What is the intention of Musk's wild hints about Dogecoin, which seems to be an unreliable scam?

What is Musk’s intention in repeatedly stirring up waves for Dogecoin, intentionally or unintentionally?

Musk tweeted a photo of a Shiba Inu wearing a Twitter T-shirt yesterday, which incidentally boosted the latest rise in Dogecoin prices. His move also evoked memories of how the billionaire's past posts triggered a crazy rise in Dogecoin.

What is Musk's intention in repeatedly stirring up the Dogecoin controversy? Some say it's just a joke, others say it's a scam with high risk... Today, Vernacular Blockchain will take you to find out.

It started as a joke

Dogecoin was created as a joke at the end of 2013. Two engineers, Jackson Palmer and Billy Markus, modified the Bitcoin code and created DogeCoin. The original intention was just a joke, but unexpectedly, this move caused a great response from netizens and quickly led to the birth of Dogecoin.
The initial inspiration came from a Shiba Inu, whose real name is Kabosu and is from Japan. His owner is Sato, a kindergarten teacher, who often shares Kabosu's daily life online. In the article "What's for dinner today?" on February 13, 2010, Sato shared Kabosu's daily photos. In one of the photos, Kabosu has his hands folded and smiles complacently. His expression is too human, and it was the expression in this photo that struck Jackson Palmer.

Jackson Palmer, who was an Adobe employee at the time, wanted to satirize the phenomenon of cryptocurrency flooding, so he added crypto asset elements to this Doge meme and created a cryptocurrency picture with a Doge head. Jackson posted this picture on Twitter and wrote: "Invest in Dogecoin! This will be the next big thing." This post received responses from netizens in the meme world and the industry. Under the encouragement of netizens, he bought the dogecoin.com domain name and solicited partners who wanted to develop Dogecoin together on Twitter:

"Investing in Dogecoin, pretty sure it's the next big thing."

This message on Twitter quickly caught the attention of IBM engineer Billy Markus, who has also been studying cryptocurrencies and has always hoped to create a cryptocurrency that can be widely used by people rather than just for investment.
Billy contacted Jackson. Although Jackson did not respond immediately, Billy started to build Dogecoin. He copied the Bitcoin source code word for word. Although he did not understand most of it, he made some simple modifications:

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

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

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

It is said that the whole process took only about 3 hours, and Billy and Jackson officially launched Dogecoin during a lunch break. It can be said that Jackson created the official portal of Dogecoin, Dogecoin.com, and then Billy developed the first 4 versions of Dogecoin alone.
Two weeks after Dogecoin was born, its daily transaction volume exceeded that of Bitcoin. Less than a month after its birth, the number of website visitors exceeded 1 million! Later, it became popular in Taiwan with the album "I always suggest breaking up when it comes to relationship issues".

In 2014, Billy and Jackson successively withdrew from the development of Dogecoin for unknown reasons. It is speculated that Dogecoin was still worthless at the time, because even the founders themselves said in an interview: "We think this is a big joke that is destined to die", as if they didn't even have any left in their hands.
Later, a new Dogecoin core development team was formed, consisting of a core maintainer team, which has been supported by more than 40 contributors over the years. Since then, Dogecoin has been developed and maintained by them.

However, compared with the "value investment" investors in Bitcoin, Dogecoin is a bit embarrassing, because it was worthless in the first few years, and then it had a market value of tens of billions of dollars. Maybe the existence of some things is valuable in itself, but gold needs time to shine?
The opportunity was that Dogecoin gradually became the reward currency of Reddit, a famous American online forum. Because it was cheap, it was favored by a large number of netizens and celebrities. It can also be regarded as the first practical scenario for it.
At that time, a Reddit user wrote a reward robot. When a netizen shared great content, he could tip the robot and send 5 Dogecoins to the author as a token of gratitude.
At that time, each Dogecoin was worth about $0.0005. Although the value was not much, what was more important was a sense of honor. Some people even said: "Getting a tip of 5 Dogecoins makes people happier than receiving 2 cents ($0.02)."
Although it originated as a joke, the low price and easy purchase made it easier for people interested in cryptocurrency to participate . As a result, the number of Dogecoin users expanded rapidly, increasing its value as a cryptocurrency. The infrastructure of cryptocurrency, mining pools, and trading services were also born at the same time. And Dogecoin quickly developed a large and passionate cryptocurrency community, doing some great work and charity.
For example, in 2014, the Dogecoin community raised 26.5 million Dogecoins (worth about $30,000 at the time) to support the Jamaican bobsled team to participate in the Sochi Winter Olympics. In March 2014, the Dogecoin community raised more than 40 million Dogecoins (worth about $30,000 at the time) to help build clean water wells in Kenya. The Dogecoin Foundation also partnered with popular YouTube bloggers Mr Beast and Mark Rober to launch the TeamSeas program, raising $30 million for marine debris removal.
To this day, Dogecoin’s official website still has relevant introductions.

