Elon Musk stressed that Bitcoin is better suited as a store of value, which is why investors prefer to hoard it rather than sell it or use it for transactions.
BTC, according to Tesla CEO Elon Musk, isn’t as good for everyday payments as the meme-based cryptocurrency DOGE. In a Time Magazine interview shortly after being chosen Time’s Person of the Year for 2021, Musk compared Bitcoin, the world’s largest cryptocurrency, to DOGE.
Elon Musk’s Thoughts on Dogecoin-Bitcoin Payments
“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, like transactions per day, is much higher potential than Bitcoin,” Musk said.
The Tesla CEO stressed that Bitcoin is better suited as a store of value, which is why investors prefer to hoard it rather than sell it or use it for transactions. “The transaction volume of Bitcoin is low, and the cost per transaction is high,” Musk explained.
Musk, on the other hand, warned that Dogecoin isn’t the best store of wealth, saying that the cryptocurrency is “somewhat inflationary.” However, he argued that this “encourages people to spend rather than hoard as a store of value.”
Bitcoin, the most valuable cryptocurrency to date, was first introduced in 2009 as a “peer-to-peer electronic cash system” with a limited total quantity of 21 million BTC. DOGE, on the other hand, has an indefinite supply after reaching a supply limit of 100 billion coins in mid-2015 and switching to an uncapped supply.
Dogecoin has been chastised by certain industry professionals, including Ripple CEO Brad Garlinghouse, for its purported “inflationary dynamics” and unlimited supply.
Despite Musk’s criticism of Bitcoin as a payment mechanism, his electric vehicle company, Tesla, used BTC as a payment option for a limited period earlier this year.
The corporation cited concerns about the “rapidly expanding usage of fossil fuels for Bitcoin mining and transactions” as the official reason for removing the payment option. After purchasing $1.5 billion in Bitcoin in February, Tesla still maintains a considerable quantity of Bitcoin on its balance sheet.
Several global companies, such as Twitter, have actively adopted Bitcoin as a payment option by implementing the Lightning Network to reduce transaction costs.
According to on-chain data, Dogecoin does not appear to have a much higher transaction volume than Bitcoin. According to CoinGecko data, Bitcoin’s daily transaction volume is $31 billion, or 3.5 percent of its market capitalization, at the time of writing. The daily transactions of Dogecoin are worth $970 million, or 4.6 percent of its market capitalization.
DOGE has risen to become one of the best-performing cryptocurrencies in 2021, thanks in part to Musk’s strong social media advocacy.
