Dogecoin gains 8% after Elon Musk says DOGE payments compete with Bitcoin, Ethereum

The billionaire’s latest public praise of Dogecoin yields few returns but a lot of mockery.

Dogecoin (DOGE) may need a new marketing strategy after the latest publicity stunt from Elon Musk moved its price by less than 8%.

In a tweet on July 8, “Dogefather” Musk argued that Dogecoin could do a better job at payments than Bitcoin (BTC) or Ethereum (ETH).

Musk: BTC, ETH “slow” with high fees

The latest in a long line of plugs, the Tesla and SpaceX CEO was responding to crypto YouTuber Matt Wallace, who revealed excitement an upcoming protocol upgrade. 

“BTC & ETH are pursuing a multilayer transaction system, but base layer transaction rate is slow & transaction cost is high,” Musk claimed.

“There is merit imo to Doge maximizing base layer transaction rate & minimizing transaction cost with exchanges acting as the de facto secondary layer.”

BTC & ETH are pursuing a multilayer transaction system, but base layer transaction rate is slow & transaction cost is high.

There is merit imo to Doge maximizing base layer transaction rate & minimizing transaction cost with exchanges acting as the de facto secondary layer.

— Elon Musk (@elonmusk) July 9, 2021

The proposal envisages Dogecoin having on-chain transactions as the norm, with exchanges essentially fulfilling the role that the Lightning Network does on Bitcoin.

Exchanges currently process large numbers of transactions internally without touching the blockchains of respective coins. These are then synced as necessary, resulting in fewer on-chain transactions and therefore fewer fees and less strain on the relevant blockchain.

Responding, Twitter users took issue with the concept that exchanges would be happy to fulfill such a role. 

Employing centralized trusted third parties as the backbone of a payment network, others hinted, was vastly inferior to the Lightning Network solution.

“Elon Musk and Jeff Bezos are pursuing a multi planetary space transport, but development is slow & cost is high,” podcast host Peter McCormack mockingly replied.

“There is merit imo to building rockets with spit and cardboard, increasing build speed and minimising cost.”

DOGE price limps 70% below peak

For all the attention, meanwhile, DOGE/USD once again moved only slightly, trading up 7.6% at just under $0.23 at the time of writing.

Related: Elon Musk’s latest attempt to pump Dogecoin fails miserably

Against its all-time highs from May 8, when Musk went on Saturday Night Live to bring Dogecoin to a wider audience, the pair is still down 70%.

Musk has inadverently diverted attention from DOGE with his own social media campaigns.

Various tweets have spawned new dog meme-themed cryptocurrencies — a post about Musk adopting a shiba inu named “Flocki” quickly saw the emergence of a raft of shiba inu-related tokens.

Prior to that, SHIBA INU (SHIB) itself competed with DOGE as retail investors piled into the meme trades.