3 differences between Bitcoin and Dogecoin

April 29, 2022

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The topic of cryptocurrency has taken the world by storm. We all know how cryptocurrency investors built a fortune. 

In fact, as we speak, there are over 100,000 Bitcoin (BTC) millionaires (in terms of US dollars).

However, Bitcoin, as you know, isn’t the only cryptocurrency out there. Dogecoin (DOGE), as it is called, has emerged as a pop-cultural phenomenon.

Bitcoin was created with a serious purpose in mind, such as facilitating transactions or serving as a value storage. The Dogecoin, on the other hand, was created as a spoof on Bitcoin’s skyrocketing popularity and is based on the doge meme, which features a dog belonging to the “Shiba Inu” breed.. 

Let us dive deep and learn about the key differences between Bitcoin and Dogecoin.

A Brief History: Dogecoin

Dogecoin was founded by Billy Markus and Jackson Palmer in 2013 as a joke. This particular crypto was established to satirize the plethora of altcoins that sprang out following Bitcoin’s meteoric surge. The Shiba Inu, a Japanese dog breed highly popular in memes surfacing on social media, is featured on the coin.

The Dogecoin network was hacked around Christmas in 2013. A hacker took 11 million DOGE from a third-party Dogecoin platform, named DogeWallet. After only two days, the Dogecoin community generously donated 15 million DOGE to DogeWallet.

Since then, it didn’t take long for Dogecoin to gain popularity on TikTok. Influencers on social media urged their followers to buy it. A single TikTok challenge triggered a 600% price increase.

Dogecoin was trading at half a penny per coin by the end of 2020. Historically speaking, Dogecoin has benefited the most from Tesla’s billionaire CEO Elon Musk. In early 2021, Musk tweeted regularly about DOGE, suggesting that he would send this particular crypto asset to the moon.

Following Musk’s post, the price of DOGE skyrocketed as investors hurried to purchase the asset. It also sparked a plethora of DOGE memes, which drew even more attention to the asset.

Not only Musk, but other famous personalities like Snoop Dogg and Mark Cuban also openly endorsed Dogecoin, making the asset more popular among pop-culture enthusiasts and aspiring investors. Read this to know how to buy dogecoin in Canada on wealthsimple.

A Brief History: Bitcoin

Bitcoin is currently the world’s most popular as well as the most valuable cryptocurrency (in terms of market capitalization).

Back in April 2021, the coin reached its all-time high value of $65,000 per coin. Thanks to the ever-growing acceptability and popularity of Bitcoin, some countries’ governments are beginning to accept Bitcoin as an official form of money.

In terms of operational principles, Bitcoin is somewhat similar to the gold standard. This can be understood from the fact that there is a finite amount of Bitcoin on the market. The total supply of bitcoin is limited to a mere 21 million. The gold standard, when the value of the dollar was fixed to gold resources, showcased the same effect.

Bitcoin is often seen as a form of insurance against centralized government money. Many investors are looking for a currency that isn’t regulated by a central bank. This is due to the fact that most central governments around the globe are producing money without tying it to anything tangible, such as gold. The printing of paper currency is considered unsustainable.

In comparison to other types of cryptos, risks associated with Bitcoin are the least. This has been possible because, technically speaking, Bitcoin is more developed and matured than other cryptos and is more widely accepted as a payment method.

To know more about how Bitcoin works, you may find this brief guide on the Bitcoin economy.

Main differences between Bitcoin and Dogecoin

Bitcoin is currently the world’s most popular as well as the most valuable cryptocurrency (in terms of market capitalization).

Supply

One of the most significant distinctions between Bitcoin and Dogecoin is their supply. Dogecoin boasts to have an infinite supply of coins. The coin can inflate indefinitely because it has no cap.

Bitcoin, on the other hand, has a finite supply. Each Bitcoin is mined using a unique procedure. A Bitcoin transaction takes longer to process than a Dogecoin transaction. As it stands, it takes more powerful computers and higher electrical resources to mine Bitcoins as compared to Dogecoins.

Hash standard in use

The hash standard of SHA-256 is used to build Bitcoin’s proof-of-work consensus technique. The SHA-256 standard was developed by the NSA (National Security Agency) of the United States in 2001 and is widely regarded as cutting-edge encryption technology.

In contrast, Dogecoin uses the Scrypt hash technology that was originally pioneered by Litecoin. Mining a cryptocurrency with Scrypt is more accessible than something on an SHA-256 network.

Value

In terms of value, Bitcoin has proved to be a clear winner over the longer term. While the all-time high price for Bitcoin was over $65,000, the same for Dogecoin was roughly $0.70. 

Of course, the investors see this price difference between Bitcoin & Dogecoin as both positive and negative for many reasons. However, there is no doubt that Bitcoin has proved itself in the long-term stability game. This has persuaded thousands of individuals to invest in Bitcoin.

Conclusion

There’s no denying the fact that both Bitcoin and Dogecoin are two of the most popular cryptocurrencies surfacing on the crypto exchanges today. 

While both these options can prove to be a viable investment for crypto enthusiasts, it is almost certain that Dogecoin might never reach the massive heights that Bitcoin achieved in terms of value. This is mainly because, as we mentioned earlier, there is a virtually infinite number of Dogecoins.

One must remember that DOGE has a track record of generating amazing market returns, thanks to its community and overall goodwill. As it stands, what makes Dogecoin stand out from the rest is that it represents the crypto community’s generosity.

There are a lot of benefits of crypto and it can solve a number of problems in the business world.

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