What is dogecoin: Question Elon Musk couldn’t answer on Saturday Night Live

When billionaire Elon Musk appeared on popular US sketch show SNL, he was happy to spruik cryptocurrency. But couldn’t nail one answer.

Elon Musk has been grilled about the joke cryptocurrency dogecoin when appearing in a comedy sketch on popular US show Saturday Night Live.

The billionaire was hosting the sketch show, a spot usually reserved for film stars or professional comedians, rather than tech moguls.

Playing a fictional financial expert called Lloyd Ostertag in a skit for its parody news program, Mr Musk started out by quipping “Call me the Dogefather”.

He was joined in the skit by comedian Michael Che, who first asks him about cryptocurrency.

“Cryptocurrencies are a type of digital money, but instead of being controlled by a central government, they are decentralised using blockchain technology,” he said to awkward laughter from Mr Che, who was acting as the host of the news program in the skit.

“Lately, prices have been soaring for cryptos like bitcoin, ethereum and especially dogecoin,” continued Mr Musk.

Looking bewildered Mr Che then asks him again: “Now what is dogecoin?”

“Well it actually started as a joke based on an internet meme, but now it’s taken over in a very real way,” Mr Musk responded.

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Elon Musk appeared in a skit as a financial adviser talking about dogecoin. Picture: Twitter Saturday Night Live @nbcsnl

But that answer wasn’t good enough for Mr Che: “Ok, but what is dogecoin?”

“Well it was created in 2013 and has a circulating supply of 117 billion coins of which 113 billion have already been mined,” Mr Musk said.

Things still weren’t clear for Mr Che who insists Mr Musk needs to answer again: “Like I said it’s a digital currency,” he responded.

Changing direction, Mr Che then pulls a $US1 bill out of pocket during the skit and said “For instance, here’s a $1, it’s real, so what is dogecoin?” to laugher from the audience.

“It’s about as real as that $1,” Musk hits back. Mr Che then pulls in a colleague to ask if he is making any sense of the digital coin, who talks about how he has looked into it to diversify his investment portfolio before asking again: “What is dogecoin?”

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Dogecoin was started as joke cryptocurrency but has gained following. Picture: iStock

Mr Musk took it well and said he was “glad he had asked”.

“It’s the future of currency,” he continued. “It’s an unstoppable financial vehicle that’s going to take over the world.”

Mr Che followed up: “I get it but what is it, man?”

“I keep telling you it’s a cryptocurrency you can trade for conventional money,” Mr Musk said laughing.

The clincher then comes with Mr Che declaring: “Oh, so it’s a hustle?” Mr Musk hold his hands up in the air before he said: “Yeah, it’s hustle.”

Lloyd Ostertag stopped by the desk to talk cryptocurrency. pic.twitter.com/cuILxOBJlj

— Saturday Night Live - SNL (@nbcsnl) May 9, 2021

After going in to bat for the revolutionary new tech, Mr Musk’s admission, set Twitter alight immediately.

Mr Musk also brought his mother out during the intro sketch to fit in another joke about the trending crypto, making the price of dogecoin plummet.

“I’m excited for my Mother’s Day gift,” she said. “I just hope it’s not dogecoin.”

Seeing as Mr Musk failed spectacularly in trying to explain what dogecoin is, let’s give it a try.

What is Dogecoin?

It was started to mock bitcoin in 2013 by IBM and Adobe software engineers Jackson Palmer and Billy Markus. It’s even got an Aussie connection as Mr Palmer is Australian and created dogecoin when he was 26 and living in Sydney.

“It was a p*ss take,” he told the Sydney Morning Herald in 2018. “My whole point of dogecoin was taking a jab at all these alt-coins that were coming on the scene – like Initial Coin Offerings are today – and, you know, basically making a cash grab.

“So I made the joke and it was me taking the p*ss out of really scammy cryptocurrency back then. But then it quickly turned into a legitimate thing … and at that point, I was like, ‘Oh my god, now I feel responsible for this joke.’ I feel responsible for this economy.”

The cryptocurrency is even represented by an internet meme of Shibu Inu dog breed with bad spelling habits, hence the use of ‘doge’, and is in reference to a popular internet cartoon series from the 1990s called Homestar Runner.

Neither of the founders work on dogecoin anymore.

‘The most ironic outcome would be that dogecoin becomes the currency of Earth of the future,’ Mr Musk said. Picture: iStock

How do you pronounce it?

The cryptocurrency’s co-founder Mr Markus says the correct pronunciation is “dohj coin”, despite its logo including a dog.

