Musk frantically hints at Dogecoin, which seems to be an unreliable scam What is the intention?

What is Musk’s intentions in repeatedly intentionally or unintentionally setting off Dogecoin waves?

Yesterday (November 1) Musk tweeted another photo of Shiba Inu wearing a Twitter t-shirt, incidentally driving the latest increase in the price of Dogecoin. His actions also evoke memories of how the billionaire’s past posts sparked a Dogecoin frenzy.

What is Musk’s intentions in repeatedly intentionally or unintentionally setting off Dogecoin waves? Some say it’s just a joke, some say it’s a scam with high risk… Today the vernacular blockchain will take you to take a look.

It started with a joke

Dogecoin was born as a joke in late 2013, when two engineers, Jackson Palmer and Billy Markus, changed Bitcoin’s code to create DogeCoin. Its original intention was just a spoof, which unexpectedly caused a huge response from netizens and quickly became the birth of Dogecoin.
The original inspiration came from a Shiba Inu, whose real name is Kabosu, from Japan, owned by kindergarten teacher Sato, who often shares Kabosu’s daily life online, on February 13, 2010, “What do you have for dinner today?” In the article, Sato shared photos of Kabosu’s life, one of which is Kabosu’s hands folded, smiling triumphantly, and his expression is too human, it is the expression on this photo that hits Jackson Palmer.

Jackson Palmer, who was Adobe employee at the time, wanted to satirize the phenomenon of cryptocurrency flooding at that time, so he added crypto-asset elements to this Doge meme to create a cryptocurrency map with Doge’s avatar. Jackson posted the image on Twitter and wrote: “Invest in Dogecoin! It’s going to be the next big thing.” This post was echoed by netizens in the Meme industry and the industry at the same time. At the instigation of netizens, he bought dogecoin.com domain and asked Twitter for partners who wanted to develop Dogecoin together:

“Investing in Dogecoin, pretty sure it’s the next big thing.”

The tweet quickly reached the eyes of IBM engineer Billy Markus, who has been researching cryptocurrencies and has always wanted to create a cryptocurrency that people can use widely rather than simply for investment.
Billy contacted Jackson, and although Jackson didn’t respond right away, Billy set about building Dogecoin, copying the Bitcoin source code verbatim, most of which he didn’t understand, but with some simple modifications:

1) Change the word for Bitcoin to Doge and mine to dig

2) Change the value of 23 million to 100 billion, and greatly reduce the difficulty of digging holes

3) Change the font to a lively and funny anime font (comic sans)

Rumor has it that the whole process took about 3 hours, and Billy and Jackson made Dogecoin officially live during a lunch break. Suffice it to say that Jackson created the official portal Dogecoin.com Dogecoin, and then Billy developed the first 4 versions of Dogecoin on his own.
Two weeks after Dogecoin’s birth, its daily trading volume surpassed Bitcoin. Less than a month after its birth, the website has been visited by more than 1 million people! Later, in Taiwan, it became popular again with a “I always recommend breaking up on the issue of feelings”.

In 2014, Billy and Jackson quit the development of Dogecoin for unknown reasons, and speculated that Dogecoin was still worthless at the time, because even the founder himself said in an interview, “We think this is a big joke doomed to die”, as if they didn’t have some left in their hands.
Later, a new Dogecoin core development team was formed, consisting of a team of core maintainers supported by more than 40 contributors over the years, who have been developing and maintaining Dogecoin ever since.

However, compared to the “value investment” investors in the circle of bitcoin, Dogecoin is a bit of a slap in the face, because it was worthless for the first few years, and then it was sitting on tens of billions of dollars in market capitalization. Maybe the existence of something is value in itself, but gold takes time to shine?
The opportunity is that Dogecoin has gradually become the tip currency of Reddit, a famous online forum in the United States, because it is cheap, favored by a large number of netizens and celebrities, and it can be regarded as the first practical scenario for benchmarking.
At that time, a Reddit user wrote a tip bot, and when a netizen shared a great content, he could tip the robot and send 5 Dogecoin to the author to express his gratitude.
At the time, each Dogecoin was worth about $0.0005, which wasn’t much, but more importantly a sense of honor, and it was even said that “getting a tip for 5 Dogecoin is happier than receiving 2 cents ($0.02).” ”
Despite originating as a joke, the low price combined with the advantages of being easy to buy makes it easier for people interested in cryptocurrencies to participate. As a result, Dogecoin’s users expanded rapidly, increasing its value as a cryptocurrency. The infrastructure of cryptocurrencies, mining pools, and trading services were also born at the same time. And Dogecoin quickly developed a large and passionate cryptocurrency community that did some great causes and philanthropy.
For example, in 2014, the Dogecoin community raised 26.5 million Dogecoin (worth about $30,000 at the time) to support the Jamaican bobsled team to compete in the Sochi Winter Olympics. In March 2014, the Dogecoin community raised over 40 million Dogecoin (worth around $30,000 at the time) to help build clean wells in Kenya. The Dogecoin Foundation also partnered with popular YouTubers Mr Beast and Mark Rober on the TeamSeas initiative, raising $30 million for marine debris removal.
To this day, there is a related introduction on the official website of Dogecoin.

