Dogecoin vs Bitcoin | dogecoin vs bitcoin performance

Emerging as the hottest new trend in the cryptocurrency world is Dogecoin, one of the most bizarre cryptocurrencies that have ever existed. As of May 6, 2021, the complete value of the dogecoins in circulation was almost $78 billion, which is wild for a digital currency that actually originally began as a joke. 

On the same date, Dogecoin actually emerged as the fifth most valuable cryptocurrency on the market, as per CoinMarketCap, having risen to over 6,000 percent in this year.

As of May 9, 2021 dogecoin’s value plunged considerably following the statement of Tesla’s chief who termed it as a “hustle” in the "Saturday Night Live" comedy sketch TV show where he essayed the role of a guest host. 

Prior to the show, the value had been $0.65 which dipped to $0.47 on crypto exchange Binance after the show, collapsing by nearly 28%. 

Similar to Bitcoin or Ethereum, Dogecoin is a cryptocurrency while also being starkly different from these leading coins. Interestingly, Dogecoin had actually kick-started as a laid-back joke for crypto fans, with its name having been derived from an old famous meme. In spite of its unexpected origin story, the coin rose to fame in 2021. 

Dogecoin vs Bitcoin


What is Dogecoin?

"It's the future of currency. It's an unstoppable financial vehicle that's going to take over the world."- Elon Musk

Like all cryptocurrencies, dogecoin is a digital currency that can be purchased and sold in the manner of investment and spent like money. The cryptocurrency’s mascot is a Shiba Inu, an oft-meme dog breed. 

While every crypto is special, Dogecoin also shares some resemblances with the other cryptos such as its code is based on litcoin’s script. Yet at the same time, their cryptocurrency has several integral differences.

While bitcoin has set 21 million aside to be mined in total, dogecoin already has around 130 billion coins in circulation and will also be resuming to make fresh blocks of coins accessible for mining every year. This is why a single dogecoin is presently valued at around three dimes while the value of a bitcoin is presently around $57,000.

Yet while most cryptocurrencies have been paving the way towards being accepted as the common currency to buy goods, this is not really the case with Dogecoin. This cryptocurrency has lesser mainstream adoption and has a couple of niche markets,  such as being leveraged for tipping online artists.

What makes this currency stand out the most is largely its active online community. The cryptocurrency’s online group, which is mainly active on the platform of Reddit, has hoisted dogecoin coins for charitable causes.


"Dogecoin is not so much an alternative deflationary numismatic instrument as it is an inflationary leisured exploration of community-building around a cryptoasset," 

- Usman Chohan, Economist at the University of New South Wales Business School


Dogecoin can generally be purchased at exchange platforms for cryptocurrencies such as Kraken or Binance. These exchanges enable users to set up accounts through cryptocurrency or via U.S dollars. With these accounts, the users can then purchase or exchange cryptocurrencies such as Dogecoin. 

A few online brokers, such as Robinhood and TradeStation, allow people to purchase Dogecoin alongside conventional assets such as mutual funds and stocks. Dogecoin is one of the currencies normally available on such platforms, even if some cryptocurrencies may not be offered. 

The Story of Dogecoin

Dogecoin emerged into existence on December 6, 2013, by two software engineers, namely Billy Markus and Jackson Palmer. 

The former, Billy Markus, an IBM programmer from Portland, Oregon, was all aboard, intent on separating his crypto from bitcoin. The cryptocurrency had been invested in mystery through an anonymous creator, attracting a tiny miner group at that time. Markus had wished for his cryptocurrency to be exposed to the masses. 

On the lookout for aid to make his bizarre dream a staunch reality, Markus discovered Jackson Palmer, an employee of Adobe (ADBE). Jackson brought the dogecoin.com domain, offering a nod of approval for the "doge" meme which was exploding online during that time. 

Funnily enough, the website embraces its joke origin fully by making the cryptocurrency’s Shiba Inu mascot, the page’s front image, and imitating the meme which probed it, the meme that features the same dog surrounded by a bunch of Comic Sans text inscribed in broken English.

The mascot is captioned "Dogecoin is an open-source peer-to-peer digital currency, favored by Shiba Inus worldwide."

The Tale of Dogecoin’s fame

What began as a joke is no longer so, what with the cryptocurrency becoming the name on everyone’s lips in early 2021. Half of the boost was the result of the wide adoption of cryptocurrencies like Bitcoin by the public.

Yet the most influential and conspicuous supporter was Elon Musk. The SpaceX and Tesla founder’s in the month of April 2021 tweeted, “Dogs barking at the moon” and the painting created by a Spanish artist Joan Miro was shared, which was named, "Dog Barking at the Moon." The tweet was the principal incident that boosted the popularity of the cryptocurrency by heaps and bounds. 

Being extremely popular and discussed on the platform of Reddit, Dogecoin received a massive boost through a popular Reddit group, boosting its value past 600% after that push.

Many celebrities have been following suit. For instance, cryptocurrency was mentioned on Twitter by the rapper Snoop Dogg as well as Lil’ Yachty. The billionaire technology investor Mark Cuban stated in a tweet that he would choose to purchase Dogecoin over a lottery ticket. Even Mia Khalifa joined the bandwagon by announcing on Twitter that she has invested in Dogecoin. 

How does Dogecoin work?

Similar to our Ethereum and Bitcoin, Dogecoin is a cryptocurrency that operates on blockchain technology. Blockchain, which is also termed as a Distributed Ledger Technology (DLT), makes the history of any digital asset unalterable and transparent via the adoption of decentralization and cryptographic hashing. It is basically a distributed, secure digital ledger where all the undergone transactions are stored through a decentralized digital currency.

