Having recently hit a record-high of more than 70 cents, dogecoin was once again trading at 31 cents as of May 28.
Nevertheless, with the value of this crypto coin having spiked more than 12,000% throughout the course of the year, temptation to buy dogecoin and get in on the action is hard to resist.
Particularly when you have a long list of influential investors and famous faces touting dogecoin as the coin of the moment, mapping out what seems to be a bright future for this once-humble coin.
Meanwhile, bitcoin has likewise had a pretty stellar year. Having recently hit its own all-time high after a remarkable rally, bitcoin is trading today at just over $39,000. Even so, bitcoin remains the single most popular cryptocurrency among traders and casual investors worldwide.
But to what extent are bitcoin and dogecoin different? Are they two fundamentally different forms of cryptocurrency, or are they more similar than dissimilar in nature?
Realistically, there are only two major factors that separate bitcoin from dogecoin - neither of which suggests that the meme-inspired newcomer has anything other than an outstanding future ahead of it.
Differences in Supply and Scarcity
Perhaps the biggest and most important difference between the two is the way in which bitcoin benefits from built-in scarcity. While greater volumes of dogecoin are created all day and every day - ultimately building towards a supply that could be infinite - bitcoin is finite in nature.
If current estimates are anything to go by, 10,000 units of dogecoin are issued every 60 seconds, equating to 15 million per day or 5 billion per year. By contrast, there will only ever be a maximum supply of 21 million bitcoins in existence.
While beating a steady path towards an infinite supply isn’t necessarily the end of the world, scarcity is something that breeds demand and value. Precious metals and gemstones are worth a fortune because there are limited quantities often available, whereas materials and resources in limitless supply aren’t worth nearly as much.
How this affects the future of dogecoin remains to be seen, but there are nonetheless those who see it becoming a major player on the global currency scene on the basis of accessibility. From a trader’s perspective, it could mean that generating solid profits with dogecoin is a more plausible strategy short-term than over the long-haul - the opposite being the case with bitcoin.
Dogecoin Was Made Purely for Fun
Perhaps not purely, but dogecoin did not come to be with the same ambitious goals in mind as its counterpart. In 2009, Satoshi Nakamoto launched bitcoin, using blockchain technology, along with one of the most in-depth white papers ever written on cryptocurrency, outlining the potential for bitcoin to become a generally plausible decentralized digital currency.
From day one, bitcoin was designed to become exactly what it is today - the single most popular (and to some extent trusted) crypto coin, which many indeed believe will form the basis of the world’s future market for digital cash.
By contrast, software engineers Billy Markus and Jackson Palmer launched dogecoin in 2013 as a joke. Based on a meme that was popular at the time, they made it clear that dogecoin was “created for sillies” and was never supposed to be taken seriously.
“I threw it together, without any expectation or plan. It took about 3 hours to make,” said Markus.
You could therefore argue (quite rightly) that dogecoin is nowhere near as technologically sophisticated as bitcoin, nor does it offer the same level as security. Likewise, neither of its creators ever set out to launch something with any real long-term potential.
But when you take a look at the facts and figures from the years that followed the launch of dogecoin, its potential as a fully viable form of digital currency is clear. Even if it wasn’t initially designed to be anything other than a joke, nobody is laughing now - aside from those making a small fortune on their once-questionable dogecoin investments.
Digging (Mining) Dogecoin
Other than this, the only other difference worth mentioning between the two is the way they are sourced. While bitcoin is mined, dogecoin is (quite aptly) dug. The process of digging for dogecoin is more or less the same as mining for bitcoin, but is nonetheless significantly less competitive.
So, while it’s not to say that digging for dogecoin is any easier than bitcoin mining in the technical sense, there are far fewer people competing to add dogecoin to the blockchain - a significant point of appeal for many.
CoinShark is not responsible for any content, accuracy, quality, advertising, products or other content posted on the site. The review is for informational purposes only and reflects only the opinion of the author. Users should do their own research before taking any action.