You probably discovered that cryptocurrency has ripped up after Governmental investments. Concurrently, the recouping economy also drives money into the monetary (financial system). This article walks you through the enchanting world of blockchain-crypto technology. We will also talk about the difference between Dogecoin vs Bitcoin vs Ethereum to help you make the best decisions for your investments.
Because you want more value in less time!
Recent times have heightened in-demand digital currencies, like Dogecoin, Bitcoin, and Ethereum. Bitcoin and Ethereum were already on the boom, but Dogecoin has taken us all by surprise, surpassing the rest. It is foreseen now that cryptocurrency is the vital fascination of the future on Earth.
Commonalities in Cryptocurrencies
Before we dive into the difference in different cryptos, let us explore commonalities first. It will clear the general concept of the best value for trading crypto for you. Blockchain is the same technology that has built all cryptocurrencies. This tech giant employs a distributed ledger to bring out, process, track, then manage digital currencies. It is like an ongoing digital receipt of all crypto transactions having the details of the owner of the currency and the amount records.
A decentralized network of computers constantly verifies this receipt, preventing fraud. The efficient network also ensures the appropriate functioning and accounting.
Cryptocurrency goes through the process of “mining.” The process takes place by heavy-duty computers called “miners.” Their job is to perform complex mathematical calculations to create digital coins. They get to earn coins as well by processing currency transactions.
We have thousands of cryptocurrencies to invest in. Using the same blockchain technology, we can create any number. Needless to say, the sky’s the limit! 😊
Key Variations: Dogecoin vs Bitcoin vs Ethereum
The purposes of cryptocurrency creation are many-fold. Each has its own space in the gigantic crypto sphere. Below is a table summing up the key variations or differences among the three popular cryptocurrencies. Each currency has its own clear-cut purpose and a maximal number of coins.
|Initial purpose||Created as a parody of BTC and dog meme||Created as a currency to trade and store||Created to trade processing power of the decentralized work|
|Approximate market capitalization||$19 billion||$789 billion||$374 billion|
|Number of coins||132.67billion||19.01 million||120.45 million|
|Maximal number of coins||Unlimited, Yearly issuance limited to 5 billion coins||21 million||Unlimited, fixed issuance|
Estimated values as of April 2022, according to data from coinmarketcap.com
Let us see in detail how one crypto coin is different than the other.
1. Objectives of Cryptocurrency
Each crypto has a different goal. Dogecoin gained popularity based on the doge meme mockery. Besides, Bitcoin and Ethereum have more serious purposes. These cryptocurrencies deal with facilitating transactions -the actual buying and selling. They also act as a store of value/digital assets.
2. Market Capitalization of Dogecoin vs Bitcoin vs Ethereum
The market capitalization of a cryptocurrency is the product of its total existing coins and the current trading price. These capitals are widely diversified. The largest is Bitcoin. Ethereum stands second, while Dogecoin ranks among top10 (acc. to the stats from coinmarketcap.com). Traders hang around the most sought-after cryptocurrencies along with a large volume drop below the top 20.
Bitcoin leads the industry and is becoming more accessible. It is because more ways of purchasing and storing the currency are being introduced. That includes apps like PayPal or Robinhood.
3. Significance of Coin Issuance
It is notable for every trader to stay updated about the number of coins that can be issued in each currency.
Many investors have turned to Bitcoin due to its hard limit on coin issuance (only 21 million). If Bitcoin’s value continues to rise, the fixed limit affirms the rise of the price over time. That may be good for traders, but the high adaptability makes BTC harder to use as a currency or trade value.
Comparably, Ethereum has unlimited issuance. Nevertheless, it does have a fixed issuance schedule, which might slow down the production of new ETH coins.
At the same time, Dogecoin’s production is unlimited. The unlimited issuance could not stop the currency from flying high in 2021. It rose from around half-penny a coin on January 1st to over $0.60 in May. Yet the coin trended in descending order throughout 2021.
4. Algorithm – Dogecoin vs Bitcoin vs Ethereum
Dogecoin uses Cryptography with a Scrypt mining Algorithm for mining its blocks. Scrypt is a password-based key derivation punch. It raises the resource demands of algorithms to avoid customized hardware attacks.
Bitcoin uses the SHA256 Hashing Algorithm for mining in the blockchain network. The SHA256 algorithm helps Bitcoin users protect their sensitive data. The data includes private keys or transaction details. It helps maintain the anonymity of the user for much more secure transactions.
Ethereum uses the Ethash Cryptographic Algorithm. The Ethash Algorithm operates during the proof-of-work function. Proof-of-work is a small piece of data that is difficult to generate. But it is easy to validate and satisfies specific network requirements.
5. Programming Language
Dogecoin executes as an altcoin for Bitcoin. Both of the currencies use C++ as a programming language. C++ is a stack-based programming language used to give Dogecoin and Bitcoins instructions on how to make transactions. On the other side, Ethereum uses Solidity, a high-level programming language for implementing smart contracts.
6. Mining Process
Dogecoin and Bitcoin miners mine the invalidated (unconfirmed) transactions using the proof-of-work method. So does Ethereum, but it aims to switch to the proof-of-stack method. It will make its network more immune to centralization, energy-efficient, and more vital support for shared chains.
7. Monetary Policy
Monetary policy is the procedure of drafting, announcing, and implementing a plan of action from monetary authorities. It controls the money supply and achieves goals that promote sustainable economic growth.
The block rewards of dogecoin’s monetary policy are defined by what it pays to its miners. Dogecoin’s block reward is 10,000 for mining a block. It takes one minute to generate one block.
Bitcoin’s Monetary policy is defined by two processes -halving and block reward. Having is cutting half the mining reward, which brings down the inflation rate. And the block reward is the number of Bitcoin you get when you successfully do the block mining. Bitcoin’s block reward equals 12.5 Bitcoins per block. BTC takes 10 minutes to generate one block.
Ethereum’s monetary policy is defined as minimum issuance to secure the network. It means there is a constant trade of transaction speed and security. Ethereum’s block reward is 2 Ether per block. At the same time, Ethereum takes 14 seconds to generate one block.
We can say that cryptocurrency investments have usually been sentiment-driven. Dogecoin is a clear example of a meme turning into a lucrative investment with unlimited coin issuance. We live in an unpredictable world, without a doubt!
Cryptocurrencies have brought about ingenious technology internationally, considering the crypto revolution over the past few decades. The digital coins have disrupted our financial systems and seem to change how we buy, sell, and interact with each other.
However, if you are serious about establishing a crypto investment portfolio, research each coin among Dogecoin vs Bitcoin vs Ethereum to make the right choice. Each crypto has a particular coin orientation and purpose. A few features of each currency can make it more appealing to investors as a long-term investment.