Dogecoin also has a very unique concept, if Bitcoin is a rebellion against the traditional financial system, then it is a rebellion against Bitcoin, it is completely opposite to Bitcoin, a major feature is: Bitcoin is a fixed total amount, no additional issuance, DOGE is the initial 100 billion, 5% unlimited issuance per year, that is, Dogecoin is issued 5 billion per year, and the supply is unlimited.
Another attraction of Dogecoin is the low entrance fee. A Bitcoin is worth tens of thousands of dollars, even a bear market is beyond the reach of ordinary people, and a Dogecoin is worth less than US$1 and relatively low transaction fees, which is attractive to investors with limited funds.
In addition, as Dogecoin’s popularity has grown, more and more trading platforms have announced that they can buy and sell or host Dogecoin.
You see, Dogecoin was originally used as a tip on Reddit, a well-known online forum in the United States, and later Dogecoin developed into a charitable use. Dogecoin can then be exchanged for other cryptocurrencies for investment purposes on multiple trading platforms. It is worth mentioning that there are already 1400+ stores around the world that accept customers to pay for Dogecoin, and even Musk has announced that he will accept Dogecoin to pay for the SpaceX moon landing mission.
By now, Dogecoin has jumped to the seventh largest cryptocurrency in the world, but who would have thought that the inspiration would be a photo of a Shiba Inu Kabosu that appeared online in 2010!

The price jumps repeatedly

Investing in Dogecoin is very risky because its price can change dramatically due to market sentiment, which can rise sharply in a short period of time or plunge, which is highly speculative.
In particular, Musk’s words and deeds have greatly affected the price of Dogecoin, and he tweeted in support of Dogecoin early last year, causing its price to soar more than a hundred times, and then caused the price of Dogecoin to plummet because of his remarks that Dogecoin was a scam.
Here the vernacular blockchain also takes you to review several violent fluctuations of Dogecoin.

  •  

    First: the cryptocurrency boom of 2017

     

Around March 10, 2017, with a significant increase in retail investment, the first major capital injection of Dogecoin poured into the crypto market, which boosted the price of all altcoins. Over the course of 70 days, the “hilar” cryptocurrency rose from $0.00021 to a peak of $0.0042, an increase of more than 1890%. This broke the previous all-time high of $0.0021 and sent the market capitalization soaring by $423 million. Shortly thereafter, Dogecoin plunged 75% during a two-week market correction, which in turn affected all cryptocurrencies.

  •  

    The second time: Bitcoin broke through $19,783, boosting Dogecoin

     

By November 2017, the cryptocurrency market had seen another strong buying momentum, with huge trading volumes pushing Bitcoin to a high of $19,783. The global cryptocurrency market capitalization reached a staggering $830 billion, which in turn led to parabolic growth of small market capitalization projects such as Dogecoin.
On January 7, 2018, Dogecoin broke above $0.02, 380% above its previous high. Its current market capitalization is $1.6 billion. However, this rally was very short-lived, and in 8 days the price fell by more than 70%, returning to $0.0047.

  •  

    Third: the crypto market rebounds

     

On April 14, 2018, just before the entire market entered the “crypto winter” and fell to previous lows, the vast majority of crypto projects experienced a brief recovery. Within three days, Dogecoin rose from $0.0020 to $0.0041, an increase of 103%. In contrast, Bitcoin is up just 40% in the same month. But it didn’t take long for Dogecoin’s market capitalization to drop by more than half from its all-time high.

