Elon Musk: Dogecoin Is Better Than Bitcoin For Transactions

Elon Musk’s love of Dogecoin is nothing new, but he’s starting to give it serious praise beyond just memes. He recently claimed that while Bitcoin makes a good store of value, Dogecoin trumps it as a medium of exchange.

Musk has criticized Bitcoin for its low transaction throughput, but the Bitcoin community generally disfavors his solutions.

Dogecoin Over Bitcoin?

Musk – who was recently named Time’s “Person of the Year” – spoke in an interview with the magazine released today. When asked about cryptocurrencies, the Tesla CEO said he could “wax on about creating money for hours”. However, given his involvement in Paypal’s creation, he said very few people understand how money works like him.

While Musk calls Bitcoin an exciting example and the “prime mover” among cryptos, he critiques it as slow and costly. He sees its use case as limited to only a store of value.

“Fundamentally, Bitcoin is not a good substitute for transactional currency,” he said.

Elon Musk responds in Russian to singing entrepreneurs | Euronews
Elon Musk. Source: Euronews

On the other hand, Musk considers Dogecoin “better suited” for transactions than Bitcoin due to its higher TPS. While Bitcoin can process about seven transactions per second, Dogecoin can manage 33. Both pale compared to traditional payment companies like Visa, however, which claims it can process over 20 000 tps.

Musk recognizes that Doge is slightly inflationary, but only at a fixed number rather than a percentage of the current supply. Due to this, he thinks Doge strikes a balance between not being too inflationary while still “encouraging people to spend.”

Bitcoin’s design limits it to a fixed supply cap of 21 million coins. So far, 90% of those coins have been mined and will continue to be at a diminishing speed over time.

Bitcoin’s Solutions

The community has consistently recognized Bitcoin’s transaction speed as a significant scaling limit. However, Elon’s ideal solution is to increase Bitcoin’s block size. He’s even suggested that if Dogecoin increased block size by 10X, it would easily beat Bitcoin as the “currency of Earth”.

Bitcoiners rejected increasing block size as a viable solution years ago, after leaving Bitcoin Cash as its substitute. Instead, they’ve chosen to facilitate fast and cheap transactions using the lightning network, which is gaining widespread adoption.

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As of now, Bitcoin is successfully processing billions of dollars in transactions per day. Its volume has even surpassed that of PayPal.

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