Elon Musk has shown interest in many cryptocurrencies, and many value his opinion. Last week, Elon Musk used the social media platform Twitter to let everyone know how Dogecoin (Doge) could become as popular as Bitcoin (BTC) and Ethereum (ETH) cryptocurrencies.
How is Dogecoin’s strategy different?
For those unfamiliar with what layers are in the cryptocurrency world, it is safe to understand that they are levels used in blockchain technology. Elon Musk thinks that it is a good thing Doge is working on maximizing base layer transaction rates. He tweeted that these cryptocurrencies have a high transaction cost and a slow base layer transaction rate when comparing the coin with BTC and ETH. This could mean that, although BTC and ETH technologies are aiming at building multilayers transaction systems, low base layer transaction fees are still essential. Tesla’s CEO and SpaceX founder also mentioned that it is not necessary for the Doge to operate as fast as Visa.
Musk’s tweet was not welcomed by everyone.
Elon Musk wrote the tweet about Dogecoin in reply to Matt Wallace’s announcement about the new Dogecoin update. Other financial advisors and business analysts disagree with Elon Musk and, although the cryptocurrency world is in the bear phase, many people can lose all their investment.
BTC & ETH are pursuing a multilayer transaction system, but base layer transaction rate is slow & transaction cost is high.
There is merit imo to Doge maximizing base layer transaction rate & minimizing transaction cost with exchanges acting as the de facto secondary layer.
— Elon Musk (@elonmusk) July 9, 2021
Elon Musk’s tweets mean money.
This is not Elon Musk’s first tweet about Dogecoin, and although this cryptocurrency started as a joke, it now competes with Bitcoin and Ethereum. Dogecoin gained 8% since Elon Musk’s tweet in reply to Matt Wallace, and this shows how powerful his opinion can be. Other entrepreneurs have also invested in Doge: Mark Cuban and Slim Jim are some of them. Since the beginning of this year, Dogecoin has gained 5,000%, and Elon Musk will take a token with him on the moon to plant it.