Elon Musk Tells TIME Magazine Why Dogecoin Is Better than Bitcoin for Payments

Musk says that although Bitcoin is a solid store of value to preserve wealth, it’s lousy as a payment solution.


On Dec. 13, TIME magazine named the CEO of Tesla/SpaceX — Elon Musk — as its 2021 Person of the Year. During a recorded interview with Musk that TIME posted to its Twitter channel as part of its Person of the Year announcement, the world’s richest person explained why he believes Dogecoin is better than Bitcoin in some regards.

Before we examine the self-proclaimed “DogeFather’s” fixation with meme tokens, we should first examine what money does. For fiat money and cryptocurrencies to be useful to us, there are three primary functions that cold hard cash or hot digital funds need to be able to address. It’s generally accepted that currencies address the following three functions:


  1. Unit of account: a comparative measuring stick for different goods or services.
  2. Medium of exchange: an accepted payment method for settling debts or acquiring goods.
  3. Store of value: inherent ability of a given asset to maintain its short- and long-term payment power.

With that as context, Elon Musk—who also co-founded PayPal—believes that Dogecoin is better than Bitcoin in at least one of those baseline currency criteria, as shared in these transcribed quotes from the Person of the Year interview.

“My understanding of the money system, at a fundamental level of how it actually works — the detailed mechanics of it — I think there are very few people who understand it better than me. Bitcoin is an interesting example and the prime mover on this [the crypto space], but the transaction volume of Bitcoin is low, and the cost per transaction is high. It is, at its base level, suitable as a store of value. But fundamentally, Bitcoin is not a good substitute for transactional currency.”

Musk’s Pro-DOGE Rationale

Musk believes that Dogecoin, rather than BTC, is ideally suited as a widely used method of exchange. 

“Even though it was created as a silly joke, Dogecoin is better suited for transactions. The total transaction flow — transactions per day — that you can do with Dogecoin has much higher potential than Bitcoin. It [Dogecoin] is slightly inflationary, but that inflationary number is a fixed number as opposed to a percentage, which means that over time, its percentage of inflation decreases. That’s actually good because it encourages people to spend it rather than hoard [Dogecoin] as a store of value.”


The Tesla organization holds the second-largest number of Bitcoin by a corporation, reportedly 38,300 coins. Earlier this year, Musk also flipped back and forth about whether Tesla would accept Bitcoin as payment for Tesla e-vehicles.

His initial rejection of Bitcoin payments sparked a 50% decline in that crypto. Ironically, his mercurial social media actions have hurt and helped Tesla’s Bitcoin holdings this year. Perhaps someone should tell the combo-world’s richest person and Person of the Year that silence is golden.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Tor Constantino

Tor Constantino is a former journalist, consultant and current corporate comms executive with an MBA degree and 25+ years of experience - writing about cryptocurrencies and blockchain since 2017. His writing has appeared across the web on Entrepreneur, Forbes, Fortune, CEOWorld and Yahoo!. Tor's views are his own and do not reflect those of his current employer.