Bitcoin and Dogecoin have a lot in common. Both of them are pioneer projects, with Bitcoin being the first ever cryptocurrency and Dogecoin being the first meme coin.
They are also similar in their design, because Dogecoin used the template for the design of Bitcoin as inspiration. Both cryptocurrencies are mined, so they have a similar consensus mechanism and ways of securing the network.
Anyone familiar with cryptocurrencies has probably heard about these two, but what are the differences between them? Whether you want to know these differences just for educational purposes or to influence your investment, this guide will help you.
What Is Bitcoin (BTC)?
Bitcoin as earlier stated was the first cryptocurrency to be created. The anonymous creator, Satoshi Nakamoto designed it for electronic transactions as a means of making cashless payments for goods and services.
It set the pace for peer-to-peer electronic payments for a few years, but this aim was defeated later due to network congestion. The transactions became slower and cost higher than before, which makes it not suitable for instant payments.
As a result, the network broke into two, creating Bitcoin Cash. There have also been more cryptocurrencies created independently to offer what Bitcoin lost. However, Bitcoin developers today believe the lack of scalability of the network is a feature and not a bug.
Bitcoin uses a proof-of-work (PoS0 consensus mechanism to verify transactions and keep the network secure. Miners help to verify transactions and are rewarded with new BTC in the process. This is how new BTCs come into circulation.
There are only 21 million BTC that can ever be mined, which makes it a pretty scarce crypto asset compared to others. Over 20 million BTC have already been mined, which means its supply is about to be exhausted.
While Bitcoin is considered a terrible choice for payments, it most certainly a good store of value because of this scarcity. Many people still use BTC for transactions, but most people buy it as a store value instead.
What Is Dogecoin (DOGE)?
Dogecoin is the biggest meme cryptocurrency and the first also. Like Bitcoin, it uses a PoW consensus mechanism requiring miners to verify transactions and get rewarded with DOGE. Just like for Bitcoin, this is how new DOGE coins come into circulation.
Unlike Bitcoin however, it is faster and processes more transactions per second at a much lower rate. Dogecoin also has an infinite supply, meaning mining the coin never ceases as long as the network exists.
Like every other meme cryptocurrency, the project was launched initially as a fun cryptocurrency to encourage participation of non-tech persons in crypto without intimidating them with the technicalities.
Inspired by the Shiba Inu dog breed, the project thrived on the popularity of the dog for sometime but because it had no real use cases, the hype died down. Tesla CEO Elon Musk became interested in it eventually and with his support, Dogecoin rallied again.
It has increased in value by several thousand percent since then, and the team is also working on real world use cases for the project such as support for non-fungible tokens (NFTs) in order for its demand to remain in place.
It is also noteworthy that Dogecoin is one of the cryptocurrencies accepted as means of payment in many top businesses including Tesla and AMC Theatres, both owned by billionaires who passionately support the project.
Which Should You Buy?
Bitcoin and Dogecoin share some technical similarities, but they are more different than they are similar. If you wish to invest in one, you need to weigh your choice well.
If your aim is to get a store of value, Bitcoin is the way to go, as it has returned a lot to investors over the years. Dogecoin has done the same, but it lacks the solid design of Bitcoin. If it is for payments however or something to make some quick returns, Dogecoin works better.
