The richest man in the world, Elon Musk, reiterates his support for Dogecoin, saying that it is better than Bitcoin as a currency.
Talking to Lex Friedman in a two-and-a-half-hour interview, the couple covered a number of topics, including the colonization of Mars, the nature of money, and the functionality of Tesla’s autopilot. But a prominent topic of conversation was Musk’s thoughts on the controversial meme coin.
While purists continue to criticize Dogecoin for its poor foundations, Musk is probably turning his weakest attribute into strength.
Problem with Dogecoin
2021 was a year of ups and downs for Dogecoin. Although its inception was marked by euphoria, as $ DOGE made an incredible 15,000% profit since the beginning of the year in May, what followed was less impressive.
The steady decline since then has led investors to look elsewhere. The price of $ DOGE fell from a high in May, finding support at $ 0.1573 on several occasions. But a decline in terms of getting any significant increase during this period.
Critics let’s say the reason comes down to the poor foundations of Dogecoin. These include the non-existence of the real world and the lack of development. But perhaps the primary criticism is his unlimited token supply, which some claim makes $ DOGE a depreciating asset.
According to Motley Fool, over 5 billion new DOGE tokens are minted each year.
“The prize for the block is shared every minute. That’s 600,000 new Dogecoins every hour, 14.4 million new tokens every day, and nearly 5.26 billion new Dogecoins being minted virtually every year.“
However, 2021 was also when the Dogecoin Foundation decided to get serious. With co-founders Billy Marcus and Vitalik Buterin as advisors, there are plans to improve development and use in the real world, namely as a payment token.
Why $ DOGE is better than $ BTC as money, says Musk
Commenting on Friedman why Dogecoin has merit over Bitcoin, Musk he said it has “a much larger volume of transactions than Bitcoin”.
Breaking this, Musk points to lower fees for Dogecoin transactions compared to the leading cryptocurrency. So, limiting the use of Bitcoin to value storage only, although Lightning Network proponents would disagree.
However, on the issue of unlimited token supply, Musk said that there is “some value” of a certain level of inflation because it encourages consumption. And so, it works better as a payment system – as the currency should.
“[On Bitcoin] If the currency is too deflationary, or, I would say, if the currency is expected to increase in value over time, there is a reluctance to spend. ”
Musk signed saying Dogecoin is not an ideal currency system, but it is still fundamentally better than anything else he has seen.
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