Bitcoin was considered a winning investment asset soon after its first price surge. It made Bitcoin investors earn up to tenfolds of their original sum in 2021. It may sound fascinating to some, while others will vouch for the loss they experienced due to the coin’s volatility. Now shall we talk about Dogecoin vs Bitcoin?
Fortunately, there are some other lucrative currencies that bullish investors believe in. Talking of Dogecoin that Elon musk has endorsed. Many market players believe that dogecoin can become a thing in the near future based on market speculations.
However, Bitcoin is now trading at $41,644, which most beginners cannot afford to lose. While dogecoin, also known as meme coin, is becoming an underdog. Dogecoin is at $0.1389, eliminating the entry barrier for cautious newcomers.
Let us understand the fundamentals of these cryptocurrencies so you can make a wise investment choice.
Dogecoin Vs Bitcoin: Similarities and Differences
|Scrypt hash standard (Litecoin)||Encryption||PoW SHA-256 hash standard (NSA)|
|Unlimited asset||Circulation||21 million coins|
|33 per second||Transactions||7 per second|
|10,000 DOGE coins||Validation Reward||6 BTC|
|10 minutes time period||Conifrmation for Blocks||1 minute time period|
Dogecoin Vs Bitcoin: Similarity
The meme coin was created as carbon of Bitcoin and to address what Bitcoin has been missing out on. However, as an alternative, there are many similarities between both coins. We are going to look at them one by one.
The Proof-of-Work Consensus for Mining
One thing that relates to both the coins when we talk about Dogecoin vs. Bitcoin is the method they follow for their miners. Miners have to follow PoW protocol to validate the trading for Dogecoin and Bitcoin. Although both coins follow a different framework, the method stays the same.
What is Proof of Work Consensus?
A Proof of Work consensus is a framework put in place to validate the thousands of digital transactions of Dogecoin and Bitcoin. All these transactions are saved in different blockchain blocks. But, due to the overwhelming amount of orders, these blocks get full instantly.
This is when the Dogecoin vs Bitcoin group of miners comes into the picture. They join a mining pool of each coin and use strong technology hardware to seek out the hexadecimal (64 digits) code hidden in each block to validate the trades. When the miners find this special code, the transactions are validated and sent to the designated blockchain.
What Do Miners Get in Turn?
When we talk about Dogecoin vs Bitcoin, the miners are rewarded with suitable cryptocurrencies in the same way for their hard work. This contributes to the circulation of more assets.
Dogecoin Vs Bitcoin: The Difference
When we talk about Dogecoin vs. Bitcoin, the main difference is their market supply. Dogecoin’s founders announced the capitalization to be around 100 billion. However, this changed soon after the claim because the founders, Markus and Palmer, decided they didn’t want people to hoard the coin.
The supply for Dogecoin vs. Bitcoin is quite a topic. Dogecoin is set to be supplied unlimited, but as crypto works on scarcity, the coin’s value may not increase enough to make investors happier. Dogecoin also ensures 5-year insurance, which is the last nail in making it a great short-term investment, not a store of value. It’s the complete opposite of what Bitcoin stands for.
On the other hand, Bitcoin stands in the market as a profitable digital asset due to its limited coin supply. If more people invest in bitcoin, it will become more scarce. Hence its value rises. It’s why many investors are hoarding BTC, and the coin surely pays back.
TPS (Transaction Per Second)
Dogecoin (DOGE) was launched in 2013, but it is quite faster than Bitcoin when it comes to transactions. When you trade a DOGE coin, the block will confirm the trade within one minute, which leads to up to 30 transactions per second. While Bitcoin’s block takes around ten minutes to confirm one transaction, the process is slower.
Dogecoin Vs Bitcoin: Volatility
Whether it’s Dogecoin or Bitcoin, both are digital assets and volatile. Bitcoin is profitable because it swingers more than Dogecoin does. But, the same fact makes the coin more prone to investment loss. Dogecoin is much less volatile, and it hardly hits rock bottom. It goes below $1 at maximum.
So which crypto among Dogecoin vs. Bitcoin going to pay well?
Dogecoin is more stable compared to Bitcoin, but it’s less valuable. However, according to crypto experts, Dogecoin is a good short-term investment opportunity, while Bitcoin can be a coin that will yield results in the longer run. Whichever coin you choose, make sure you invest wisely.
A trader needs to be sure of their financial decisions and put good thought into the process. We tried to help and have this guide for you. Do your part and research cryptocurrencies. Understand the market before you take the plunge.