Elon Musk, SpaceX and Tesla boss, has supported Dogecoin since its inception, which is a cryptocurrency built on memes. He revealed that he had also invested in Ether and Bitcoin a few months ago.
Musk, a former Bitcoin fan, believes that Dogecoin is superior to Bitcoin and other cryptocurrency and is the best cryptocurrency for trading.
Bitcoin transactions are more expensive per transaction and have a lower transaction cost. It can be used as a value store at least on a geographic level. Musk however stated that Bitcoin is not fundamentally a replacement for transactional currencies.
According to the billionaire, Dogecoin’s origins as a joke coin are no longer relevant for transactions. He believes Dogecoin has a higher potential for gross transactions than Bitcoin.
Bitcoin supporters agree that Bitcoin is a store-of-value, but they also claim that it can be used to facilitate transactions. Supporters give the example El Salvador, which has legalized Bitcoin as a means of financial transaction.
Musk does not hate fiat currency but he stated cryptocurrencies offer more benefits.
Musk stated that the fiat currency is diluted according to the ruling governments. This dilution can be a tax on people and a destructive tax for those with substantial cash savings.
However, financial experts warn that crypto is risky and dangerous. They warn that crypto investments should only be made when one can afford to lose.
Musk stated that Dogecoin is inflationary but has a fixed number unlike Bitcoin. He said that it encourages people to spend, rather than hoard money as a source of value. He has recently replaced Jeff Bezos as the world’s richest person, replacing him as the founder of Amazon.