Dogecoin also has a very unique concept. If Bitcoin is a rebellion against the traditional financial system, then Dogecoin is a rebellion against Bitcoin. One of its main features that is completely opposite to Bitcoin is that Bitcoin has a fixed total amount and is not issued in increments, while DOGE has an initial amount of 100 billion and an unlimited increase of 5% each year, that is, 5 billion Dogecoins are issued each year, with no upper limit on supply .
Another attractive feature of Dogecoin is its low entry fee. A Bitcoin is worth tens of thousands of dollars, which is beyond the reach of ordinary people even in a bear market, while a Dogecoin is worth less than US$1, and the transaction fee is relatively low, which is attractive to investors with limited funds.
In addition, as the popularity of Dogecoin increases, more and more trading platforms have announced that they can buy, sell or custody Dogecoin.
You see, Dogecoin was originally used for rewarding on the famous American online forum Reddit, but later it developed into a charitable purpose. Then Dogecoin can be exchanged for other cryptocurrencies for investment purposes on multiple trading platforms. It is worth mentioning that there are already 1,400+ stores around the world that accept customers to pay with Dogecoin, and even Musk announced that he would accept Dogecoin to pay for SpaceX's moon landing mission.
To date, Dogecoin has become the world's seventh largest cryptocurrency, but who would have thought that the inspiration came from a photo of a Shiba Inu Kabosu that appeared on the Internet in 2010!

Prices jump repeatedly

Investing in Dogecoin is very risky because its price can change dramatically depending on market sentiment. It may rise sharply or plummet in a short period of time, which is highly speculative.
In particular, Musk's every word and action has a great impact on the price of Dogecoin . At the beginning of last year, he posted a series of messages on Twitter to support Dogecoin, which caused its price to soar hundreds of times. Later, his remarks that Dogecoin was a scam caused the price of Dogecoin to plummet.
Here, Plain Language Blockchain will also take everyone to review the several dramatic fluctuations of Dogecoin.

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  The first: the 2017 cryptocurrency boom

  
  

Around March 10, 2017, the first major injection of Dogecoin into the crypto market occurred as retail investment increased significantly, which boosted the prices of all altcoins. In 70 days, the "funny" cryptocurrency rose from $0.00021 to a peak of $0.0042, an increase of more than 1,890%. This broke the previous all-time high of $0.0021 and caused the market value to surge by $423 million. Soon after, Dogecoin plummeted 75% in a two-week market correction, which in turn affected all cryptocurrencies.

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  Second time: Bitcoin breaks through $19,783, boosting Dogecoin

  
  

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

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  Third: Crypto Market Rebounds

  
  

On April 14, 2018, just before the entire market entered the "crypto winter" and fell to the previous low, the vast majority of crypto projects saw a brief recovery. In three days, Dogecoin rose from $0.0020 to $0.0041, an increase of 103%. In comparison, Bitcoin rose only 40% in the same month. But not long after, Dogecoin's market value fell by more than half from its all-time high.

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  Fourth: Ethereum/Dogecoin bridge test

  
  

In September 2018, Dogecoin experienced its first major rally that was largely uncorrelated with the rest of the crypto market, and system testing of the Dogecoin/Ethereum bridge was completed.

The bridge was supposed to be a new update that would allow interoperability between the two blockchains. The announcement reignited community support for the project, and the price of Dogecoin rose by 173% in 48 hours. However, it was later learned that due to the collapse in the price of Ethereum, there was not enough money 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 price of Dogecoin has also recovered.

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  The fifth time: Tiktok became popular

  
  

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

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  The 6th time: WallStreetBets madness, Musk’s tweet

  
  

On January 11, 2021, the traditional financial markets were severely disrupted by a subreddit forum called WallStreetBets (aka WSB). These amateur stock investors decided to unite against traditional financial institutions and launch major hedge fund bets on stocks that would depreciate, such as GameStop, BlackBerry, AMC, Nokia, and Bed Bath & Beyond.
On January 28, the WSB stock market frenzy spread to Dogecoin and drove a sharp rebound in cryptocurrencies. In less than two days, Dogecoin soared to an all-time high of $0.087 on Binance, an increase of 1,100%. The surge was partly driven by several tweets, including Musk.

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

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  Seventh time: Musk’s tweet

  
  

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

As soon as the news came out, Dogecoin rose sharply, up 15% on the same day. Since then, Dogecoin has started a rapid rise mode: after breaking through $0.1 on April 14, it immediately hit a record high of $0.43 on April 19, and the price of the currency soared 336% in just one week. According to CoinMarketCap data, its total market value reached $50 billion on April 20, surpassing Ford Motor.

On May 5, the price of Dogecoin soared again, exceeding $0.68 during the session, and the 24-hour increase once exceeded 50%, setting a new record high. As of May, the market value was about $88 billion, making it the fourth largest cryptocurrency after BTC, ETH and BNB. Later, its price fell as the popularity of the tweets declined.

