For the past several years the world has slowly been adopting the new digital or virtual currency market that is growing at an incredible pace. However, since the crypto market continues to get the boost it requires, in the virtual money market, various trading cryptocurrencies have emerged that provide some mind-blowing gains. Although people have begun investing in virtual money, few still wonder about Dogecoin vs Bitcoin and which one is better.
If you have been pondering which one to purchase and which is better, here in this blog we will provide all the details you need to know about these cryptocurrencies. The topics we’ll discuss will be:
- What cryptocurrencies have in common?
- Key differences between the two popular Cryptocurrencies- Bitcoin vs Dogecoin
- Purpose of the cryptocurrency
- Market capitalization
- The Coin Issue
Cryptocurrencies are generally created using blockchain technology that uses a distributed ledger to produce, track, and manage a digital currency. You can think of it as a running digital receipt that records all the transactions in the currency, including a list of who holds which currency and how much. This “receipt” is constantly verified by the decentralized network of computers, assisting to prevent frauds, ensuring the proper functioning, and accounting of the currency.
Cryptocurrency is “mined” by the powerful computers known as miners, which perform intricate math calculations to create coins. They even earn coins by processing transactions of the currency. Thousands of cryptocurrencies exist, and, using similar blockchain technology many can be created, too. Cryptocurrencies enable their users to transfer funds semi-anonymously, though the government is getting better at tracking transactions and freezing accounts.
Difference between Bitcoin and Dogecoin cryptocurrency?
|Initial purpose||Was created to be used as currency or store of value||Was created as a joke of Bitcoin and the doge meme|
|Approximate market capitalization*||$1.02 trillion||$41.4 billion|
|Number of coins*||18.69 million||129.24 billion|
Purpose of the cryptocurrency
Each of these two cryptocurrencies was invented for a different purpose. The Dogecoin was invented due to a satire on the soaring popularity of Bitcoin, and due to the doge meme that featured a charismatic Shiba Inu. On the other hand, Bitcoin was invented for a more serious purpose, including facilitating transactions or acting to be as a store of value.
The market capitalization of Bitcoin and Dogecoin consists of the total extant coins multiplied by the current trading price, and a wide divergence exists. According to CoinMarketCap, the largest is Bitcoin and Dogecoin is amongst the top 10. Since the traders tend to cluster around the most popular cryptocurrencies, and due to this the volume significantly drops below the top 20.
Although these two currencies are among the most popular for traders, Bitcoin remains to be the one that’s emerged among the mainstream. As time is passing by Bitcoin is becoming easier to access due to the multiple ways of purchasing and/or storing the currency on existing apps like PayPal or Robinhood.
The Coin Issue
It is also an interesting point to note how many coins can be issued in each cryptocurrency. Numerous traders have opted for Bitcoin because of its hard limit on issuance which is just approximately 21 million. However, if funds continue to flow into Bitcoin, making its demand rise, this fixed limit essentially ensures the price over time will rise. Although this might be good for traders, it will make Bitcoin even harder to use as a currency. In contrast, the production of Dogecoin is unlimited and that is part of the joke. Dogecoin’s unlimited issuance hasn’t appeared to stifle the currency from skyrocketing in 2021.
In conclusion, Bitcoin and Dogecoin are the two cryptocurrencies that have made headlines recently due to their respective surging values. In terms of investing, both of these cryptocurrencies are exciting. Though there doesn’t seem to be a chance for Dogecoin to ever reach the enormous values that Bitcoin may obtain one day. This is so because today in the market, there are so many more Dogecoins. However, this doesn’t mean one can’t earn some serious ROIs investing in Dogecoin. It surely has a record of impressive market runs fueled by its community along with having goodwill overall. In fact, quite recently, Dogecoin shot up in value 7x after receiving a gleaming endorsement from some celebrities and a huge popular Reddit investment group. Though this wasn’t the first time the coin had a breakout but it’s predicted it won’t last long. In this way, Dogecoin signifies the goodwill of the crypto community and its underlying goal is to improve the lives of everyone, not just the rich.
For these reasons, experts say that it’s not a bad idea to possess some of both of these coins in your portfolio. For example, you may possess Bitcoin because it represents pure financial freedom and a break away from numerous years of financial manipulation at the hands of governments, and you may possess Dogecoin due to its demonstrations of assisting everyone and bringing a more lighthearted approach to finances. Dogecoin and Bitcoin are indeed considered to be vital to the further adoption of cryptocurrencies.
Do bear in mind that if you’re contemplating the trading of cryptocurrencies, it’s important to note that both coins are not created equal. Few features such as Bitcoin’s limited issuance might cause a currency to more attractive than others, at least for over a longer period. However, in the short term, cryptocurrency is driven by sentiment, thus, even though something created as a joke and having unlimited issuance, it can attack hard if a swell of interest sweeps in.