Elon Musk, the CEO of Tesla, spoke about Dogecoin, Bitcoin, Web 3 smart contracts, and other topics in an interview with Lex Fridman podcast. Musk is more actively involved in cryptospace 2021 than he was previously, though most of his takeaways have provoked controversy.
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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.
It is because of the many issues that can affect the network or even threaten its existence. Boyapati is able to help in this regard. said:
The blockchain layer’s scaling is fundamentally flawed because it undermines both protocol immutability as well as decentralization.
Elon Musk’s Mistakes in 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. The same thing happens with Bitcoin network charges.
In times of bullish price action, the Bitcoin network’s fees usually tend to follow the price. In periods of prolonged downtrend, it is the reverse. According to Mempool.space, transactions fees were higher in the first half 2021 than they are today at 11 sats/vB.
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 is now worth $1 trillion and has gained worldwide acceptance because it can be verified as immutable, Boyapati said.
Elon is wrong to believe that money must be first and foremost a medium for exchange. Instead, money evolves through various stages. First it becomes a store-of-value and then later it becomes a medium to exchange.
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BTC is currently trading at $47.940, with a loss of 2.4% in the last day.