Dogecoin vs. Bitcoin: Key differences

Dogecoin vs. Bitcoin: Key differences

What’s the difference between BTC and DOGE?

Satoshi Nakamoto shook the financial world in 2009 when he released the Bitcoin (BTC) whitepaper. Bitcoin’s whitepaper described it as a decentralized digital currency, and many people hoped it would eventually replace the world’s present financial systems. Bitcoin was and continues to be a significant problem in finance, so much so that global politicians are fighting to control it.

Despite Bitcoin’s financial turmoil, some saw its blockchain technology and desired to use it for less dramatic purposes. Because the Bitcoin blockchain is completely open-source, expanding on the concept was simple in principle.

In 2013, Jackson Palmer and Billy Markus, two software programmers, were inspired by the simplicity of Bitcoin and invented Dogecoin (DOGE), a meme cryptocurrency.

This essay will go over the Dogecoin vs. Bitcoin controversy in depth.

Palmer created Dogecoin by mixing the popular “Doge” Shiba Inu meme with a cryptocurrency. Palmer then tweeted about his idea, jokingly, but Markus spotted it and reached out to construct Dogecoin.

Markus created Dogecoin three hours after forking Lucky Coin, which is a fork of Bitcoin in its own right. Markus essentially built Dogecoin by cloning and modifying core portions of the source code of Bitcoin, Litecoin, and Lucky Coin before launching the project.

Palmer and Markus expected their meme effort to fail after a short amount of time when Dogecoin was launched. Instead, the Reddit social media network helped DOGE grow a sizable community. The Dogecoin subreddit was teeming with enthusiasts exchanging DOGE, discussing DOGE information, and welcoming newcomers to the DOGE community.

Elon Musk, the founder of Tesla, eventually became involved. In early 2021, Musk regularly tweeted about DOGE, suggesting he would send the asset to the moon. As a result of Musk’s post, the DOGE price skyrocketed as investors hurried to participate. It also sparked a flood of memes about DOGE, bringing the asset even more attention.

However, the Dogecoin network was hacked around Christmas in 2013. A hacker stole 11 million DOGE from DogeWallet, a third-party Dogecoin platform. Just two days later, the Dogecoin community generously donated 15 million DOGE to DogeWallet.

Many in the crypto world consider DOGE to be more of a meme than Bitcoin. Nonetheless, the general public is constantly exposed to DOGE because big exchanges such as Coinbase and Robinhood support the asset.

Because of the increased accessibility, traditional investors may be more inclined to invest in DOGE. Because of the rising popularity of DOGE, engineers are working on a scalability and security update that will be released in early 2022.

Similarities between Bitcoin and Dogecoin

Given that DOGE was created as a parody of Bitcoin and used a significant portion of Bitcoin’s source code, the two cryptocurrencies have a lot in common—so much so that a BTC vs. DOGE comparison isn’t impossible.

For starters, both Bitcoin and Dogecoin use a proof-of-work (PoW) consensus technique that requires miners. Transactions are stored in blocks on a proof-of-work blockchain. When a block is full, a group of devoted individuals known as miners sets out to validate it.

Miners use powerful hardware to find a unique 64-digit hexadecimal code for each block during block validation. When the hexadecimal code is discovered, the transactions included within that block are considered genuine, and the block is added to the blockchain. Miners are compensated in a network’s cryptocurrency for their efforts, releasing more of an asset into circulation. Miners on the Bitcoin and Dogecoin networks can work alone or collaboratively through a mining pool.

On the other hand, Bitcoin and Dogecoin can be used to store and transact value. Businesses and corporations worldwide may accept one or both assets as payment for goods and services. However, the parallels between Dogecoin and Bitcoin tend to end there. Despite the fact that Dogecoin was developed as a meme, Markus and Palmer performed some adjustments that distinguish Dogecoin and Bitcoin more than they look at at first glance.

BTC vs. DOGE comparison: Where Dogecoin improves upon Bitcoin

While Bitcoin and Dogecoin share a common core, the two cryptocurrencies are not interchangeable. There are numerous distinctions between Bitcoin and Dogecoin.

Bitcoin’s proof-of-work consensus process, for example, is based on the SHA-256 hash standard. The SHA-256 standard was developed by the United States National Security Agency (NSA) in 2001 and is widely regarded as a cutting-edge encryption technology.

Dogecoin, on the other hand, employs the Scrypt hash technology that Litecoin pioneered. The script makes bitcoin mining more accessible than on an SHA-256 network. Only the first miner to find a block hash on a proof-of-work blockchain network receives a reward.

Because the reward can only be earned by one miner, people with less powerful gear receive far less than organizations and individuals with thousands of dollars in hardware. Even yet, there are graphics cards designed specifically for PoW mining known as “application-specific integrated circuits” (ASIC). ASIC miners are more likely to obtain a reward than regular miners, further restricting novice miners.