What’s the Elon effect?

Mr Musk is dogecoin’s best known supporter but admits when he is talking about digital currency he is only joking – despite the fact he has caused crazy price spikes for the cryptocurrency.

The currency briefly traded at $US0.70 ($A0.89) per coin on the Tuesday before his SNL appearance, and was valued higher than Twitter and Ford, according to BeInCrypto.

“Arguably the most entertaining outcome, the most ironic outcome would be that dogecoin becomes the currency of Earth of the future,” he said back in February on the invite only Clubhouse app.

But on Friday morning he tweeted the following warning: “Cryptocurrency is promising, but please invest with caution!”

Mr Musk, who has over 53 million Twitter followers, tweeted alongside a video obtained by TMZ in which he tells the outlet, “First of all, I think people should not invest their life savings in cryptocurrency to be clear. I think that’s unwise.”

He added that “there’s a good chance” crypto becomes the main currency on Earth, but no one knows which digital coin will become the most prolific. He added that putting money in it “should be considered speculation at this point”.

But Musk’s SpaceX corporation is betting big on the cryptocurrency. It will send a satellite to the moon in early 2022 in a mission funded entirely by dogecoin, according to the company announcement on Sunday.

“We’re excited to launch DOGE-1 to the Moon,” said SpaceX vice president of commercial sales Tom Ochinero

“This mission will demonstrate the application of cryptocurrency beyond Earth orbit and set the foundation for interplanetary commerce.”

Musk’s SpaceX corporation will send a satellite to the moon in early 2022 in a mission funded entirely by dogecoin, it announced on Sunday. Picture: SpaceX/AFP

How has the price fluctuated?

Mr Musk’s appearance on SNL along with regular tweets has seen dogecoin’s price skyrocket.

Investors who held $US1000 ($A1280) of the currency on January 1 would have $US112,500 ($A144,500) in their wallets as of Wednesday night.

It’s up a whopping 10,400 per cent since January 1, CoinDesk data shows.

But a sudden 25 per cent drop in dogecoin during Mr Musk’s SNL appearance made investors nervous, wiping out $US20 billion in the cryptocurrency’s total market value before it recovered slightly.

On online forums, some posters commiserated about their loses on Reddit: “My face when I lose $700 in 10 minutes,” said one, presenting a meme image of a worried-looking Elon Musk.

The currency plummeted to $US0.50 before rebounding to $US0.56 as the show went off the air, according to CoinDesk.

Looking at the price from April 25 to May 5, it sat at 70.78 cents soaring by 137 per cent in one week and up 18.526 per cent over a year.

Dogecoin is now the fourth largest cryptocurrency with a market cap of over $72 billion, said Tony Sycamore, APAC market analyst at City Index.

“Its price movements are being driven by a handful of highly influential social media personalities, including Elon Musk,” he said.

“After a spectacular 170 per cent rise since late April, dogecoin fell almost 45 per cent over the past weekend. This coin isn’t for the faint-hearted.”

Scott Pape, the Barefoot Investor, said dogecoin has zero tangible value. Picture: News360

What are the experts saying?

Scott Pape, better known as the Barefoot Investor, has issued a word of warning to his followers who are considering investing in the red-hot cryptocurrency dogecoin.

While conceding dogecoin was the best-performing cryptocurrency over the past six years – far outstripping the likes of bitcoin and ethereum – Pape noted it was “set up as a p*ss-take by its Aussie founder” and had “zero tangible value”.

“It is worthless,” he wrote. “So do I feel a twinge of regret for not getting in? No.

“For much the same reason that I’ve never contemplated putting 1 per cent of my net worth into the pokies (Just in case, you know, I win the jackpot).

“You see, in order to make real money you have to sell. And every man and his dog is planning to sell out of dogecoin right at the top. Every single one of them.

What’s next for dogecoin?

It’s a “flash in the pan”, which mean people could lose a lot of money, according to Adam Zadikoff, chief operation’s officer of BRD, a popular crypto wallet that boasts more than 7 million users in the US.

“My guess is that [the rally] won’t last, especially for something like dogecoin which was never meant to be a payment system or a store of value,” he told CNBC. “Yes, you can make a quick buck if you time it right, but timing the market is a terrible thing to try to do. It does not work.”

Latecomers will see their investments go up in smoke, added Mr Zadikoff, who said he wouldn’t invest money into dogecoin unless he was willing to lose it all.

“It’s great if you have some disposable income and you’re playing around and you’re having fun with it,” said Mr Zadikoff. “The danger is you’re the last person holding the bag.”