News of the week
THE cryptocurrency Dogecoin made the news recently after billionaire entrepreneur Elon Musk poked fun at it on popular American comedy show Saturday Night Live (SNL).
Musk first started taking an interest in Dogecoin in 2019 when he tweeted about it and called it “pretty cool”, and since then he’s mentioned it several times on social media.
With such support from one of the most successful people in technology, Dogecoin almost immediately gained international attention and doubled in value as people started buying it.
But when Musk referred to it as a “hustle” – meaning it’s not a real job – during his SNL appearance, the value dropped instantly. Before his appearance on the show, one Dogecoin cost 74 American cents, but after investors heard Musk mock it, its price dropped to 52 cents.
Dogecoin was started as a joke by Americans Billy Markus and Jackson Palmer in 2013. At the time, cryptocurrency was just becoming popular and the two men wanted to make fun of people who were excited about it.
Back then there were many questions around whether cryptocurrencies truly held any value.
The Dogecoin logo features the face of the Japanese Shiba Inu dog, which went viral when numerous “doge” memes were created about it. It also inspired Dogecoin’s name.
Its rapid rise and fall is an example of how unstable the digital exchange market is. Even just the disapproval from an influential tech entrepreneur can cause a major drop in value.
Some people, however, firmly believe cryptocurrency is the currency of the future.
They argue it makes sending and receiving money faster as the money need not first be processed by a bank.
WHAT IS CRYPTOCURRENCY?
It’s a form of payment that can be exchanged online for goods and services. For example, Burger King in the Netherlands announced last year that people can buy burgers using the cryptocurrency Bitcoin when ordering a meal online.
While a funeral parlour in America is also accepting payment in Bitcoin.
HOW DO PEOPLE BUY AND PAY USING CRYPTOCURRENCIES?
To buy a cryptocurrency, people need to sign up on a crypto exchange, which is basically an online market. To sign up, the user needs to submit personal documents, such as a copy of their driver’s licence or the details of the company they work for.
They will then add a payment option, like a credit card, with which to buy and sell the cryptocurrency.
Whatever they buy is stored in a “wallet”, which is an app with which users access their cryptocurrency.
However, users can only buy things with cryptocurrency, such as Bitcoin, if a company has that as an option for paying for goods. They copy the company’s Bitcoin address and paste it into their wallet, then type the amount of Bitcoins in the payment box and simply click “send”.