Finance

The Cryptocurrency Ballad Of Elon Musk And Dogecoin

Thanks to Elon Musk, it seems that Dogecoin could be the first cryptocurrency to actually be of real use as a, well, currency.

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Elon Musk (Photo by Diego Donamaria/Getty Images for SXSW)

Though the roots of cryptocurrency go back decades, software allowing for Bitcoin transactions and Bitcoin mining first became available to the public in 2009. Bitcoin was not assigned a monetary value until 2010. Purportedly, in the first sale involving Bitcoin, somebody traded 10,000 units of the digital currency for two pizzas.

It didn’t take long for cryptocurrency to take off. Today, a single Bitcoin is worth about $43,000, and major banks (including Morgan Stanley, Citigroup, and JP Morgan Chase) have made large investments in Bitcoin.

The rise of cryptocurrency isn’t just a tale of Bitcoin, however. Shortly after Bitcoin became publicly available, numerous other cryptocurrencies sprang to life. Dogecoin was among them.

Although it is but one of many cryptocurrencies, Dogecoin is in a class of its own. Unlike most other cryptocurrencies, which are only accidentally jokes, Dogecoin was explicitly started as a joke.

Yes, Dogecoin was launched in 2013 as a parody of the cryptocurrency craze. After an online meme of a Shiba Inu went viral (the Shiba Inu is a Japanese hunting dog breed), Dogecoin slightly modified the meme image, nicknamed the resulting cartoon dog “Doge,” and adopted Doge as its mascot. The rest is history.

Perhaps surprisingly, given that it was never really meant to be anything other than a joke, Dogecoin was actually used quite a bit right from the start. Unlike many Bitcoin enthusiasts, early Dogecoin adopters were never as concerned with getting rich. But while it didn’t initially mint a lot of instant millionaires, Dogecoin did come with a low entry barrier for those wanting to dabble in cryptocurrency for the first time, and it created a community of adherents eager to spread the cryptocurrency around to reward good deeds done online.

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Dogecoin seemed to enter a new era when CEO of SpaceX, CEO of Tesla, and (at times) world’s richest man Elon Musk developed an interest. Musk sent out a series of tweets about Dogecoin in 2021, which sent its price surging. Overall, Dogecoin’s value was up by more than 4,000 percent in 2021. Musk said he’d invested in Dogecoin himself, he dubbed it the “people’s crypto,” and he indicated that SpaceX would accept it as payment.

Now, thanks to Elon Musk, it seems that Dogecoin could be the first cryptocurrency to actually be of real use as a, well, currency, as opposed to a highly speculative investment vehicle or a kind of black-market trading token. After teasing in mid-December that Tesla would test using Dogecoin as a payment method, Musk announced on January 14 that the electric automaker has officially started allowing customers to buy branded Tesla merchandise with Dogecoin.

The move rocketed Dogecoin’s price up another 18 percent. Even after the gain, Dogecoin rates as a pretty affordable crypto option. At the end of last week, a single unit of the meme cryptocurrency would have only set you back about 20 cents.

Despite his cheerleading efforts when it comes to cryptocurrencies, don’t think Elon Musk is recommending you take out a second mortgage to double down on Dogecoin anytime soon. “People should not invest their life savings in cryptocurrency, to be clear,” Elon Musk told TMZ in an interview last spring. “That’s unwise.” Still, Musk thinks some form of cryptocurrency has a place in the future of our society, and he thinks you should go for it in crypto even in the present “if you want to speculate and have some fun.”

Pressed to define it in a comedic Saturday Night Live segment, Elon Musk called Dogecoin “a hustle.” Less than a year later, he’s accepting the meme cryptocurrency as payment for some of Tesla’s popular branded merchandise.

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What’s next for Elon Musk and Dogecoin? It’s anybody’s guess, but whatever it turns out to be, it’s sure to come with some entertainment value.

Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

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