Elon Musk, the world’s richest man and CEO of Tesla and SpaceX, has again expressed his preference for the Dogecoin (DOGE) over the Bitcoin (BTC).
Dogecoin vs Bitcoin
On Monday, Musk was named Person of the Year 2021 by The Time. Musk then said in a Times Magazine interview that he prefers Dogecoin over Bitcoin when it comes to transactions.
“Fundamentally, Bitcoin is not a good substitute for transaction currencies. Although the Dogecoin is originally a joke, Dogecoin is better suited for transactions. The transaction volume of Bitcoin is low and the cost per transaction is high.“
Musk has explained how the two digital assets capitalize on each other’s shortcomings. Bitcoin is more suitable as a store of value. This is why investors prefer to hold it rather than sell it or use it for trading purposes. Dogecoin, on the other hand, encourages people to spend instead of holding it.
The fact that Bitcoin is a store of value is something that its supporters strongly agree with. They also see the asset as a solid peer-to-peer financial system that can transact. In El Salvador’s, Bitcoin itself is legal tender.
It is important to note that Dogecoin has faster transaction confirmation times than Bitcoin. While Bitcoin has a block every ten minutes, Dogecoin has a block every minute. Transactions with Dogecoin are also relatively cheaper than transactions with Bitcoin.
The Bitcoin has a supply limit of 21 million, while Dogecoin’s supply is infinite. This makes storing Dogecoin quite difficult. Hoarders prefer assets that may be short in the market for value appreciation.
The difference between crypto and fiat
Musk claims, in spite of everything, that he is not a fiat critic as many crypto enthusiasts have become. He reports the following:
“I am not a fiat currency hater as many in the crypto world think.”
And while he remains a crypto bull, he still doubts the potential of digital assets to replace fiat currencies.
There are advantages of crypto over fiat. Fiat currencies tend to be diluted by any government. It eventually becomes a harmful burden on people, especially those who have saved cash from the dilution of the money supply.
In February, Musk revealed that he had bought Dogecoin for his son, X AE A-XII. Later in July, he said he has added Dogecoin to his portfolio, in addition to Bitcoin and Ethereum (ETH). In November, he talked about plans to open a university where fees would be paid in DOGE tokens and those with a dog would receive discounts.