The Script standard, on the other hand, is ASIC-resistant. Due to the lack of ASIC support, blockchain networks using Scrypt were introduced to ensure traditional mining hardware functions properly, making the mining process more accessible. Miners on the Dogecoin network are also jokingly referred to as “diggers.”

Bitcoin vs. Dogecoin: Bitcoin’s Positives

Despite its advantages over Bitcoin, the Shiba Inu-themed money is not without flaws. In terms of technology, Bitcoin still has some significant benefits over Dogecoin.

For starters, Bitcoin is far more valuable than Dogecoin. The all-time high for Bitcoin is more than $64,000. Dogecoin’s all-time high price has been around $0.70. While the price difference between Bitcoin and Dogecoin can be viewed as both positive and negative for various reasons, there is no disputing that tens of thousands of individuals invest in Bitcoin due to its dependability as a long-term store of wealth.

Bitcoin is also undergoing considerable changes, which may render Dogecoin obsolete. The Lightning Network, which allows users to perform smaller transactions with Bitcoin, such as a cup of coffee, by employing off-chain tunnels, is the most prominent of Bitcoin’s forthcoming enhancements.

Lightning Network tunnels are established between two users, allowing them to transact immediately and with little expense. When the two parties have completed their transaction, they can seal the tunnel, which is then transmitted to the main Bitcoin network. While Dogecoin may have faster transaction speeds, the Lightning Network may render Dogecoin obsolete in the long term.

In terms of popular perception, Bitcoin is nowhere near Dogecoin’s meme status. Institutional investors are far less likely to invest large sums of cash in Dogecoin due to its meme roots. Instead, high-value investors will almost certainly flock to Bitcoin, a cryptocurrency that has earned its place in the market since its inception.

The miner receives 10,000 DOGE for each Dogecoin block mined. Mathematically, this means that 10,000 Dogecoin are released into the network every minute, depreciating the asset over time. The steady devaluation of Dogecoin is exactly what Markus and Palmer desired. Because the two Dogecoin developers constructed an infinite supply of Dogecoin, it should not be valuable due to scarcity. Bitcoin, on the other hand, is resistant to inflation. Bitcoin’s hard cap of 21 million tokens, combined with its ever-decreasing rate of release, should result in a steady increase in its value, akin to gold. Scarcity and demand produce high long-term value.

Bitcoin enthusiasts debate whether Bitcoin is intended to be a type of alternative currency or a store of wealth. If Bitcoin becomes a store of value, another cryptocurrency might take over the name “alternative cash.” Litecoin or another project with more legitimacy and mindshare than Dogecoin would be the cryptocurrency picking up alternative cash based on popularity. All of this is to indicate that, even if Bitcoin is no longer a Dogecoin competitor, other cryptocurrencies do far better than Dogecoin.

Bitcoin vs. Dogecoin: Which one is right for you?

Given that both Bitcoin and Dogecoin have advantages and disadvantages, there is no clear winner. However, the question of whether Bitcoin or Dogecoin is right for you can be answered.

It’s critical to note that, despite their price disparities, Bitcoin and Dogecoin have both produced remarkable returns for their investors at various points. Dogecoin’s price fluctuated from less than $0.001 to over $0.68 in 2021 alone, providing early investors with quite a tidy profit. However, it should be noted that the Dogecoin price increase was caused by Elon Musk’s word of mouth. Dogecoin’s price did not rise because of any technological advancements, as is common in the blockchain. It’s tough to determine whether lightning can strike again in the case of Dogecoin.

In fact, the Dogecoin network is constantly generating new coins, depreciating the asset over time. Many investors believe that Dogecoin’s future could be jeopardized by depreciation. Bitcoin, on the other hand, is intended to rise in value over time due to scarcity. The future value of Bitcoin is determined by demand, but there is no doubting the asset’s potential.

Remember how Palmer and Markus created Dogecoin as a meme? There isn’t much in the way of long-term philosophy programmed into the Dogecoin network, especially given diggers’ ongoing pumping out of additional DOGE. Despite Markus and Palmer’s intentions, the Dogecoin project has been taken over by the community. Dogecoin’s future scalability and security improvements will allow the community to certify DOGE’s existence.

Overall, based on price history, Dogecoin appears to be a more short-term investment for many, whereas Bitcoin appears to be a long-term investment. There are certainly those who regard Bitcoin as an alternative currency and Dogecoin as a store of wealth and who have gained from both. Historically, Bitcoin has been a long-term investment, whereas Dogecoin has been a short-term one. However, depending on future news and developments, the scenario for both networks can potentially change.

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