to use the money to build a Japanese bobsled team and send it to the 2014 Winter Olympics in Sochi, Russia.
In early 2021, Dogecoin gained cult status after a group of Dogecoin supporters pledged via social media platform Reddit to take Dogecoin value to the moon. As a result, Dogecoin was able to increase its value by more than 5,000%. At least since then, Dogecoin is no longer a joke.
Incidentally, this was the same forum in which investors agreed in March 2021 to buy GameStop stock and thus support it. To thwart hedge funds betting on falling stock prices.
you are too much pic.twitter.com/DdmMxrGWgr
—Reddit (@Reddit) February 1, 2021
Similar to Bitcoin, Dogecoin is created by “miners” solving complex mathematical equations using powerful computers. And as a reward for digging, that is, for solving these tasks, the miners then receive Dogecoins, which they can freely dispose of.
Differences between Bitcoin and Dogecoin.
In principle, Bitcoin and Dogecoin are very similar, both running on blockchain technology with a proof-of-work consensus mechanism. Computing power is provided to solve mathematical tasks.
Only tasks with Dogecoin are much easier than with Bitcoin, so transactions via Dogecoin can be processed ten times faster. Another difference is that Dogecoin is not limited in number.
Determining and limiting the number of bitcoin coins is a guarantee of bitcoin’s value. The supply is limited and when there is a high demand for a limited good, the price of that good increases.
Dogecoin can pose an inflation risk if far too many new coins are mined and there are not enough interested parties for that large amount.
Musk and cryptocurrencies
As late as 2021, Musk had billions of dollars worth of bitcoins in his possession and also listed the bitcoin balances on Tesla’s balance sheet as an asset.
Musk had also given his Tesla customers the option to pay for their Tesla with bitcoins. In early 2022, Musk sold his bitcoins on the grounds that he could no longer sustain the immense amount of energy required to mine one bitcoin.
After parting ways with his bitcoins, Musk then revealed a similar exposure to Dogecoin. He bought extreme amounts of Dogecoins and now offers Tesla customers the option to pay with Dogecoins.
Conclusion on Musk’s Twitter deal and his crypto ambitions.
Musk is adept at handling cases and projects that are generally considered impossible. He had an electric car built and founded an electric car company at a time when everyone believed batteries were too heavy and power too low for a practical electric car.
He started a private rocket company that now flies for NASA and takes private space tourists into space.
And now Musk is investing in a cryptocurrency that, due to its unlimited nature, is considered worthless and far too volatile to be considered an investment. But when Elon Musk has set himself an idea, all the prophecies of doom from the experts only encourage him in his mission.
I would put Dogecoins in my wallet and watch Elon Musk’s next actions. If he sticks to the goal of banishing Bitcoin and Ethereum to insignificance along with “his” Dogecoin, then DOGE will definitely prove to be a profitable investment.