Why Elon Musk just tweeted about Dogecoin | finder.com
The price of Dogecoin has received a Boost by the CEO of Tesla. The parody coin had a huge pump after a series of tweets by Musk rising from $0.0397 to $0.0576 equating to a 68.92% price increase, retracing to around $0.05 at the time of writing.
The tweets which have propelled Dogecoin into the spotlight yet again are the latest in a string of endorsements by the billionaire car maker in favor of the cryptocurrency markets’ favorite joke coin.
But why Dogecoin?
Dogecoin was founded in 2013 by Silicon Valley software entrepreneurs Billy Markus of IBM software and Adobe software engineer Jackson Palmer. It’s blockchain technology is similar to that of Bitcoin. More precisely it’s a fork of the Litecoin blockchain.
Dogecoin differs from Bicoin in that its supply of coins is not fixed at a certain amount. In February of 2014 the Jackson Palmer notified the DogeCoin community that supply of the parody cryptocurrency would increase by 5 billion Doge each year.
While it is unclear what effect this has on the price of Dogecoin, the stated intent by Jackson is to keep the supply of Dogecoin “stable and maintain” the mining pools necessary for the altcoin’s survival.
The mining algorithm for Doge means that high-powered ASIC machines are needed to mine the altcoin making it more difficult to maintain a community of miners who keep the cryptocurrency viable.
https://twitter.com/elonmusk/status/1357236825589432322
Although Dogecoin holds the reputation as a joke coin according to its Wikipedia page the Dogecoin community is heavily invested in charitable endeavours. In 2014 a community fundraising initiative sprung up called Doge4Water. The fundraising effort raised money for clean drinking water through drought stricken regions in Kenya.
https://twitter.com/savethemhood/status/445007386323853312
In addition to that, the DogeCommunity held a fundraiser for the Jamaican bobsled team to compete at the 2014 Sochi Winter Olympic Games held in Russia. According to reporting by The Guardian at the time, as a result of the increased Bitcoin to Dogecoin transactions the price of Dogecoin increased by 50%.
Musk and the affinity with Dogecoin
The eclectic billionaire space adventurer made a cameo on the social app Clubhouse and commented on his fascination with Dogecoin: “Occasionally I make jokes about Dogecoin but they are just meant to be jokes,”
“[But] fate loves irony…
“The most entertaining outcome is often the most likely and arguably the most entertaining outcome, and most ironic outcome would be that Dogecoin becomes the currency of Earth in the future,” Musk quipped.
The only tweet of Musk’s recent salvo that seems to make any sense as to why he would publicly back Dogecoin is where he termed Dogecoin “ the people’s coin .” When added to that the meme of the rocket ship and the moon is a reference to the price of Dogecoin going to the moon.
With Dogecoin having survived eight years its chances of future viability are strong. In addition to that, Dogecoin is currently the 15th largest cryptocurrency by market capitalization and has a solid community of developers and miners. According to CoinGecko.com Dogecoin is up by 1,879% in the last 12 months.
With the increase in Dogecoin’s value, mining activities will continue into the future which could ensure continued support for the use of Dogecoin as money. With the price of DogeCoin being at $0.049 perhaps Musk sees that Dogecoin is still yet to take off.
Interested in cryptocurrency? Learn more about the basics with our beginner’s guide to Bitcoin, keep your crypto safe with a hardware wallet and dive deeper with our simple guide to DeFi.
Disclosure: The author owns a range of cryptocurrencies at the time of writing
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Originally published at https://www.finder.com on February 4, 2021.
