Dogecoin vs. Bitcoin: Key Differences
Cryptocurrency is often a controversial topic and has been since it’s inception. Two of the most popular cryptocurrencies remain Bitcoin and Dogecoin. Introduced in 2009, Bitcoin was the first form of cryptocurrency and takes the majority of the limelight with regards to cryptocurrency news and discussions. Dogecoin has been around since 2013, and although it wasn’t taken seriously at first, it has managed to gain an increased following over recent years. Despite both Bitcoin and Dogecoin being amongst the top-rated digital currencies, there are many differences between them, which we shall explore in the following article.
Overview
Cryptocurrency is a digital or virtual currency that is secured by cryptography, meaning it is nearly impossible to counterfeit or double-spend. Both Bitcoin and Dogecoin are digital currencies that are built around the concept of a decentralized, distributed ledger, or blockchain as it is commonly known. Despite both Bitcoin and Dogecoin being some of the most popular and well-known cryptocurrencies, there are many differences between the two that are worth noting.
History
Bitcoin was the first ever cryptocurrency, launched in 2009. It was created by an unknown person or group of people going by the name of ‘Satoshi Nakamoto’, and the concept of cryptocurrency was revolutionary at the time. On the other hand, Dogecoin was created in 2013 and was initially introduced as a joke. It was inspired by an internet meme, which featured an adorable Shiba Inu dog. Dogecoin caught on and gained more traction, becoming a popular cryptocurrency amongst traders.
Purpose
Bitcoin is developed with the purpose of becoming a new form of currency, one that is independent of governments and central banks. Bitcoin is used in many ways, such as a money remittance service or could be used to buy goods online. Dogecoin, on the other hand, is made as a ‘tipping’ currency. It was made to enable small payments online, allowing users to tip others online or give donations.
Supply
The total supply of Bitcoin is limited to 21 million. This means that no more than 21 million Bitcoin will ever exist, making it rarer than gold. Due to its limited supply, the value of Bitcoin is expected to increase with time. On the other hand, Dogecoin has no limit to its total supply, meaning it is considered to be an inflationary currency.
Price
The price of Bitcoin is very volatile and can move drastically from one day to the next. At the time of writing, Bitcoin’s price is $37,937.68. On the other hand, Dogecoin is seen as a much more ‘stable’ cryptocurrency, with its price at $0.349794 at the time of writing.
Mining
Mining is the process of verifying and adding transactions to the public ledger and is also the way Bitcoins and Dogecoins are created. Bitcoin mining is far more difficult and requires a significant amount of energy. This is because Bitcoin uses a proof-of-work algorithm, which requires miners to solve complex mathematical problems in order to be rewarded with Bitcoin. Dogecoin, on the other hand, uses a proof-of-stake algorithm, which makes mining much easier compared to Bitcoin.
Transaction Fees
As Bitcoin is a more well-known cryptocurrency, the network of Bitcoin is more congested compared to Dogecoin. This is because there are far more Bitcoin users than Dogecoin users, and thus the demand to use the Bitcoin network increases. As a result of this, transaction fees are higher for Bitcoin compared to Dogecoin.
Both Bitcoin and Dogecoin have earned a great reputation over the years but there are still some key differences between them. Bitcoin was introduced as the first ever cryptocurrency, with the primary purpose of becoming a new form of currency and is used in many ways. Dogecoin, on the other hand, is made as a ‘tipping’ currency, made to enable small payments and allow users to donate to others. The total supply of Bitcoin is limited to 21 million, and due to its limited supply, the value of Bitcoin is expected to increase with time. Dogecoin does not have a limit to its total supply, and its price and network are more stable compared to Bitcoin. Lastly, mining for both Bitcoin and Dogecoin are different, with Bitcoin having a higher difficulty level compared to Dogecoin.
As cryptocurrencies gain immense popularity, the understanding of their differences becomes more and more important. By comparison, we can see that the two of the most popular cryptocurrencies, Bitcoin and Dogecoin, have distinct qualities. Ultimately, the decision of which will be the better investment option is created by individual needs and preferences. So, if a person is looking for a long-term asset, then Bitcoin is the right choice. On the other hand, if someone is looking for a tipping or donation service, then Dogecoin might be the right fit.