Cryptocurrencies such as Bitcoin, Ethereum, and Dogecoin have become popular in recent years. A cryptocurrency is a computer code generated by publicly available software that allows people to store and send value online—the code groups transactions onto the “blockchain”, a public record. Blockchain is a large file storing every transaction ever made. This makes cryptocurrency highly secure and private. One can “mine” cryptocurrencies using the methods such as POW and POS. POW (Proof of Work) is a method that uses hardware (GPU, ASIC mining machine) that processes hash operations to ensure that only the fastest mined blocks are recognized and rewarded. POS (Proof of Stake) is a method that gives more permission to mine or validate block transactions in proportion to the amount of coins one owns. The reward is paid in the same way as interest, and one can get compensation simply by connecting a “wallet” that holds a certain number of coins to the blockchain network.
Of all the cryptocurrencies on the market, the currently most talked-about is Dogecoin. Dogecoin is a POW-based cryptocurrency created by IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer. Dogecoin was introduced on Dec. 6, 2013. The two creators made Dogecoin as a joke, hoping to make fun of the speculation in cryptocurrencies. It was not planned to be used in practice, and therefore, the amount of issuance was unlimited. This is why the price accessibility of Dogecoin is higher than other coins. Also, its price moves purely by supply and demand. These features made Dogecoin a highly volatile coin, attracting the attention of the online community Reddit’s virtual currency investment information sharing room, Satoshi Street Betts, which made the price of Dogecoin rise in earnest.
There is another big reason why Dogecoin became widely known. It is because of Tesla CEO Elon Musk and his tweets. Musk is the most prominent factor that led to the price increase and decrease of Dogecoin. Musk has been leading the rise in the price of Dogecoin by posting numerous pictures of it and praising it for a long time. On April 1, Musk posted a tweet saying, “SpaceX is going to put a literal Dogecoin on the literal moon.” In the U.S. stock market, “moon” is a slang word for soaring prices. After Musk tweeted, the price of Dogecoin soared 32% within minutes. However, on May 12, Musk said on Twitter that he decided to withdraw his previous position of receiving Bitcoin when selling Tesla vehicles. This triggered the price of cryptocurrencies, including Dogecoin and Bitcoin, to slide. Musk has tweeted about Dogecoin every five days. Each time, the price of Dogecoin rose to as little as 10% and as much as 700%.
Since many people believed in Elon Musk’s support for Dogecoin, they were angry at the price of Dogecoin going up and down with a few lines of Musk’s tweets. There are various positions on investing in Dogecoins. Some people focus on the fact that companies such as JM Bullion, the largest gold and silver e-commerce site in the U.S., allow Dogecoins as a practical means of payment. However, financial authorities are concerned since cryptocurrency fluctuates in price every time influencers like Musk drop a bombshell. The U.S. Securities and Exchange Commission (SEC) issued a warning for a stronger government response to manage cryptocurrencies.