Although he previously stated that Dogecoin (DOGE) would be the cryptocurrency of Mars, Elon Musk, CEO of Tesla and SpaceX, seems to have backtracked a bit from his idea.
In an interview with a famous podcast presented by Lex Friedman, the billionaire explained that DOGE has some limitations that make its use on the red planet unfeasible.
Dogecoin better than BTC as a currency, but cannot be the cryptocurrency of Mars
According to Musk, there are synchronicity issues. Therefore, Mars would need to have a digital currency “independent” of planet Earth:
“Well, I think the Mars will need to have a different coin because you can’t sync due to the speed of light… Mars, on the closest approach, is about four light minutes away. Then, on the farthest approach, it’s about 20 light minutes away, or maybe a little more. So, you can’t really have something syncing… If you have a 20-minute speed of light issue, if it has a one-minute blockchain, it won’t sync properly.”
Despite this, he reinforced that the planet must have its own cryptocurrency. But that decision will be up to the Martians:
“I don’t know if Mars will have a cryptocurrency, but it probably will, and it will be some sort of thing located on Mars. I think cryptocurrencies are an interesting approach to reducing money mistakes.”
While noting that DOGE is not the ideal cryptocurrency for Mars, Elon Musk said later in the interview that Dogecoin is fundamentally better than other cryptocurrencies such as BTC.
On the BTC, in particular, he highlighted that the leading digital currency in market value has limitations on the volume of transactions. In addition, he highlighted that transaction processing time and fees charged are far from ideal.
In that sense, he said he saw BTC more as a store of value than a currency per se.
“I think Dogecoin has merit, even though it was created as a joke. It really has a much higher transaction volume capacity than BTC. And, you know, the low cost of making a transaction… the Dogecoin fee is pretty low. Now, if you want to make a transaction with BTC, the transaction cost is very high. So you couldn’t use it for most things and not even scale to a large volume.”