Musk continues to show his support for Doge as time goes by. This time, the billionaire has opined that Bitcoin and Ethereum transactions layers are too slow. Comparing this with the speed of Doge, Musk explained that the cost of transactions remains too high.
It is true that bitcoin and ethereum confirmation times become quite slow when traffic is high. This leads to even higher fees where sometimes transaction fees can be more than the transacted amount.
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This is usually the case with small transactions in a bull market. This is something that ethereum hopes to overcome in moving to ETH 2.0.
There Is Merit To Doge
Elon Musk explained his reasoning behind saying BTC and ETH are slow. Noting that while both protocols continue to pursue multilayer transaction systems, their base layer remains slow. Adding that fees cost too much in their base layer.
BTC & ETH are pursuing a multilayer transaction system, but base layer transaction rate is slow & transaction cost is high.
There is merit imo to Doge maximizing base layer transaction rate & minimizing transaction cost with exchanges acting as the de facto secondary layer.
— Elon Musk (@elonmusk) July 9, 2021
This lead to the comment of there being merit to Doge. Musk explained this was because Doge maximized base layer transactions. And so, it minuses transaction costs by using exchanges as the de facto second layer.
There is truth to what Musk points out. Obviously, the transaction fees associated with BTC and ETH have been a pain point for a long time.
Dogecoin posts recovery as Musk tweets support for the coin | Source: DOGEUSD on TradingView.com
According to BitInfoCharts, the average Dogecoin transaction fee sits at $0.454. The average bitcoin transaction fee is $4.14. While for ethereum, the average transaction fee is currently $5.5.
The differences in the transaction fees are glaring. With the average fee for bitcoin being almost 10 times that of Dogecoin. And that of ethereum is more than 10 times the average fee for Doge.
Price Movements With Musk’s Comments
The tweet was meant with much optimism from the Doge community. The coin which has been taking massive hits since the crypto bloodbath began saw a significant boost in the price of the coin.
Doge which had fallen below the $0.20 threshold saw a bounce back in the hours following Musk’s tweet. The rebound pushed the coin price back up over the $0.20 price point. And now the coin is trading a little above $0.22 at the time of this writing.
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Elon Musk might no longer hold as much sway over the price of Doge as he used to. But there is no doubt that the billionaire still has some power left to influence the market.
Musk’s tweet was in reply to a tweet from Matt Wallace. Wallace is a famous crypto and Doge YouTuber and remains a staunch supporter of the coin.
The tweet which is only 2 hours old has garnered over 10K likes on Twitter. And so far, it has successfully pushed the price of Doge up by at least 5 percent.
Featured image from TheNationRoar, chart from TradingView.com