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Elon Musk, the CEO of Tesla and SpaceX, has had a massive impact on the cryptocurrency industry in 2021. Musk has been teasing the crypto community with an occasional tweet mentioning Bitcoin, Ethereum, and Dogecoin for years. However, in 2021, he allowed himself to get a lot more involved with the crypto industry, which eventually led to Dogecoin skyrocketing and becoming one of the largest coins by market cap, and one of the best performers of the first half of 2021.
Of course, Musk’s influence over DOGE was not the only thing that fueled the coin’s success this year, and while his contribution is quite important and big — potentially being the spark that started it all — he is only one of many contributing factors that sent DOGE sky-high. One thing that many in the crypto world have been wondering for a long time now is why exactly did Musk choose DOGE over Bitcoin?
Dogecoin: The People’s Coin
Musk made an appearance in a Lex Fridman Podcast #252, and he talked about a wide range of topics — from SpaceX and human spaceflight to starships, his thinking process and the concept of humans on Mars, Mars colonization and forms of government on another planet, wormholes, Tesla’s electric and self-driving cars, and, of course, cryptocurrencies.
During the cryptocurrency discussion, he mentioned that he views Dogecoin as the people’s coin, which could be one of the greatest reasons why he likes it so much. This has led Musk to include DOGE in many different aspects of his business and plans for the future, including going to space and putting Dogecoin on the moon.
When asked whether he would use DOGE as the official currency of a society built on Mars, he confirmed that Mars would definitely need to have its own currency, as it would be impossible to synchronize its currency with any Earth-bound system due to the great distance between the planets, and the limitations imposed by the speed of light.
He then mentioned that he sees crypto as a good approach to “reducing the error in the database that is called money.”
Bitcoin vs Dogecoin in the eyes of Elon Musk
Speaking about why he actually believes that there is merit to Dogecoin, even though it was created as a joke, Musk said that it actually does have a much higher transaction volume capability than BTC. In addition to that, the cost of transactions is significantly lower.
Musk also pointed out that the internet connections have come a long way between 2009 when Bitcoin was launched and 2013 when DOGE came out. The internet simply wasn’t as good back in 2008/2009, so long synchronization time and small block sizes made sense back then.
However, it has been 13 years since Bitcoin’s launch, and today, this is “comically low.” He also believes that Bitcoin is not the best cryptocurrency for making payments, and that one of its best features is also one of the worst ones. Essentially, the value of BTC is expected to increase over time, due to an increase in awareness and usage, and limited supply. However, if the value of the coin will grow, and everyone knows it, then there is a reluctance to spend it.
Dogecoin, on the other hand, doesn’t have a cap, and it can be mined indefinitely. As such, it actually encourages people to use it right now. And, while he does not suggest that this is the ideal situation for a currency to be in, he still believes that it is better than Bitcoin.
To learn more about this token visit our Investing in Dogecoin guide.