When Satoshi Nakamoto released the Bitcoin (BTC) whitepaper in 2009, it sent shockwaves through the global financial system. According to the whitepaper, Bitcoin is a decentralized digital currency and it has attracted a large following in the hopes that it could one day replace the world’s existing financial systems. Bitcoin was and is a significant economic phenomenon, to the point where governments worldwide strive to find a way to control it.
Some people observed Bitcoin’s technology, the blockchain, and sought to use it for less extreme purposes despite the financial disruption it caused. Since the Bitcoin blockchain is open-source in every way, using it to develop other things was quite easy. Dogecoin (DOGE) was founded in 2013 by two software engineers, Jackson Palmer and Billy Markus, who took inspiration from Bitcoin’s ease of use. The article explains the differences between Dogecoin and Bitcoin.
Bitcoin and Dogecoin: A Brief Overview
Palmer developed Dogecoin as a combination of the Shiba Inu meme known as “Doge” and bitcoin. Later, Palmer tweeted about the concept, jokingly, but Markus caught wind of it and came up to help create Dogecoin.
Palmer and Markus anticipated that interest in their meme project would die soon after DOGE was released. Instead, the popularity of DOGE increased significantly due to Reddit’s user base. The DOGE subreddit was bustling with users exchanging DOGE, discussing cryptocurrency, and recruiting new members.
Many members of the cryptocurrency world still consider DOGE to be more of a meme than BTC. However, because DOGE is supported by major exchanges such as Coinbase and Robinhood, the general public is constantly exposed to the currency.
Dogecoin’s Similarities To Bitcoin
Since DOGE was created as a parody of Bitcoin and uses a significant portion of BTC’s source code, it is common for BTC and DOGE to have many similarities. For example, the BTC and DOGE blockchains use a proof-of-work (PoW) consensus technique that relies on a network of miners. Proof-of-work blockchains use “blocks” to organize their transaction histories. Once a block has enough data in it, a group of users known as miners will work to verify it.
For each block to be validated, miners must use powerful equipment to generate a unique 64-digit hexadecimal code. When the hexadecimal value is obtained, all of the transactions in that block are verified and added to the distributed ledger. Tokens of the network’s cryptocurrency are given as compensation for mining, increasing the token’s supply. Separate miners or mining pools are viable options on the BTC and DOGE networks.
Other than that, BTC and DOGE can be used as a medium of exchange and a means of storing wealth. Both assets might be accepted as payment by businesses and enterprises worldwide. However, the similarities between BTC and DOGE stop here. Despite Dogecoin’s origins as a joke, its creators, Markus and Palmer, have made significant modifications that set it apart from BTC.
Price Of Doge In Comparison To Bitcoin
While Markus and Palmer set the total quantity of DOGE at 100 billion, they later changed the cap to prevent people from treating it like an investment and hoarding it.
Investors have realized DOGE isn’t intended to be a store of value due to its endless supply capitalization. However, BTC has a fixed supply size of 21 million BTC, and many think this scarcity contributes to the asset’s value. You can trade both digital coins on http://bitindexai.top.
Theoretically, its price should increase as BTC supply decreases and its demand increases. Since Palmer and Markus did not want DOGE to become excessively valuable, they designed it without a supply capitalization and set the annual issuance rate at 5 billion. After all, the concept of DOGE was intended to be humorous.
Moreover, DOGE has a far higher transaction rate as compared to BTC. In contrast to Bitcoin’s 10 minutes per block, DOGE’s block confirmation time is just one minute. DOGE’s transaction completion time is about 33 TPS which is significantly higher than Bitcoin’s average of 7 TPS.
The price of dogecoin is also far less volatile than Bitcoin’s. Also, it is a known fact that the price of a bitcoin can fluctuate by several thousand dollars in a single day. Dogecoin’s price is similarly unstable, fluctuating between some pennies and dollars. Due to its lower volatility, Dogecoin is preferable to BTC for regular commerce.
Bitcoin’s Advantages Over Dogecoin
Dogecoin, a cryptocurrency based on Shiba Inu, has several advantages over Bitcoin. But, just like everything has its own drawbacks, so does dogecoin. There are significant technical advantages that Bitcoin enjoys over Dogecoin.
Bitcoin has a much higher market value than Dogecoin. The fact that Bitcoin is a more reliable long-term store of wealth than Dogecoin, even though the price difference between the two could be seen as positive or negative, is enough to explain why tens of thousands of individuals invest in Bitcoin and not Dogecoin.
Dogecoin may soon become obsolete because of developments in Bitcoin that may render it obsolete. The Lightning Network is the most anticipated Bitcoin’s planned enhancement because it will allow off-chain tunnels to facilitate smaller Bitcoin transactions, such as buying a cup of coffee.
Bitcoin is not nearly as much of a meme as Dogecoin is in the eyes of the general public. Institutional investors are unlikely to put significant cash into Dogecoin because of its meme history. Instead, value investors will likely favor Bitcoin, the cryptocurrency that has been profitable to own since its creation.
When a block of Dogecoin is mined, the miner is rewarded with 10,000 DOGE. In numerical terms, this implies that 10,000 Dogecoin are added to the network every minute, steadily reducing the currency’s value. Due to its fixed supply of 21 million tokens and decreasing pace of release, the value of Bitcoin is expected to rise steadily over time, much like that of gold. Extremely high long-term value is typically associated with things that are scarce and in high demand.
Both Bitcoin and Dogecoin have their own significant advantages and disadvantages. Dogecoin was initially started as a meme however, in no time its popularity has skyrocketed. The most significant drawback is that the highest value that Dogecoin has attained to date is much lower than what Bitcoin has attained. This is what makes it a less attractive choice in the eyes of investors.