Cryptocurrencies Are Not Perfect But Are Better Than Anything Else We Have Seen

Tesla’s CEO – Elon Musk – opined that digital assets could reduce the error in the money database. In his view, cryptocurrencies are not ideal, but they are “fundamentally better” than any other financial product.

The entrepreneur once again claimed that Bitcoin’s main use case is a store of wealth, while Dogecoin is better suited for payments.

Nothing Better Than Crypto so Far

During a recent interview with Lex Fridman, one of the most influential individuals in the cryptocurrency space – Elon Musk – reiterated his support towards the digital asset industry. According to him, the current financial system based on fiat currencies is far from perfect since the governments can “dilute the money supply” with their mass printing and cause inflation.

On the other hand, cryptocurrencies are a technological innovation that “takes us into the 21st century.” Unlike many people who characterize money as having power, Musk believes it should be viewed “through the lens of information theory.” He opined that the technology behind cryptocurrencies seems like the most effective form of transactions:

“Think of money as a database for resource allocation across time and space. In what form should that data system be most effective.”

However, the business magnate disagreed with the statement that bitcoin and the alternative coins are “ideal.” They are simply the best form of finance that has occurred until now:

“I’m not saying that it is the ideal system for a currency, but I think it actually is just fundamentally better than anything else I’ve seen.”

‘I Am Not Satoshi’

Musk once again rejected the theory that he is the anonymous creator of Bitcoin. According to him, Nick Szabo – a computer scientist and a cryptographer known for his research in digital currencies – is most likely to be that person:

“I don’t know who created bitcoin for practical purposes, but the evolution of ideas is pretty clear before that, and it seems like Nick Szabo is probably more than anyone else responsible for the evolution of those ideas.”

In any case, Tesla’s CEO opined that the creator’s name is not that important as the technology they invented. Not long ago, Dr. Saifedean Ammous opined somewhat similarly:

“You use the wheel every day, but you don’t know who invented the wheel, and we use a lot of things every day not because we trust the guy who invented them but because they have a proven track record,” he said.

Bitcoin Vs. Dogecoin

Subsequently, the entrepreneur compared two of the most popular cryptocurrencies – Bitcoin (BTC) and Dogecoin (DOGE). Despite being created as a joke, the latter has some merits over the former, Musk claimed:

“It does have much higher transaction volume capability than Bitcoin. The cost of doing a transaction (the Dogecoin fee) is very low. If you want to do a Bitcoin transaction, the price of doing that transaction is very high, so you could not use it effectively for most things.”

At the same time, the primary cryptocurrency is a store of wealth. People want to hold it as most likely its value will increase in the future, Musk concluded.