Elon Musk Explains DOGE Edge Over Bitcoin, But Where Is He Wrong?
December 29 2021 - 12:00PM
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In an interview for the Lex Fridman Podcast, CEO at Tesla Elon Musk
talked about Dogecoin (DOGE), Bitcoin, Web 3, smart contracts and
more. Musk has been more involved with the crypto space in 2021,
but most of his takes have sparked debate and controversy. Related
Reading | DOGE Plunges 9% As Creator Reveals How Much He Holds
In This Cryptocurrency When asked about his preferences of DOGE
over Bitcoin, Musk claimed that “even though” the former was
created as a joke it is superior to BTC on transaction volume, and
capability. In his view, the meme coin is also cost-efficient
versus the “high price” users need to pay for using the Bitcoin
network. Moreover, the Tesla executive believes Bitcoin has been
unable to adapt to current times where “better internet
connections” make long synchronization times and “small” block size
obsolete. He referred to these Bitcoin attributes as “comic” and
added the following addressing one of this cryptocurrency’s main
features, its fixed supply: I think there is some value to having a
lineal increase in the amount of currency that is generated (…). If
a currency is too deflationary, if a currency is expected to
increase its value over time there is reluctant to spend it (…)
Musk’s replies were full of gaps for some users that took the time
to demonstrate the counter argument in the Bitcoin versus DOGE
debate. Vijay Boyapati, author of “The Bullish Case for Bitcoin”,
took to Twitter for this task and to point out the mistake made by
the Tesla executive. Talking about the block size for Dogecoin,
Boyapati said that although it is in fact larger than Bitcoin, the
latter has “orders of magnitude more transactional throughput” via
the second layer solution Lightning Network. Historically, the BTC
community has opposed any change to the network’s block size. This
is due to the numbers of issues that could altered the network and
even threatened its existence. In that sense, Boyapati said:
Scaling at the blockchain layer is fundamentally flawed as it
crucially undermines decentralization and protocol immutability.
What Elon Musk Missed On The Bitcoin v. DOGE Debate Boyapati
referred to Musk’s other reasons to support Dogecoin over Bitcoin.
Addressing DOGE’s low transaction cost, Boyapati claims it’s due to
the low network usage and not due to a superior design. Something
similar happens to Bitcoin network fees. In times of bullish price
action, the Bitcoin network’s fees usually tend to follow the
price. The opposite happens in extend periods of downtrend. In
fact, the first half of 2021 saw transactions fees of over 50
sats/vB in opposition to todays 11 sat/vB, according to
Mempool.space. Boyapati hit the nail on the BTC monetary policy and
block size, as he claimed developers would become “central bankers”
if they are able to alter these characteristics. Bitcoin has
surpassed the $1 trillion in market cap and worldwide adoption
because people can verify its immutability, Boyapati added: The
problem here is that Elon believes money must first and foremost be
a medium of exchange. Rather, money always evolves through stages
where it first becomes a store of value THEN subsequently a medium
of exchange. Related Reading | Tesla To Accept Dogecoin For
Merchandise, Token Soars 30% As of press time, BTC trades at
$47,940 with a 2.4% loss in the past day.
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