• 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 is the 10th largest cryptocurrency by market cap at the time of writing, with market data showing a valuation of $20.6 billion and over $900 million worth of the coin have been traded in the past 24 hours.

Dogecoin encourages people to spend

While some may dismiss DOGE as a joke because it was created in a joke, Musk, Mark Cuban and other celebrities have invested in it alongside other top crypto assets.

The CEO of SpaceX, said Monday that Dogecoin is better than Bitcoin in terms of ease-of-use as a transactional cryptocurrency.

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 said:

” Even though it was created as an absurd joke, Dogecoin has proven to be more suitable for transactions.” he said before explaining why.

Musk points out that Dogecoin is more profitable than Bitcoin in terms of 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.”

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

Musk also said that cryptocurrencies were like fiat currency, and that while he doesn’t hate them, crypto has its advantages over fiat currencies.

He said that crypto is better than fiat currency because it tends to be diluted by government and that, in most cases holding fiat can become a “pernicious” tax when money supply has been diluted.