Elon began actively sharing posts on Twitter about DOGE back at the beginning of last year. Those – along with Elon’s frequent laudatory comments – led to a surge in the coin’s price, its popularity and the emergence of a huge number of similar projects, including the relatively successful Shiba Inu coin.

In an interview, Musk also said that DOGE could be used to buy Tesla and SpaceX merchandise, as well as to make payments to The Boring Company, another billionaire’s company. In the latter case, the question is about paying for travel in tunnels in various U.S. cities. We wrote about it in a separate article. We recommend reading it to better understand the details of what’s happening in the blockchain world.

Tesla car

Why they love Dogecoin

The billionaire was a guest on the Full Send Podcast, in which he noted the high speed of transactions in DOGE compared to transfers in BTC. The average duration of a transaction in the altcoin network is 60 seconds, while it takes about 10 minutes to create one block in the Bitcoin network. According to Musk, this is enough for the meme coin to be considered a better payment system.

The fact that it has a very large community also helps. Here’s the billionaire’s cue.

Honestly, I mostly support DOGE because I think Dogecoin has memes, dogs, and seemingly a sense of humor by the community that keeps the project from being taken too seriously. Despite the fact that DOGE was conceived as a ridiculously hype currency, the altcoin’s actual overall throughput has been much higher than that of Bitcoin.


Note that high bandwidth is not a guarantee of good cryptocurrency. Sometimes, however, that characteristic is associated with a high level of centralisation, which is true for Tron and BNB Chain type networks. But Bitcoin is much more decentralised than Dogecoin, so to think that the latter is the best coin solely because of its ability to handle a large number of transactions is to misunderstand the characteristics of a good blockchain.

Note that Musk suggested back in May 2021 that Dogecoin's block size be increased along with its creation time. According to Ilon, this would significantly improve the cryptocurrency and make it more popular. However, as noted by the creator of Etherium Vitalik Buterin, such action would only make DOGE a more centralized project, because then there would be far fewer people to launch and maintain the node on the network.


Dogecoin exchange rate

That said, DOGE already has centralization risks. To illustrate, let’s look at the distribution of bitcoins at the richest addresses in the cryptocurrency network. Note that they predominantly have less than 1 percent of the total amount of BTC in circulation.

Bitcoin distribution among the richest addresses on the cryptocurrency network

And this is the case with Dogecoin. Here, one address has almost 30 percent of all DOGE, making the top ten addresses in the network account for almost 51 percent of the cryptocurrency. And that’s a dangerous situation for memcoin holders.

Distribution of DOGE among the richest addresses on the cryptocurrency network

The billionaire also stressed that the inflation factor of Dogecoin, which allows the creation of an additional 5 billion coins per year, is very appropriate for recognizing DOGE as a means of payment. Bitcoin, on the other hand, can only be called as such with difficulty, because the limit on the maximum BTC in circulation does not encourage coin spending. Here’s his rejoinder, cited by CryptoPotato.

The fact that we print five billion dollars every year is actually a good representation of the qualities of transactional currency.

Tesla CEO Ilon Musk

In other words, the 21 million BTC cap on the maximum amount of a major cryptocurrency encourages its holders not to sell bitcoins for as long as possible. The whole point is that the limited supply is highly likely to lead to an increase in price, which means it’s simply not profitable to spend BTC often.

Read also: Analysts report active use of Dogecoin by criminals and extremists. How big is the problem?

However, amid the decline of the crypto market, even some large companies are forced to spend their BTC to cover costs. Among them is mining firm Core Scientific. According to news outlet Decrypt, Core Scientific sold 1,975 BTC at an average price of $22,000 in July this year. The company’s total revenue from these transactions was $44 million. Most interestingly, Core Scientific only mined 1,221 BTC during the same time period, meaning its Bitcoin balance has shrunk.

Bitcoin network hashtray

Although a series of coin sales has seen the total number of bitcoins in Core Scientific’s possession drop, this is a relatively minor blow to its reserves compared to the previous month. Still, the company sold $7202 BTC worth $165 million in June to “boost liquidity” as the Bitcoin price fell below $30,000. During the same period of time, the company mined just 1,106 BTC.


We believe that such comments by Ilon Musk create a misconception of the cryptocurrency industry among his fans. In this case, one might think that the best blockchain would be the one that can handle a large number of transactions. This is only partly true, well, networks should also be judged on the number of validators or total hash rate, the so-called finality of transfers, the distribution of coins among the richest addresses, the cost of running a node and much more. Obviously, Musk, in his attempts to re-promote DOGE, simply did not take this into account.