Before defining the difference between Dogecoin and Bitcoin, it’s important to understand what cryptocurrency is and how it works. Cryptocurrency is all the rage nowadays. Many millionaires and billionaires are investing their money into this digital currency, especially millennials. In fact, 83% of millennial millionaires own some form of cryptocurrency.
Now to understand how cryptocurrencies differ, we have to start with the basics of crypto. Cryptocurrencies are an alternate form of currency that is created by using a specific encryption algorithm. A cryptocurrency can only be used if you have a cryptocurrency wallet. The “wallet” works by downloading a software that can be stored on your desktop or mobile device, or in the cloud. Cryptocurrencies are decentralized. There is no form of government control as most currencies today are. Instead, cryptocurrency works through blockchain.
The first cryptocurrency to come on the market was Bitcoin, back in 2009. Almost a decade and a half later, there are many other relevant cryptocurrencies, including Dogecoin.
Now to understand the difference between the two, let’s start with explaining what Bitcoin is. Bitcoin, being the first cryptocurrency was based on blockchain technology. Blockchain is a decentralized ledger of different transactions that are then multiplied or duplicated across the entire network of computers. In order to create new Bitcoins, there are very complex mathematical problems that Bitcoin “miners” have to be able to solve. These “miners” have to be incredibly powerful computer systems in order to create the said coin. This type of mining process requires the most energy in comparison to other cryptocurrencies.
Bitcoin is by far the most popular cryptocurrency in the world and has the largest market capitalization of all cryptos. As previously mentioned, it was launched back in 2009 by an unknown individual who used the pseudonym Satoshi Nakamoto. It is recognized by entrepreneurs, businesspeople, government officials, and more. People utilize BTC for payments involving large amounts of money. In 2021, it hit a record high of nearly $65,000 per coin.
One of Bitcoin’s properties is that over time, the supply decreases rather than increases. There is a limited supply on the market. With that being said, Bitcoin is considered the least risky as it is the most mature and more accepted as a form of payment. In terms of mining, however, Bitcoin requires the most energy.
While the framework of Dogecoin is almost entirely the same as Bitcoin, they are very different crypto coins. Dogecoin started off as a joke in 2013 by an IBM engineer named Billy Markus and an Adobe engineer named Jackson Palmer. The coin has been popularized by Elon Musk over the past few years and even trended on TikTok which resulted in a 600% price spike. DOGE was started as a fun way for anyone to learn about the world of crypto. Traded at a price of a small fraction of a penny, several online businesses now accept Dogecoin and people use it for educational purposes or as a hobby.
Unlike Bitcoin, Dogecoin has no market cap and is widely distributed, available, and affordable. The coin is able to inflate infinitely without being tied to anything. The one advantage that Dogecoin has over Bitcoin is that its blockchain processes transactions more quickly and for less money than Bitcoin’s transactions. Mining for Dogecoin may have similarities to mining for Bitcoin but it provides less value. Despite the market cap that Dogecoin has gained it is still just a meme coin.
Despite the pros and cons of each coin, there’s no definitive answer to which one is best. However, both are dominating the world of cryptocurrency and are here to stay. It’s important to pay attention to industry news and developments to decide on which to invest in.