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Saturday, December 2, 2023

Dogecoin: Elon Musk advocates lowering transaction fees

Dogecoin gets a boost from a tweet from Elon Musk expressing support for a proposed DOGE update. The community plans to lower transaction fees.

The controversial SpaceX founder and Tesla boss Elon Musk has again posted a tweet that has had a significant impact on the price of a cryptocurrency. Once again it is about the Memecoin Dogecoin. Musk posted a tweet late Sunday about a number of important updates to the DOGE blockchain. The changes that Musk alludes to would mean a significant intervention in the software architecture of the cryptocurrency. A post previously shared on the social media platform Reddit suggests reducing the average fees for standard transactions on the Dogecoin blockchain by 100 times. In addition, the Dogecoin stakeholders should have full control over all aspects of the fees between miners and node operators. 

Of course, lower fees would be primarily an incentive for those who use Dogecoin for cash verifications, wire transfers, and online payment processing. In return, however, the incentive for miners to update and secure the Doge blockchain would most likely decrease.

Musk posts a typical tweet about Dogecoin

As laconic as ever, Elon Musk commented on this proposal with an “Important to support” – so he advocates these changes. The DOGE price promptly got a price surge through the said tweet. It rose from $ 0.242 to as high as $ 0.266. But not only Musk, many other Reddit users also responded enthusiastically to the proposal.

The rapid price increase of DOGE is not least with previous tweets from Musk associated . At the same time, network fees also went up. Many on-chain transactions became completely unprofitable. To counteract this, the developers have now considered changes to their fee policy. If the announced proposals can be implemented, this would pave the way for DOGE as a transaction cryptocurrency. 

However, the competitive pressure in this regard is not exactly low. The proposed changes are not only aimed at the outcome, but also at the decision-making power. This should again go more to the side of the miners, to the detriment of the relay network. This also includes better configurability of all fee-relevant parameters and overall more sovereignty for the individual node operators. However, the average fees on the Dogecoin network are already relatively low compared to other tokens. The current average fee is around $ 0.49. For comparison: Bitcoin is $ 7.12 and Ethereum is $ 4.17

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