Dogecoin vs Bitcoin: The Key Differences and Which One You Should Buy
Both Bitcoin and Dogecoin are cryptocurrencies which means they are digital currency operated on an open-source (open cryptographic protocol) blockchain network.
However, this is where the similarity ends. While Bitcoin has enjoyed mass adoption with its fair share of media attention, Dogecoin has still yet to enter the space of mainstream media.
Understanding Dogecoin and Bitcoin
Dogecoin was created to have a “fun, friendly” image—one that wouldn’t scare away new users. It was meant to be something more for less, with lower transaction fees and simpler software.
With Dogecoin having a simplistic design it can be mined with any regular CPU which makes it more accessible to miners on lower computers.
Bitcoin holds the reputation of being the best cryptocurrency in the world. It is not perfectly smooth, but still has strong fundamentals to support it.
The robustness of bitcoin will give you confidence that you are holding an investment that has more of a chance of increasing in value over time than any other asset on earth.
What is Dogecoin?
Dogecoin is a decentralized, peer-to-peer digital currency that enables you to easily send money online. Think of it as “the internet currency.”
It’s a fun and friendly way to pay for goods and services, or simply spread the love on the Internet.
It was created by Billy Markus from Portland, Oregon, who hoped to create a fun cryptocurrency that could reach a broader demographic than bitcoin.
Initially introduced as “joke currency” on 6 December 2013, it quickly developed its own online community and reached a capitalization of US$60 million in January 2014. As of June 2017, the capitalization is $340 million.
The Meteoric Growth of Dogecoin
By March 2014, the market capitalization of Dogecoin had grown to $60 million, and transactions totaling 276 million Dogecoins were made daily. By 2017 the value of Dogecoin began to decline, and in June it has a market capitalization of US$45 million.
In January 2014, Dogecoin briefly surpassed the market cap of $2 billion. In 2014, Dogecoin drew media attention for its use in social-cause fundraising and for raising funds to sponsor a NASCAR driver.
How Dogecoin Works
Dogecoin makes it easy for users to send funds to other people, or make transactions online. The cryptocurrency uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network.
Dogecoin features include Multiplatform client applications, Intuitive Wallet for sending, receiving, and storing Dogecoin, Secure Wallet for highly advanced encryption, plus encrypted messaging.
With an average transaction confirmation time of 1 minute, the Dogecoin blockchain network is significantly faster than other digital asset networks. It’s far less complex than bitcoin’s, which can take up to 10 minutes for a single confirmation.
Characteristics of Dogecoin
While there’s a limit to the number of Dogecoin that can be created, this digital currency is inflationary, meaning the number of coins in circulation rises over time. The number of new coins added to the system grows by a predetermined amount on a set schedule.
Additional coins can be added to the system at the rate of 5,000,000 DOGE per minute. Blockchain technology ensures that all transactions are secure and anonymous.
The Dogecoin blockchain is based on the Litecoin codebase, with Dogecoin transactions taking place in much the same way as Bitcoin transactions.
Upon completion, all confirmed transactions are recorded in what is known as a “block.” Blocks are then added to older blocks to increase network security and prevent fraud.
Difference Between Dogecoin And Bitcoin
Dogecoin is inflationary. Just like the coins in your pocket are gradually losing value because new ones are being printed all the time, so too with Dogecoin.
The difference, of course, is that printing more bitcoin makes it harder to mine new bitcoins, whereas with Dogecoin there is no mining involved. Therefore, Bitcoin has an in-built scarcity.
Bitcoin, on the other hand, has a finite supply of 21 million, which creates a “built-in scarcity … akin to the way that gold or diamonds are valuable because they are scarce.”
This scarcity is central to why bitcoin bulls argue for holding the cryptocurrency long-term – because it is limited, as demand increases, the price of bitcoin should as well.
For instance, in October 2015, venture capitalist Chamath Palihapitiya said that the value of bitcoins could grow to $400,000 (its current price is under $7,000).
Similarly, John Matonis, one of the “founding fathers” of bitcoin has said that the cryptocurrency would hit $1 million within 20 years. Matonis told CNBC earlier this year.
Also Read: Everything You Need to Know About NFT
Though both bitcoin and dogecoin entered the market at the same time, there is little transfer of value between them. Unlike bitcoin—which has a highly valuable and highly secure ecosystem—dogecoin is merely a currency built on top of bitcoin.
Bitcoin vs. Dogecoin: Mining and Transactions
Bitcoin mining is a very high maintenance task that requires costly investments. It not only involves high electricity power or powerful computers but also takes a long time to find a new block.
Dogecoin, on the other hand, claims to achieve the same network consensus every 60 seconds.
Bitcoin and Dogecoin mining is very different and Bitcoin miners use specialized Bitcoin mining hardware and software.
Bitcoin cloud mining is easier, less risky, and can provide a private Bitcoin address associated with your account so that you can begin Bitcoin mining immediately.
Dogecoin vs. Bitcoin: Investment Risk
Put aside all factors, if there is one factor common in both that is the volatility of coins. They are so volatile that you cannot be sure when their value is going to rise and when the prices will drop. That makes them investing in both a risky choice.
Dogecoin currently stands as a safe option because of the small investments required to mine or purchase assets.
As an investor, you should not expect Doge to reach the same level in value as Bitcoin in the near future.
Doge is expected to reach a value of $1 and become a highly usable and distributed asset in the market, according to hints from Musk.
What Should You Buy: Dogecoin Or Bitcoin?
The most important reason to invest in Dogecoin is the price stability, which fell miserably.
Bitcoin value is now considered much more stable than before which will indeed increase the trust of investors in the crypto market. The price of bitcoin is relatively more stable than Dogecoin.
How to Buy Dogecoin
After creating an account with a cryptocurrency exchange, you can use your new account to buy virtual currency in a handful of different ways.
Most exchanges offer a “buy/sell” option, where buyers and sellers use the exchange platform to exchange fiat currency (i.e. U.S. dollars or Euros) for a proprietary form of cryptocurrency (i.e. Bitcoin(BTC) or Ether(ETH)).
This is one of the easiest methods to buy Dogecoin – all you need to do is connect your bank account, deposit money into your exchange account and then exchange that money for cryptocurrency with another member of the exchange.