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June 28, 2022
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Musk: Dogecoin fees must be reduced

Elon Musk spoke again on twitter about Dogecoin.

He hadn’t done this for a while, so much so that the DOGE price never approached the highs of early May again.

Dogecoin’s collapse and Musk’s few statements

Dogecoin’s market price seems to be heavily influenced by the statements of the CEO of Tesla and SpaceX, as it lost 70% of its value compared to rallies, probably due to the fact that Musk didn’t talk about it regularly, as he did. in the weeks before the highs.

After entering the top five cryptocurrencies with the highest market capitalization, it has now dropped to tenth place, ahead of the rising Avalanche (AVAX) and Terra (LUNA), and just behind the USDC.

This time, however, the tweet by Elon Musk is about a technical-financial problem.

“It’s very important that Doge fees go down to make things like buying movies viable.”

In other words, Musk believes that it would be very important for DOGE’s fees to fall to enable things like buying movie tickets.

He is likely referring to the poll conducted yesterday on the official CEO profile of the global cinema network AMC asking if they would accept DOGE as a form of payment in addition to BTC, ETH, LTC and BCH.

Given the clear victory of supporters, Adam Aron then said he would try to integrate it, but according to Elon Musk, fees could be a problem.

It should be said that generally, with traditional fiat money payments, the transaction cost is borne by the receiver, ie the seller, while with cryptocurrencies it is always and only borne by the sender, ie the customer who makes the purchase.

Protocol changes for Dogecoin

The cost of fees on Dogecoin’s blockchain is currently not high, averaging less than $0.5, but during peak months, it reached over $2.5.

Of course, if the cost per transaction reaches such high levels during peak transactions, it’s not worth paying for movie tickets with Dogecoin.

This is also due to the fact that Bitcoin, with its second-tier Lightning Network, allows almost immediate transactions and negligible costs, sometimes even less than a penny, which means that if Dogecoin wanted to compete it would have to reduce its fees considerably .

There are also other cryptocurrencies that allow payments at very low rates, so what Elon Musk says is correct, that if things are as they are now, DOGE can never become a common payment method.

With even greater volatility than bitcoin, in this 2021 Dogecoin cannot compete with the most emblazoned cryptocurrencies in the payment market, especially against BTC itself.

The Future of Bitcoin and DOGE’s Perspective

In the past, Musk has already hypothesized changes to the Dogecoin protocol to make it a better transactional currency, but project development has in fact been abandoned, so he will likely have to invent something to ensure that technical developments are reactivated.

Bitcoin remains a very strong competitor to projects like Dogecoin, especially now that it has been adopted as the official currency in at least one country (El Salvador), with the prospect of spreading as such to other parts of the world.

As far as DOGE is concerned, however, this perspective still seems extremely remote.

Source: cryptonomist

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