Elon Musk, the CEO of Tesla and SpaceX, started his birthday with a tweet that may have been responsible for the cryptocurrency Dogecoin's price rising by more than 4% in less than a day earlier this week. The meme currency was selling at $0.26 as of mid-afternoon Monday, up 4.29 percent from the weekend.
Musk replied to Dogecoin founder Ross Nicoll's tweet regarding the proposed fee change for the cryptocurrency with three simple words: "Important to support." But what exactly is the idea, and how would it affect Dogecoin holders in particular, as well as the cryptocurrency market as a whole?
Proposal for a New Doge Fee Structure
The plan, which was published on GitHub yesterday by Doge expert Patrick Lodder, detailed a new price structure that would be “gradually applied to the network through numerous software releases.”
The proposal claims that Doge developers added transaction fees in 2014 to “reduce on-chain spam.” In 2018, engineers noticed that many transactions were not adhering to the rules, with 8% of transactions lacking fees and another 11% not correctly implementing those fees.
During the first half of the year 2021, the proposal said, people are keeping their Doge investments on centralised platforms since the cost of transferring the coin to a secure wallet is disproportionately high due to all-time high exchange rates against the US dollar and the Bitcoin cryptocurrency, resulting in higher than necessary transaction costs.
Doge transactions used to be ten times cheaper than LiteCoin transactions, the proposal states, and It's also five times more expensive now.
Among a few other changes, the proposal calls to:
- Reduce the relay fee to 0.001 Doge.
- Reduce the default charge to 0.01 Doge.
- Bring back a free transaction area that is both useful and convenient.
What Does This Mean for Doge and Cryptocurrency?
Due to its low buy-in price and availability on platforms like Coinbase, Doge is already one of the more accessible cryptos. As more people get experience trading crypto through a low-stakes coin, the fee policy adjustment will allow them to take advantage of Doge's low buy-in price.
Musk has showed his support for cryptocurrency in a variety of ways in recent months, including working with Dogecoin developers to "enhance system transaction efficiency,” Benzinga reports. He also encouraged his large Twitter following to contribute suggestions for Doge enhancements via the subreddit reddit.com/r/dogecoin or the GitHub platform.
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