Elon Musk thinks that when it comes to transactions, it’s dogecoin over bitcoin. The CEO of electric vehicle trailblazer Tesla and space cargo company SpaceX is a long-time supporter of cryptocurrency.
For Daily Transactions, It’s Dogecoin Over Bitcoin
According to Musk, the advantage of dogecoin over bitcoin is apparent when conducting daily transactions. He told Time Magazine that fundamentally, Bitcoin won't serve as a good substitute for transactional currency.
In contrast, Dogecoin offered a better fit for transactions despite its origins as a joke currency. Time Magazine interviewed Musk after naming him Time’s 2021 Person of the Year.
Musk also said that dogecoin presents a more practical and less expensive way to complete transactions. ″The transaction volume of bitcoin is low, and the cost per transaction is high,” he said.
In contrast, dogecoin offers lower costs per transaction. Due to its high cost, bitcoin becomes more suitable as a cryptocurrency for storing value. This is the reason why investors prefer holding on to bitcoin instead of trading it or using it for transactions.
People Prefer Dogecoin Over Bitcoin When Spending
Meanwhile, Dogecoin remains the currency that “encourages people to spend, rather than sort of hoard as a store of value,” Musk said. He admits that Dogecoin is slightly inflationary.
However, the inflationary number is a fixed number and not a percentage. “That means over time its percentage actually decreases and that is actually good because it encourages people to spend and rather than hoard it as a store of value,” Musk said.
In contrast, Bitcoin users agree that the asset is primarily a store of value. However, its design serves other purposes. Bitcoin’s system makes it ideal for peer-to-peer transactions.
Experts cited situations like El Salvador, which declared bitcoin legal tender. On June 9, the Central American country officially adopted Bitcoin as legal tender after passing a supermajority vote in Congress.
El Salvador believes that legalizing Bitcoin can spur investment in the country. It can help roughly 70% of Salvadorans who don't have access to “traditional financial services.”
Bitcoin Versus Fiat
While Musk is overall bullish on cryptocurrency, he has strong doubts that it will eventually replace fiat currency. “I’m not a huge hater of fiat currency like many in the crypto world are,” Musk explained.
However, Musk acknowledges that cryptocurrency does have advantages, especially relative to fiat. “Fiat currency tends to get diluted by whatever government it is.
It ends up being a pernicious tax on people,” he said. This affects people, “especially those who have cash savings with dilution of the money supply,” Musk added.
This is why financial experts continue to hold the view that cryptocurrency remains a volatile, risky, and speculative investment. People who buy cryptocurrency should only invest what they can afford to lose.
Watch the Kyle Talks Money video discussing that Elon Musk still loves dogecoin over bitcoin:
Do you agree with Elon Musk that for everyday transactions, people prefer Dogecoin over Bitcoin? In addition, do you think that cryptocurrency has a bright future ahead?
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