Analysis

Elon Musk Explains DOGE Edge Over Bitcoin, But Where Is He Wrong?

In an interview for the Lex Fridman Podcast, CEO at Tesla Elon Musk talked about Dogecoin (DOGE), Bitcoin, Web 3, sensible contracts and extra. Musk has been extra concerned with the crypto area in 2021, however 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 requested about his preferences of DOGE over Bitcoin, Musk claimed that “even though” the previous was created as a joke it’s superior to BTC on transaction quantity, and functionality. In his view, the meme coin can be cost-efficient versus the “high price” customers have to pay for utilizing the Bitcoin community.

Moreover, the Tesla govt believes Bitcoin has been unable to adapt to present occasions the place “better internet connections” make lengthy synchronization occasions and “small” block dimension out of date. He referred to those Bitcoin attributes as “comic” and added the next addressing considered one of this cryptocurrency’s fundamental options, its fastened provide:

I believe there’s some worth to having a lineal improve within the quantity of foreign money that’s generated (…). If a foreign money is just too deflationary, if a foreign money is predicted to extend its worth over time there’s reluctant to spend it (…)

Musk’s replies had been filled with gaps for some customers that took the time to reveal the counter argument within the Bitcoin versus DOGE debate. Vijay Boyapati, writer of “The Bullish Case for Bitcoin”, took to Twitter for this process and to level out the error made by the Tesla govt.

Talking in regards to the block dimension for Dogecoin, Boyapati mentioned that though it’s the truth is bigger than Bitcoin, the latter has “orders of magnitude more transactional throughput” by way of the second layer answer Lightning Network. Historically, the BTC neighborhood has opposed any change to the community’s block dimension.

This is because of the numbers of points that might altered the community and even threatened its existence. In that sense, Boyapati said:

Scaling on the blockchain layer is essentially flawed because it crucially undermines decentralization and protocol immutability.

What Elon Musk Missed On The Bitcoin v. DOGE Debate

Boyapati referred to Musk’s different causes to help Dogecoin over Bitcoin. Addressing DOGE’s low transaction price, Boyapati claims it’s because of the low community utilization and never on account of a superior design. Something related occurs to Bitcoin community charges.

In occasions of bullish price motion, the Bitcoin community’s charges often are likely to observe the price. The reverse occurs in lengthen intervals of downtrend. In truth, the primary half of 2021 noticed transactions charges of over 50 sats/vB in opposition to todays 11 sat/vB, according to Mempool.area.

Bitcoin BTC BTCUSD Doge dogeusdt elon musk
BTC Transaction charges for the previous 6 months. Source: Mempool Explorer

Boyapati hit the nail on the BTC financial coverage and block dimension, as he claimed builders would develop into “central bankers” if they’re able to alter these traits. Bitcoin has surpassed the $1 trillion in market cap and worldwide adoption as a result of individuals can confirm its immutability, Boyapati added:

The drawback right here is that Elon believes cash should at the start be a medium of alternate. Rather, cash at all times evolves by way of levels the place it first turns into a retailer of worth THEN subsequently a medium of alternate.

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 up to now day.

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BTC developments to the draw back within the 4-hour chart. Source: BTCUSD Tradingview

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