Cryptocurrencies have become an increasingly popular investment in recent years. But, while many people are excited about the potential of this asset class as a way to make a short-term profit or long-term gains, very few cryptocurrencies are actually currently used as currencies by most people engaged in everyday commercial transactions.
There’s one currency that could be an exception to that general rule, though. It’s called Dogecoin. And billionaire investor Mark Cuban has indicated that it’s the strongest of all of the cryptocurrencies in terms of its ability to be used as a medium of exchange.
Here’s why Cuban has said Dogecoin has solid potential as a currency, even if it isn’t necessarily his favorite of all crypto investments.
Dogecoin has more utility as a currency
Dogecoin was actually started as a joke or a meme, with the goal of bringing together the internet’s obsession with virtual coins and with dog-based memes. But, while the creators of the coin didn’t really intend for it to be taken seriously, Dogecoin has taken on a life of its own. And celebrity investor and Shark Tank alum Mark Cuban has some of the coins in his personal portfolio.
The biggest reason Cuban is bullish on Dogecoin is a simple one. “It’s a medium that can be used for the acquisition of goods and services,” Cuban told CNBC. He has also tweeted in the past that Dogecoin is the “one coin,” people are actually able to make use of for making purchases.
Cuban’s Dallas-based basketball team, the Mavericks, is one of those merchants accepting the meme-based virtual coins. The Mavericks accept Dogecoin as a method of payment for both tickets and merchandise. More than 20,000 Dogecoin transactions have been completed with the Mavericks, making it the largest Dogecoin merchant in the world.
Cuban has said its utility as a currency separates Dogecoin from other cryptocurrencies, such as Bitcoin. Because of the tendency of Bitcoin owners to hold their coins over the long term in hopes of seeing the coins appreciate in value, Cuban believes that Bitcoin is more of a “digital version of gold,” rather than a medium of exchange.
The Maverick’s owner isn’t alone in his belief in Dogecoin as a viable currency for business transactions, as Elon Musk — Tesla’s CEO and another crypto enthusiast — has also echoed these sentiments. Musk is a long-time fan of Dogecoin and is one of its biggest proponents of the cryptocurrency on social media. In response to Cuban’s emphasis on Dogecoin’s utility for making purchases, Musk tweeted out “I’ve been saying this for a while.”
Despite his optimism about Dogecoin as a viable currency, Cuban has admitted the coins have no intrinsic value and may not necessarily be the best investment. Still, if cryptocurrencies are to have a long-term future as an asset class, the widespread adoption of the coins as an actual currency that can be used for purchases could prove important. If Musk and Cuban are right, this feature of Dogecoin could give it an edge over other altcoins and even more mainstream currencies in terms of holding their value and experiencing continued growth.