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Dogecoin is better than Bitcoin for payments, Elon Musk declares

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Elon Musk, the CEO of Tesla, argues that Bitcoin (BTC) isn’t as good for everyday payments as Dogecoin, a meme-based cryptocurrency (DOGE).

In an interview held by Time magazine shortly after being chosen Time’s Person of the Year for 2021, Musk set a comparison between the world’s largest cryptocurrency, Bitcoin, to DOGE.

“Bitcoin isn’t an appropriate transactional cash substitute”. Despite its origins as a joke, Dogecoin is a better option for transactions. Dogecoin’s entire transaction flow, such as transactions per day, has a considerably bigger potential than Bitcoin,” Musk stated.

Tesla CEO Elon Musk stated that Bitcoin is a better haven as a store of value. Which is why investors prefer to hoard it rather than sell it or use it for transactions. “Bitcoin’s transaction volume is modest, and the cost per transaction is expensive,” Musk pointed out.

Musk, on the other hand, warned that Dogecoin isn’t a great store of wealth, saying that the cryptocurrency is “somewhat inflationary.” However, he claims that this “encourages people to spend rather than hoard as a store of value”.

Inflationary dynamics

Bitcoin, the most valuable cryptocurrency to date, created in 2009 as a “peer-to-peer electronic cash system”. With a limited total supply of 21 million bitcoins. DOGE, on the other hand, has an indefinite supply after reaching a supply limit of 100 billion coins in mid-2015.

Doge has been chastised by some industry insiders, including Ripple CEO Brad Garlinghouse, for its purported “inflationary dynamics” and limitless supply.

Despite Musk’s criticism of Bitcoin as a payment mechanism, his electric vehicle company Tesla did so briefly earlier this year. Concerns over the “rapidly expanding usage of fossil fuels for Bitcoin mining and transactions” cited as the official reason for the payment option’s removal. After purchasing $1.5 billion in Bitcoin in February, Tesla still has a considerable quantity of the cryptocurrency on its books.

Dogecoin does not have a much higher transaction volume than Bitcoin

Several big organisations, like Twitter, have actively adopted Bitcoin as a payment alternative by utilising the Lightning Network to reduce transaction costs.

On-chain statistics suggests that Dogecoin does not have a much higher transaction volume than Bitcoin. According to data from CoinGecko, Bitcoin’s daily transaction volume is $31 billion at the time of publishing. Or 3.5% of its market capitalisation. The daily transactions of Dogecoin are worth $970 million, or 4.6% of the cryptocurrency’s market capitalization.

In 2021, DOGE has become one of the best-performing cryptocurrencies, owing in part to Musk’s strong social media advocacy.

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