Ethereum is currently the second largest cryptocurrency network by market cap and the biggest proof-of-stake (PoS) network.
Dogecoin on the other hand is the biggest meme coin network by market cap and also the first one ever. If you have been in the crypto industry for a while, you must have heard about these two, but do you know the difference between them?
Also more importantly, do you have any idea which of the two could make a better investment? In this guide, we have set out to answer this question for those who are looking for answers to it.
We will show you the key differences between the two, with their strengths and weaknesses to help you decide which one is best for investing.
What Is Ethereum (ETH)?
Ethereum is the largest PoS network, and the foremost platform for all things smart contracts and decentralized applications. It is the pioneer network for decentralized finance (DeFi), and everything web3 as we know today.
Launched initially as a proof-of-work (PoW) network, Ethereum changed to PoS network recently. The change was in a bid to solve some of the issues prevalent with the network such as slow transactions, high transaction fees, and low scalability.
The transition however hasn’t solved the problems at all, as Ethereum users still battle with high cost of transactions, slow transactions, etc. Because of this, there are many new PoS networks that have come on the scene to offer better networks.
Ethereum still has scheduled upgrades that will hopefully solve the problems, but for now, they still linger.
The native token for the network is ETH, or ether as some like to call it. This is a utility token used to pay for fees on the network, whether you’re sending funds, buying an NFT, or creating one.
ETH is also used for staking to secure the network. As a PoS network, Ethereum depends on validators who stake their assets to secure the network, and this staking is done using ETH. ETH is also used to reward them in return.
Although there are many categories of people who participate in governance on Ethereum, one of such categories is those who hold some ETH. They can participate in voting on the future of Ethereum whenever the need arises.
There are 120 million ETH tokens in circulation and that is the total supply as well. Since they are premined, they are all available at once and don’t need to be mined, unlike in PoW networks.
What Is Dogecoin (DOGE)?
Dogecoin is a meme currency, that is one that was created as a joke. The creators say that it was created for fun and to take the pressure off those who are not tech-savvy enough to understand the technicalities of crypto.
Inspired by the popular Shiba Inu dog breed, the project went unnoticed for a while until billionaires like Elon Musk started endorsing it. Since then, the coin, DOGE, started growing in value, bringing enormous gains to investors without any real use case.
The team has also since started working on some real world use cases to ensure that the project remains relevant for the long term. Such use cases include support for NFTs, and the use of DOGE as a means of payment by stores around the world.
Dogecoin uses the PoW consensus mechanism to verify transactions and mine blocks to release new coins, just like Bitcoin. The design follows after the design of Bitcoin.
There is no limit to the supply of DOGE, as more are being released on demand. There are over 145 billion coins in circulation already.
Which Is a Better Investment?
Looking at the characteristics of these two cryptocurrencies, it is clear that ETH is a better investment.
It has a much smaller supply than DOGE which doesn’t even have a capped supply, making every token more valuable than DOGE, now and also in the future.
