Elon Musk bets on Dogecoin again
Tesla CEO Elon Musk believes that Bitcoin (BTC) is not as good for day-to-day payments as the famous meme-based cryptocurrency, Dogecoin (DOGE).
Musk compared BTC, the world’s largest cryptocurrency, to DOGE, in a recent interview with Time Magazine shortly after being named Person of the Year 2021 by Time.
Fundamentally, bitcoin is not a good substitute for transactional currency,
Even though it was created as a silly joke, Dogecoin is better suited for transactions. The total transaction flow that you do with Dogecoin is transactions per day has a much higher potential than Bitcoin,” said Elon Musk, according to cointelegraph
The CEO of Tesla pointed out that Bitcoin is more suitable as a value deposit, which is why its investors prefer to own it rather than to sell it or use it for payments. “The transaction volume of bitcoin is low, and the cost per transaction is high,” Musk said.
On the other hand, Dogecoin is not as good as a safe deposit box, Musk suggested, noting that cryptocurrency is slightly inflationary. However, this “encourages people to spend, rather than sort of hoard as a store of value,” he said.
Bitcoin, the world’s most popular cryptocurrency to date, was launched in 2009 as a “peer-to-peer electronic cash system” with a limited total supply of 21 million BTC. In contrast, DOGE has an infinite supply after the currency changed to offer an unlimited supply after reaching a limit of 100 billion coins in mid-2015.
Some industry figures, such as Ripple CEO Brad Garlinghouse, have criticized Dogecoin for its alleged “inflationary dynamics” and unlimited supply.
Despite the fact that Elon Musk criticized Bitcoin as a payment instrument, his electric vehicle company, Tesla, briefly adopted BTC as its payment method earlier this year. The official reason for giving up the payment option was the company’s concern about the “rapidly increasing use of fossil fuels for bitcoin mining.”
Tesla continues to hold a significant amount of Bitcoin on its balance sheet after buying $1.5 billion in BTC in February.
A number of global companies such as Twitter have actively adopted BTC as a payment option by implementing the Lightning network to reduce transaction costs.
Dogecoin does not seem to have a much higher transaction volume than Bitcoin, according to the data in the chain. At the time of writing this article, the daily volume of Bitcoin transactions amounts to just around $31 billion, or 3.5% of its market capitalization, according to data from CoinGecko. Dogecoin’s daily transactions are now worth around $970 million, or, to be more precise, 4.6% of its market capitalization.
DOGE emerged as one of the best performing cryptocurrencies in 2021, many of which are apparently associated with Elon Musk’s active support on social media. If you’ve been following crypto news this year, you surely know about the billionaire’s active participation in mentioning the meme-currency on social media, with some people even jokingly claiming that Elon Musk was trying to become “The Doge-Father”.
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