Elon Musk already flirted with cryptocurrencies at the beginning of the year, allowing the purchase of cars for Bitcoin. The experiment ended after a month and a half, with the deciding factor being Bitcoin's environmental unfriendliness. Now the company is incorporating Dogecoin into its payment system, but the choice of cryptocurrency has caused confusion among professional community members.
Elon Musk is known as the godfather of Dogecoin or the "Dogefather", given his frequent mentions and expressions of admiration for the cryptocurrency. His tweets have often resulted in the coin's value doubling. However, as time has gone on, the power of his statements has weakened.
The reason for this is Elon Musk's inconsistency. When he abandoned Bitcoin, the Tesla chief played heavily on its poor environmental record. However, Dogecoin works on the same proof-of-work principle and requires miners' participation. According to rough estimates, the annual electricity consumption of the Dogecoin network is 3 GWh, which corresponds to the total energy consumption of countries such as Montenegro, Jamaica or Yemen.
In simple terms, Musk traded something bad for something worse. He claims Dogecoin's main advantages are lower commissions ($0.40 versus $2 for Bitcoin at the time of writing). However, the meme cryptocurrency has higher volatility and is less secure as a repository of value.
One of Dogecoin's developers, Jackson Palmer, called Musk a "narcissistic swindler" in the spring for his wanton bias and thirst for hype. Former SEC analyst Mark Powers urged the regulator to investigate Musk for abuse of confidence. Elon Musk has also promoted other canine-themed meme cryptocurrencies, which Powers believes is leading to multi-million dollar losses amongst his followers.
But, apparently, the crypto market has already developed immunity to the "Dogfather's" antics: this time around, most of the price increase resulting from Musk's news had been cancelled out 24 hours later.
The StormGain Analytical Group
(a platform for trading, exchanging and safeguarding cryptocurrency)
