The Tesla CEO is one of the biggest supporters of the meme-themed cryptocurrency, his tweets part of the reason DOGE’s popularity has skyrocketed over the past year amid increased interest from retail investors.

Elon Musk, named Time’s 2021 Person of the Year, has said Dogecoin is a better cryptocurrency than Bitcoin when used for buying things.

Dogecoin was the 10th most popular cryptocurrency in terms of market capital at the time this article was written. market dataThe coin has been traded over the last 24 hours, with a value of $20.6 billion.

Dogecoin encourages people spend

Although some may dismiss DOGE as a joke because it was founded in a joke, Musk, Mark Cuban and other famous people have invested in it alongside other top crypto assets.

Speaking to Time Magazine Monday, the CEO of SpaceX said that Dogecoin was better than Bitcoin for ease-of use as a transacting currency.

According to him, the top cryptocurrency, created in 2009 by Satoshi Nakamoto during a global financial crisis, is “fundamentally” unsuitable for small everyday transactions.

He told Time that Bitcoin, which is the world’s largest cryptocurrency by market cap, is “not a good substitute for transactional currency.” On the other hand, DOGE allows holders to easily spend their funds. He stated:

“Even though it was created as a silly joke, Dogecoin is better suited for transactions,” he added before going on to explain why this is the case.

Musk points out that Dogecoin can be more profitable than Bitcoin when it comes transaction volume and cost.

Whereas Bitcoin sees substantially low transaction volume in a day and costs much higher to spend, Dogecoin offers a much better prospect, encouraging holders to use their coins to buy goods and pay for services “rather than sort of hoard as a store of value.”

Tesla CEO explained that Bitcoin as it stands is better suited for use as a store value. This means that investors would rather keep it than transact or sell with it.

Musk also compared cryptocurrencies to fiat, saying that although he is not a “huge hater” of the latter, crypto had its own advantages relative to fiat currencies.

He pointed out that crypto was better because “fiat currency tends to get diluted by the government of the day and that in most cases, holding fiat becomes a “pernicious tax” whenever money supply is diluted.