It has been quite a year for SpaceX founder Elon Musk. There were few days when his amusing (sometimes controversial) initiatives, remarks, or Tweets didn’t make headlines. Rightly so, he was named Time magazine’s Person of the Year.
In a recent interview with Time, Elon Musk reveals his disposition to dogecoin again, claiming that it is “better suited for transactions”.
— TIME (@TIME) December 13, 2021
Bitcoin is not a substitute for transactional currency
“The transaction volume of bitcoin is low and the cost per transaction is high. It is, at least at a space level, suitable for maybe a store of value. But fundamentally, bitcoin is not a good substitute for transactional currency,” he says.
He goes on to add that “even though it was created as a silly joke, the total transaction flow for dogecoin has much higher potential than bitcoin. It is slightly inflationary, but that inflationary number is a fixed number as opposed to a percentage. That means over time the percentage of inflation actually decreases”.
And why is that a good thing? It encourages people to spend rather than hold it as an investment.
Musk’s pro-stance towards cryptocurrencies is not a secret. Earlier this year, Tesla had disclosed a bitcoin purchase worth $1.5 billion in an SEC filing. However, he is “not a huge hater of fiat currency like many in the crypto world are”.
“There are advantages with crypto relative to fiat in that fiat currency tends to get diluted by whatever government it is. It ends up being a pernicious tax on people, especially those who have cash savings with dilution of the money supply,” he says.