Tesla billionaire Elon Musk, who’s repeatedly backed dogecoin over bitcoin, ethereum and other cryptocurrencies in recent months, has again gone to bat for the meme-based cryptocurrency.
[Update: 07/10/21 05:20am EDT] Musk followed up his earlier tweets with further details of how he sees dogecoin eventually competing with the likes of payments giant Visa.
“Block size and frequency should steadily increase to match broadly available bandwidth,” Musk replied to a Tesla fan account asking whether dogecoin’s transactions per second would have to reach the speed of Visa “to be really useful.”
“It won’t need to reach Visa speed, as regulated exchanges will act as de facto second layer,” Musk wrote. “But the perfect should not be the enemy of the good—it is still good to increase base layer transaction speed and lower base layer transaction cost.”
Musk, the self-proclaimed technoking of Tesla who was once voted dogecoin’s CEO in a tongue-in-cheek Twitter poll, warned over limitations he sees with bitcoin and ethereum, branding them “slow” with “high” costs.
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“There is merit [in my opinion] to doge maximizing base layer transaction rate and minimizing transaction cost with exchanges acting as the de facto secondary layer,” Musk said via Twitter, replying to dogecoin investor and YouTuber Matt Wallace.
“[Bitcoin and ethereum] are pursuing a multilayer transaction system, but base layer transaction rate is slow and transaction cost is high,” Musk added.
It’s hoped that bitcoin, via its payments-focused lightning network and a recent upgrade called taproot, will be able to resolve some of its scaling issues, while ethereum, the second-largest cryptocurrency after bitcoin, is in the midst of a long-awaited upgrade that’s not expected to be completed for years.
Musk was replying to a tweet by Wallace that claimed “the dogecoin update is coming soon,” and that it “will position doge perfectly to become one of the most used currencies in the world.”
In May, Musk proposed a dogecoin upgrade that he claimed is “needed [for dogecoin] to become the currency of Earth” and beat bitcoin “hands down.”
The dogecoin price has surged this year, initially riding January’s meme stock wave, but subsequently developing a haphazard community somewhat led by Musk who envision it eventually competing with the likes of bitcoin and ethereum.
Musk, whose irreverent attitude to bitcoin and cryptocurrencies on Twitter has alienated much of the bitcoin community, has previously said all of his dogecoin related comments shouldn’t be taken seriously but has since ramped up his support of it—issuing calls for developer support and promising to put a “literal dogecoin on the literal moon” via his rocket company SpaceX.
Tesla continues to hold more than $1 billion worth of bitcoin it bought near the beginning of the year—though that investment is now thought to be underwater—but Musk has also indicated he personally holds dogecoin.
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The dogecoin price, up over 4,000% on this time last year, has fallen sharply in recent weeks as fickle investors on the lookout for the next hot digital asset have lost interest in dogecoin.
The price of dogecoin failed to move in the immediate aftermath of Musk’s latest doge tweet, a marked difference from earlier this year when Musk’s early morning and late night tweets regularly moved the market double-digit percentages.
Over the last month, the dogecoin price has lost some 30% with its sell-off accelerating this past week even as a new Tiger King-branded cryptocurrency added 1,000% due to support from the likes of Wallace who said last weekend he was buying the little-known token.