Bitcoin and Dogecoin are two of the most popular cryptocurrencies out there today. Both have a huge market cap and trading volume, but how do they differ? What sets these two cryptocurrencies apart, and which comes out on top?
What is Bitcoin (BTC)?
If you’re interested in crypto, you’ve undoubtedly heard of Bitcoin, the world’s first and most popular cryptocurrency, created by the anonymous Satoshi Nakamoto in 2008. Although Bitcoin was once almost worthless, it has risen through the ranks to become a very valuable resource. The price fluctuates constantly and was once almost $70,000.
Despite its ups and downs, Bitcoin has maintained its place at the top of the crypto ladder for years, and it doesn’t look like that will change anytime soon.
Bitcoin’s creator (or creators) have always been anonymous, although they are known by the pseudonym “Satoshi Nakamoto.” Nakamoto still has a huge holding of Bitcoin, worth billions of dollars. But there is a lot of speculation surrounding Bitcoin’s founder, and no one is quite sure what is fact or fiction. What we do know is that Nakamoto is responsible for creating the world’s most popular cryptocurrency to date.
How does Bitcoin work?
Bitcoin exists on a blockchain, which is essentially a chain of encrypted data. Every Bitcoin transaction is recorded chronologically and permanently on the Bitcoin blockchain using the proof-of-work mechanism. Proof of work involves individuals known as miners solving complex computational problems to confirm transactions and secure the blockchain.
Miners are paid to keep the Bitcoin network secure, and these rewards can be huge if an individual miner secures a single block. However, miners often work in groups known as pools and share the rewards. The current Bitcoin mining reward is 6.25 BTC, which is around $100,000 at the time of writing, so it’s no surprise that over a million individuals have decided to take on this venture.
Some would say that Bitcoin’s proof-of-work mechanism is outdated compared to other mechanisms, such as proof-of-stake. This is because proof of work is not very energy efficient, has slower transaction times and requires higher fees. Bitcoin is known for having frustratingly long transaction times, sometimes over hours. Unfortunately, Bitcoin’s network is incredibly popular but not scalable.
In crypto, scalability refers to a platform’s ability to expand with and support growing demand. For example, the Bitcoin network was once quite quiet, but a lot has changed. Currently, over 250,000 Bitcoin transactions are processed daily, which is no small feat. But as the popularity of Bitcoin grows, it becomes harder for the network to keep up.
This is what gives way to long transaction times and high fees. Right now, thousands of Bitcoin transactions are sitting in the mempool, a kind of waiting room where transactions go before they are confirmed. Transactions can stay in the mempool for a while, which has given way to Bitcoin transaction accelerators that can be used to speed up confirmation times. But this doesn’t solve Bitcoin’s scaling problem.
Bitcoin has a limited supply of 21 million BTC. Once this limit is reached, no more coins can be deposited. This was a deliberate move by Nakamoto and is supposed to help Bitcoin maintain its value and hedge against inflation.
What is Dogecoin (DOGE)?
Unlike Bitcoin, Dogecoin began as something of a joke, or a meme coin, poking fun at the perceived absurdity of cryptocurrency. Launched in 2014 by Jackson Palmer and Billy Markus, no one expected Dogecoin to become a legitimate cryptocurrency at the time of its creation.
Dogecoin is so named because of the viral “doge” meme that was incredibly popular online when Dogecoin was founded. The coin’s logo is the infamous doge image itself. A funny crypto based on a funny meme. Makes sense, right? Well, Dogecoin’s future was set to be very different from what its creators envisioned.
Although Bitcoin’s source code was completely original, Dogecoins was based on that used for Litecoin, another proof-of-work cryptocurrency. Unfortunately, because Dogecoin was supposed to be nothing more than a joke, its creators didn’t bother to create any original code. So, like Bitcoin, Dogecoin also uses the proof-of-work consensus mechanism, which requires miners to verify transactions, circulate new coins and secure the network.
This is an energy-intensive process, but is still profitable for miners. However, because Dogecoin is worth significantly less than Bitcoin (which we will discuss more later), the mining reward is lower. Currently, the reward for mining a block is 10,000 DOGE, which equates to around $800. This is still a decent amount, but doesn’t come close to the current Bitcoin mining reward.
Dogecoin is also based on a proof-of-work blockchain and does not scale very well. Although Dogecoin can process around 33 transactions per second, roughly double that of Bitcoin, this is still not very impressive compared to many proof-of-stake cryptos such as Solana and Avalanche.
Unlike Bitcoin, Dogecoin has an infinite supply. This means that there is no cap on how many Dogecoins can be in circulation at one time. There are currently over 130 billion Dogecoin in circulation and growing.
When it comes to security, Dogecoin is known to be slightly less secure than Bitcoin, even though both use the same consensus mechanisms. After all, Dogecoin was launched as a joke, while Bitcoin had serious intentions behind it. More emphasis was placed on Bitcoin’s security, and the network receives frequent updates to improve this element.
This is not to say that Dogecoin is not secure. Cryptocurrencies are based on blockchain technology designed to store data securely. But there are other factors, such as the development team and the source code, that should also be taken into account.
Bitcoin vs Dogecoin
So, between Bitcoin and Dogecoin, which is better? The answer to this depends on what you plan to do with either crypto. If you just want to mine, Bitcoin has a higher reward but a very high mining difficulty, meaning it’s harder to mine a Bitcoin block than a Dogecoin block. Additionally, both cryptos require an ASIC for mining, which can have very high upfront and operational costs.
When it comes to investments, Bitcoin and Dogecoin are prone to volatility, meaning that both can suffer a loss in value at any time. Both use the same consensus mechanisms as well, so there is not much difference. However, Bitcoin has a limited supply, which can help cope with the effects of inflation. So this may turn out to be a good thing over time when the Bitcoin supply cap is reached.
Bitcoin and Dogecoin have their loyal community, but this does not mean that you have to choose one of the two. Many investors choose both cryptocurrencies as investment options, while others choose neither. Deciding which crypto is best for you depends on a number of factors, including security, reputation, and price. It is important to note these things before investing.
Bitcoin vs. Dogecoin: Can You Really Call a Winner?
It is difficult to crown a winner between Bitcoin and Dogecoin. It cannot be denied that both are volatile, but there are several factors that set them apart. So if you can’t decide between the two, keep these factors in mind to help you make the most informed decision.
