The billionaire has issued warnings over the limitations and scalability issues he sees in Ethereum and Bitcoin, as he branded them “slow” with “high” costs.
Minimizing base layer transaction costs
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Musk reached out to Dogecoin Influencer Matt Wallace about Ethereum and Bitcoin’s pursuance of a multilayer transaction system. He also stated on Twitter that there is a benefit of using Dogecoin as a base layer blockchain. He reiterated on Twitter,
There is merit to doge maximizing base layer transaction rate and minimizing transaction cost.
Many players in the industry are expecting that Bitcoin’s payments-based Lighting network can solve some of the scaling issues. It is also hoped that the recent upgrade is known as “taproot” can also help the scaling issues of Ethereum, the second-largest crypto asset by market cap.
Increased support for DOGE
In May, the Dogecoin enthusiast gave his opinion about the Dogecoin upgrade, claiming that such is required for the token to become the “currency of the Earth.”
Dogecoin (DOGE/USD) has surged in price this year, partly due to Musk’s rally for the meme-based token.
Elon Musk asked to research Bitcoin’s scalability
Musk was initially in total support of Bitcoin and other cryptocurrencies. But his recent lack of support towards Bitcoin has sidelined much of the Bitcoin community. He initially said people should not take his Dogecoin comment seriously but has since increased his support for the cryptocurrency.
His recent outburst about Bitcoin and support for Dogecoin has received stiff responses from several crypto enthusiasts. Some are wondering how exchanges are required to act as a Layer 2 for Dogecoin. Some other have told Musk to find out more about the scalability solutions for both Ethereum and Bitcoin.
Although the Bitcoin blockchain tends to be expensive and slow, the Lightning network is designed to solve most of the scalability issues. Other Ethereum leading protocols have also set out plans to roll out Optimism and Arbitrum solutions to improve scalability.
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