Dogecoin is better than Bitcoin as a payment option, believes Elon Musk
Tesla’s CEO, Elon Musk, has said he believes that Bitcoin is not a good option for everyday payments in comparison to the meme-based Dogecoin (DOGE).
Musk has compared Bitcoin, the world’s largest crypto coin, to DOGE in a Time Magazine interview following his being named as the Time’s 2021 Person of the Year.
Musk was recorded to be saying that Bitcoin “is not a good substitute for transactional currency.” He added that even though it was created out of a silly joke, Dogecoin is still far “better suited for transactions,” highlighting that the total transaction flow that one can do with Dogecoin, like transactions per day, has a “much higher potential than Bitcoin.”
Tesla’s CEO has emphasized that Bitcoin could be more suitable as a store of value, which is the reason its investors are preferring holding it rather than selling or using it for payments.
Musk noted that the transaction volume of Bitcoin is “low” while its cost per transaction is “high.”
On the other hand, he explained, Dogecoin is not good as a store of value like Bitcoin, hinting that the crypto token is “slightly inflationary.” However, this fact would only “encourage people to spend” rather than sort of hoarding it as a store of value.
Bitcoin had been launched in 2009 as a “peer-to-peer electronic cash system” , having a limited total supply of 21 million bitcoins. In comparison, DOGE has “an infinite supply” soon after it had switched to providing an uncapped supply once it hit a supply limit of 100 billion coins in between 2015.
Industry figures, including Ripple’s CEO, Brad Garlinghouse, have criticized Doge for its alleged “inflationary dynamics” and unlimited supply.
Despite Musk’s criticism of Bitcoin as a payment tool, his firm Tesla had briefly adopted Bitcoin as a payment method earlier in 2021. The official reason for dropping the Bitcoin payments option was the company’s concerns regarding the “rapidly increasing usage of fossil fuels” which are used for Bitcoin mining and transactions.
Tesla continues to hold a significant amount of Bitcoin on its balance sheet after it had purchased $1.5 billion in Bitcoin in February 2021.
A number of global companies, such as Twitter, have been actively adopting Bitcoin as a payment option by the implementation of the Lightning Network for decreasing transaction costs.
Dogecoin at present doesn’t appear to have a much bigger transactional volume than that of Bitcoin, according to on-chain data.
At the time of writing this news publication, Bitcoin’s daily transaction volume had amounted to $31 billion, or 3.5 per cent of its market capitalization, as per data collected from CoinGecko.
Dogecoin’s daily transactions were worth $970 million, or 4.6 per cent of its market cap.
DOGECOIN has emerged as one of the most well performing cryptocurrencies in 2021, much of which is attributed to Elon Musk’s active endorsement of the meme-based cryptocurrency on social media.