  •  

    Fourth: Ethereum/Dogecoin bridge test

     

In September 2018, the first major rally in which Dogecoin was largely uncorrelated with other crypto markets, the system testing of the Dogecoin/Ethereum bridge was completed.

This bridge is considered a new update that will allow interoperability between the two blockchains. The announcement rekindled community support for the project, and the price of Dogecoin rose 173% in 48 hours. However, it was later learned that due to the collapse in the price of Ethereum, there was not enough funds to continue developing the bridge, so the update was shelved. Since then, no one has mentioned whether the bridge between Dogecoin and Ethereum will continue. The Dogecoin price has also recovered.

  •  

    Fifth: Tiktok turned red

     

In mid-2020, a viral video from Tiktok caused a chain reaction that triggered a sharp rise in the price of Dogecoin.
A TikTok user launched a #DogecoinTikTok# challenge to encourage netizens on the platform to buy Dogecoin and raise its price to $1 each. Some netizens calculated that if all 800 million TikTok users spent $25 to buy Dogecoin, then when Dogecoin rose to $1, each of them would earn $10,000.
There is no doubt that the hype from TikTok netizens has pushed up the price of Dogecoin. As the hype intensifies, Dogecoin is trading at more than 2.5 times what it was a few weeks ago. Then it gradually fell back.

  •  

    Sixth: WallStreetBets’ madness, Musk’s tweets

     

On January 11, 2021, traditional financial markets were severely disrupted by a subreddit forum called WallStreetBets (aka WSB). These amateur stock investors decided to band together against traditional financial institutions and launched major hedge funds such as GameStop, BlackBerry, AMC, Nokia and Bed Bath & Beyond to bet on stocks that would depreciate.
On January 28, the WSB stock market frenzy spread to Dogecoin and drove a sharp rally in cryptocurrencies. In less than two days, Dogecoin soared to an all-time high of $0.087 on Binance, an increase of 1100%. This surge was driven in part by several tweets, among them Musk.

But then Musk said in an interview that Dogecoin was a scam, and then the price plummeted…

  •  

    Seventh: Musk’s tweet

     

On April 1, 2021, April Fool’s Day, Musk said that he would use SpaceX to bring a Dogecoin to the moon.

As soon as the news came out, Dogecoin rose sharply, rising 15% on the same day. Since then, Dogecoin has started a rapid upward mode: after breaking $0.1 on April 14, it hit an all-time high of $0.43 on April 19, and the price of the coin has skyrocketed by 336% in just one week. According to CoinMarketCap, its total market capitalization reached $50 billion on April 20, surpassing Ford Motor.

On May 5, the price of Dogecoin soared again, exceeding $0.68 intraday, a 24-hour increase of more than 50%, and another all-time high. As of May, the market capitalization was about $88 billion, making it the fourth largest cryptocurrency at the time after BTC, ETH and BNB. After that, its price dropped as the popularity of the tweet declined.

  •  

    Eighth: Musk acquires Twitter

     

Dogecoin saw a parabolic surge last week, during which time Dogecoin has climbed from around $0.06 to nearly $0.15, a percentage increase that far outpaced Bitcoin’s performance.
The direct reason for this is that Musk, a longtime proponent of Dogecoin, bought Twitter for $44 billion.
Since its inception, the price of Dogecoin has soared from less than $0.0001 in 2013 to US$0.74 in May 2021, a hundred-fold increase and then a sharp decline. The price of Dogecoin is extremely volatile, so it is not suitable for investors looking for stable returns.

To sum up, Musk for Dogecoin, I have to say, is indeed a key figure. It can be seen that in 2017-2020, although there has been an increase, the overall fluctuation is not large, since Musk intervened in 2021, Dogecoin has started a rollercoaster price trend. If dogs are man’s best friend, then for the famous Dogecoin, the best friend must be Musk.

A problem that cannot be ignored

In a huge market of over 5000 cryptocurrencies, Dogecoin is a special presence, and we know that the birth of Dogecoin is entirely a dark humor. It just stemmed from Billy and Jackson’s copycat of Bitcoin in 2013, and then accidentally exploded. But I did not expect that because of the price development into today’s “behemoth”.
If price fluctuations are a major attraction of Dogecoin, and an advantage, then the next few existing problems may give you a more comprehensive and clear understanding of Dogecoin.