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  8. Musk acquires Twitter

  
  

Dogecoin has seen a parabolic surge over the last week, during which time it has climbed from around $0.06 to nearly $0.15, a percentage gain that far outpaced Bitcoin’s performance.
The direct reason was that Musk, who had long supported Dogecoin, spent $44 billion to acquire Twitter.
Looking back at its birth, the price of Dogecoin has soared from less than $0.0001 in 2013 to $0.74 in May 2021, a surge of several hundred times, and then plummeted. The price of Dogecoin fluctuates greatly, so it is not suitable for investors who seek stable returns.

To sum up, Musk is indeed a key figure in Dogecoin. It can be seen that between 2017 and 2020, although there was an increase, the overall fluctuations were not large. Since Musk's involvement in 2021, Dogecoin has started a roller coaster-like price trend. If dogs are man's best friends, then for the famous Dogecoin, the best friend must be Musk.

Issues that cannot be ignored

In the huge market of more than 5,000 cryptocurrencies, Dogecoin is a special existence. As we know, the birth of Dogecoin is completely a black humor. It just originated from Billy and Jackson's copy of Bitcoin in 2013, and then it accidentally became popular. But it was unexpected that it would develop into such a "monster" today because of its price.
If price fluctuations are a major attraction of Dogecoin, and an advantageous attraction, then the following existing problems may give you a more comprehensive and clear understanding of Dogecoin.

1. Development stagnated, the code had not been updated for a long time

Few people know that before Musk made Dogecoin popular, the development of Dogecoin's blockchain was more sporadic than other blockchain projects. In the past few years, its base code maintenance has almost stagnated. The last major progress of Dogecoin dates back to November 8, 2019, and there were no updates to the project code between November 10, 2015 and February 4, 2018. Until last month, there was news that the Dogecoin development team is currently developing two major versions - core updates 1.14.7 and 1.21, but they should not have been implemented yet.

2. Almost no ecosystem and limited application scenarios

Apart from being used as a reward medium on Reddit, Dogecoin is not widely used as a payment method. According to some reports, only 1,300 companies may accept Dogecoin as a payment method by 2021, and this unglamorous achievement took eight years. Currently, there are about 40,000 transactions transferred on the Dogecoin blockchain every day, which is less than a fraction of the daily transactions of Visa and Mastercard.

3. Memes alone may not be sustainable

Moreover, as a value carrier, whether Dogecoin can bear the value exchange on a long-term scale is obviously uncertain. Although it is undeniable that Dogecoin has made many investors achieve jaw-dropping returns, it is also obvious that in a short period of time, it has become extremely popular, relying on the endorsement and platform effect of a few celebrities, and has obvious idol worship, but has no real value to rely on. In other words, it is full of invisible bubbles.
Barry Silbert, CEO of Digital Currency Group, once shared his views on Dogecoin and its market value. Silbert mentioned that although DOGE has potential, the cryptocurrency is not worth tens of billions of dollars. This can't help but make people think, is the core value of cryptocurrency just consensus?

4. Market risks are obvious under volatile and irrational conditions

Looking through the phenomenon to the essence, the price of Dogecoin is completely driven by hype, ignorance of facts and misinformation, with short ups and downs and violent fluctuations.
Although it is said that rise and fall are the basic attributes of investment, and surge and plunge are the basic attributes of crypto investment, from the above we can see that the rise and fall of Dogecoin is a crypto asset, and the rise and fall depends entirely on market sentiment. And Memecoin is particularly affected by good market news. In the long run, it is difficult to see the long-term investment value without strong fundamentals and practical use cases to maintain it. For ordinary investors who want to make stable profits, it is not a good choice.

5. Musk faces class-action lawsuit over Dogecoin

On June 17, Beijing time, a Dogecoin investor sued Musk, accusing him of supporting Dogecoin by operating a pyramid scheme, or MLM, and demanded compensation of $258 billion. It is reported that the plaintiff is named Keith Johnson. In the indictment he submitted to the Manhattan Federal Court in New York, he accused Musk and his Tesla and SpaceX companies of extortion, saying that Musk and his company first promoted and sold Dogecoin, pushed up the price of Dogecoin, and then caused 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, the space exploration technology company founded by Musk, has also been in turmoil. Some employees of SpaceX wrote 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 enemies in front and a fire in the backyard. It seems that as the best friend, Musk has been deeply hurt!

summary

Of course, there have been many Bitcoin clones before, and many of them, like DogeCoin, just copy and paste the code and make some changes. Now most of them are "dead".
It has to be said that Dogecoin can last forever, as mankind's most loyal friend, and one of the main reasons may be that the Shiba Inu head itself is really too cute.
In addition, the social attributes derived from Dogecoin's own Meme culture, coupled with the characteristics of short transaction time, low price and more down-to-earth, make the audience relatively wide. Coupled with the boosting effect of celebrity Musk, Dogecoin has brought different global liquidity.
Now that Musk has acquired Twitter, many Dogecoin investors have high hopes for Musk. Previously, Twitter supported users to reward creators with Bitcoin and Ethereum, but did not issue cryptocurrency wallet products. Some industry insiders said that the surge in Dogecoin 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.