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Dogefather’s Market-Moving Tweet

On Friday, the Tesla CEO—famously called "The Dogefather"—lifted Dogecoin out of its current slump, resurrecting the crypto meme-coin above 22 cents following a gradual downturn that saw it go below 20 cents on Thursday. That is still a far way from Dogecoin's euphoric May highs of 74 cents in the run-up to Musk's highly anticipated Saturday Night Live hosting gig.

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On Friday, the Tesla CEO—famously called “The Dogefather”—lifted Dogecoin out of its current slump. It ressurects the crypto meme-coin above 22 cents following a gradual downturn that saw it go below 20 cents on Thursday. That is still a far way from Dogecoin’s euphoric May highs of 74 cents in the run-up to Musk’s highly anticipated Saturday Night Live hosting gig.

Musk replied to YouTuber and Dogecoin investor Matt Wallace’s observation. Wallace’s observed updates would ideally put Doge to become one of the world’s most extensively and widely used currencies. The accomplishment was by pitching his ideas for improvements to Dogecoin’s blockchain transaction system. In his opinion, it would give it an edge over Bitcoin and Ethereum.


Musk’s Moves to Influence Dogecoin

While Musk’s ability to influence the crypto markets at the push of a button is well documented at this time, it was his comments on the more wonky parts of digital currencies that made this instance particularly intriguing. Particularly for those unfamiliar with their technical nuances.

Whereas Bitcoin and Ethereum are constrained by sale pets that are too slow. Sale costs too high, Musk believes Dogecoin can encircle these issues. Utilizing exchanges such as Coinbase and Binance as a “de facto secondary layer” for transaction processing theoretically makes transactions faster and more efficient.

If the notion that crypto exchanges may act as a “de facto secondary layer” for authenticating and processing Dogecoin transactions seems strange, if not implausible, it is. As per David Sacco, a professor at the University of New Haven’s Pompea, a system that permits third-party crypto exchanges to participate in transaction processing appears counteractive to the very nature of cryptos and the underlying blockchain technology.

As Musk observed, both Bitcoin and Ethereum have sought “multilayer” transaction methods to address these concerns. With Bitcoin’s Taproot upgrade scheduled to launch this fall. Still, in the case of Dogecoin, the Tesla CEO appears to take that administering crypto exchanges would stylishly serve the crypto as a secondary caste to grease hastily, further affordable trading.

Musk’s Optimistic Perspective on Dogecoin

As Bitcoin.com adds, Dogecoin developers are now working on the modifications indicated by Wallace in his initial tweet. Which promise to reduce Dogecoin’s cost structure and increase transaction rates. And there were plenty of crypto-aware Twitter users who responded to Musk. They mentioned existing blockchain networks that they claimed could do the requested function, such as Lightning Network and Solana.

Also, according to Sacco, offering an outsized part to elect exchanges could harm Dogecoin’s overall “fungibility”. Making it more grueling to trade the coin on spots that aren’t sharing in its sale process. According to him, Ethereum and Bitcoin are undergoing modifications to make them more fungible and easier to trade. If Dogecoin takes its path, he is unsure how to make it more appealing.

Of course, while discussing Dogecoin, it’s challenging to ignore Musk’s perspective. More than anyone else, he is responsible for the Dogecoin phenomenon. He has also played a significant role in the marketing and adoption of cryptocurrencies in general. As is customary, the rest of the cryptocurrency community leaves to monitor his Twitter account and see what happens next.

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Sophia Vasquez is a journalist and writer for iBaseTrading. She has over 10 years of experience writing about Business news and has been covering the blockchain and cryptocurrency space since 2011.