1. Development is stagnant, and the code has not been updated for a long time

Few people know that before Musk brought Dogecoin, Dogecoin blockchain development was more sporadic than other blockchain projects. In previous years, its underlying code maintenance had almost stalled. The last major development for Dogecoin dates back to November 8, 2019, and there were no updates to the project’s code between November 10, 2015 and February 4, 2018. Recently, until last month, it was reported that the Dogecoin development team is currently working on two major versions – core updates 1.14.7 and 1.21, but this should not be implemented yet.

2. There is almost no ecology, and the application scenarios are limited

In addition to being out of the circle once on Reddit as a tipping medium, Dogecoin as a payment method is not widely used at present, according to some reports, by 2021 or only 1300 businesses will accept Dogecoin as a payment method, and this not-so-shining achievement took eight years. Currently, there are around 40,000 transfers on the Dogecoin blockchain every day, which is less than a fraction of the number of transactions per day by Visa and Mastercard.

3. Memes alone may be difficult to sustain

And whether Dogecoin, as a carrier of value, can afford the exchange of value on a long-term scale, the answer is obviously uncertain. While it is undeniable that Dogecoin has made eye-popping gains for many investors, it is also clear that in a short period of time, it is abnormally hot, relying on the endorsement and platform effect of a few celebrities, with obvious idolatrous colors, but without any real value to rely on. In other words, it’s full of invisible bubbles.
Barry Silbert, CEO of Digital Currency Group, has shared his thoughts on Dogecoin and its market capitalization. Silbert mentioned that despite DOGE’s potential, the cryptocurrency is not worth tens of billions of dollars in market capitalization. This begs the question, is the core value of cryptocurrencies simply based on consensus?

4. Volatility is fierce, and the market risk is obvious in an irrational state

Looking at the essence through the phenomenon, the price of Dogecoin is driven entirely by hype, ignorance of the facts and misinformation, with short ups and downs and sharp fluctuations.
Although it is said that the rise and fall are the basic attributes of investment, and the surge and fall are the basic attributes of crypto investment, it can be seen from the above that the rise and fall of Dogecoin crypto assets in crypto assets all depend on market sentiment. And Memecoin is particularly affected by the positive news in the market. It is difficult to see long-term investment value in the long run without strong fundamentals and practical use cases to sustain it. It is not a very good choice for ordinary investors who want to make stable profits.

5. Musk faces a class action lawsuit over Dogecoin

On June 17, Beijing time, a Dogecoin investor sued Musk, accusing him of supporting Dogecoin by running a pyramid scheme, or pyramid scheme, and demanded $258 billion in compensation. In his indictment filed in federal court in Manhattan, New York, he accused Musk and his Tesla and SpaceX companies of extortion, saying that Musk and his company first went around peddling Dogecoin, pushing up the price of Dogecoin, and then causing its price to plummet, thereby profiting from it. Some currency bulls even formed a group to “stop Elon” from tweeting.
At the same time, SpaceX, a space exploration technology company founded by Musk, is also in turmoil. Some SpaceX employees sent a letter to management publicly condemning Musk’s behavior and suggesting that the company should be separated from Musk’s personal brand.
It can be said that there are soldiers in front of him, and there is a fire in the backyard, it seems that as a best friend, Musk has been deeply hurt!

brief summary

Of course, there were many imitations of Bitcoin before, and many, like DogeCoin, just copied and pasted the code, and then changed it, and now most of them are “dead”.
Dogecoin can last forever, and I have to say that as the most loyal friend of humans, one of the reasons may be that this Shiba Inu dog head itself is indeed too cute.
In addition, coupled with the community attributes derived from the dog’s own Meme culture, coupled with the characteristics of short transaction time, low price and more down-to-earth characteristics, the audience is relatively wide, and then there is the boost effect of celebrity Musk, which brings a different global liquidity to Dogecoin.
Now because of Musk’s acquisition of Twitter, many Dogecoin investors also have high hopes for Musk. Previously, Twitter supported users tipping Bitcoin and Ether to creators, but did not issue cryptocurrency wallet products. Some industry insiders said that Dogecoin’s surge may be related to market speculation that Musk will develop a crypto wallet on Twitter, and they hope that Musk can integrate Dogecoin into Twitter’s development in some form.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/musk-frantically-hints-at-dogecoin-which-seems-to-be-an-unreliable-scam-what-is-the-intention/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2022-11-02 10:25
Next 2022-11-02 10:26

Related articles