Each holder carries an identical Dogecoin blockchain ledger copy, that is regularly updated with all fresh transactions in the cryptocurrency. Similar to cryptocurrencies, cryptography is enabled for ensuring that all the transactions remain secure.

People we call miners, adopt computers for solving complicated mathematical equations with the aim of processing transactions and recording them on the Dogecoin blockchain. In return for processing transactions and supporting the blockchain ledger, miners earn extra Dogecoin, which can then be held and sold on the open market.

Dogecoin may be adopted to make purchases and payments yet the cryptocurrency is not really an effective store of value. The miners are rewarded by the blockchain for their work by generating millions of fresh Dogecoins each day, making it difficult for speculative price advances in Dogecoin to be maintained over time.

 How is Dogecoin different from Bitcoin?



 

The image shows the difference between Dogecoin and Bitcoin in terms of their supply, premise on which they were built and ecosystem


Dogecoin’s got several considerable differences when contrasted with Bitcoin. The foremost difference is the ease and swiftness miners encounter while solving the mathematical equations that carry out and record transactions on the transactions, making Dogecoin a more efficient medium for processing payments.

As there’s not really any sort of lifetime limit regarding the number of Dogecoins which can prevail, many fresh Dogecoins are launched into markets each day, with there being very less motivation for holding the cryptocurrency in terms of the long term. As opposed to this, Bitcoin’s value continues to increase owing to the system’s lifetime cap regarding the number of generated coins.


“Where it takes 10 minutes for the process to ratify new blocks on the Bitcoin blockchain, it takes only one minute on the Dogecoin blockchain,”

- Gary DeWaal, Special Counsel and Chair, Financial Markets and Regulation

Conclusion

 

Of course, the question of Dogecoin being a prudent investment decision still prevails. With even a currency as widely traded as Bitcoin being highly erratic in nature, the same could apply to dogecoin, with the possibility of the currency collapsing at any point remaining. Yet at the same time, the unexpected stunning rise of it in 2021 cannot be denied.

Dogecoin, a meme-inspired cryptocurrency, hit a record high on Wednesday after reaching about 69 cents.

With its price up over 12,000% this year, and with big names, like Elon Musk talking and tweeting about it, dogecoin has become one of the buzziest cryptocurrencies, alongside bitcoin, which itself hit a fresh record of over $63,000 last month.

Searches like “Is dogecoin the next bitcoin?” are even trending on Google.

But the two cryptocurrencies have major differences. Here are three important distinctions between dogecoin and bitcoin, according to experts.

Bitcoin has ‘built-in scarcity’

“There are many differences between dogecoin and bitcoin,” says Meltem Demirors, CoinShares chief strategy officer.

One of the “most important” is the supply of each, she says.

Dogecoin is inflationary, says Demirors, meaning “more doge is printed every minute of every day, giving doge a potentially infinite supply.”

For example, “every minute of every day, 10,000 more dogecoins are issued. That equates to nearly 15 million doge per day or over 5 billion doge per year,” she says.

An unlimited cap on supply can negatively impact value over time.

Bitcoin, on the other hand, has a finite supply of 21 million, which creates a “built-in scarcity ... akin to the way that gold or diamonds are valuable because they are scarce,” James Ledbetter, editor of fintech newsletter FIN and CNBC contributor, says.

This scarcity is central to why bitcoin bulls argue for holding the cryptocurrency long-term – because it is limited, as demand increases, the price of bitcoin should as well.

Because of this difference, “I see most people trading dogecoin on a short-term basis,” with investors hoping to make a quick profit, “and choosing to hold bitcoin over a longer duration,” Demirors says.

Dogecoin was ‘created for sillies’

Another difference between dogecoin and bitcoin is the premise on which each was created.

Bitcoin launched in 2009 with an extremely detailed white paper written by Satoshi Nakamoto, the pseudonym used by bitcoin’s creator or creators. Nakamoto’s intention was for bitcoin to become a prominent decentralized digital currency. Bitcoin supporters see the cryptocurrency as digital gold and a hedge against inflation.

Trust in bitcoin has grown with institutional and retail investors during its 12-year run, which led to the cryptocurrency selling for record-high prices this year.

In comparison, dogecoin was created as a joke in 2013 by software engineers Billy Markus and Jackson Palmer. Based on the “Doge” meme, which portrays a shiba inu dog, Markus and Palmer didn’t intend for dogecoin to be taken seriously.

It was “created for sillies,” Markus wrote in a recent Reddit post. “I threw it together, without any expectation or plan. It took about 3 hours to make.”

As a result, dogecoin lacks technical development and isn’t as secure as bitcoin.

Over the years, Markus was surprised to see how quickly the dogecoin community grew, as it bonded over a common love for the shiba inu dog meme, and recently, the cryptocurrency exploded after social media buzz from the likes of Musk and Mark Cuban.

“Dogecoin currently exists as a kind of inside joke,” Ledbetter says.

But “for many people, investing is becoming a form of entertainment,” Demirors says. “For dogecoin, the meme is the message. As the influence of FinTwit [financial industry Twitter] grows, so will the memes and the way they move our markets.”

Nonetheless, both dogecoin and bitcoin have both been called risky investments, as cryptocurrencies are highly volatile. In fact, experts warn that investors proceed with caution before buying dogecoin, deeming its rally to be highly speculative. In turn, experts warn that people should only invest what they can afford to lose.

Bitcoin has a well-funded ecosystem

Though for many years dogecoin was developed by engineers who copied the exact code from bitcoin software, bitcoin has an extensive and well-funded ecosystem that does not exist with dogecoin.

Mike Novogratz, a crypto bull and CEO of Galaxy Digital, told CNBC’s “Squawk Box” on April 20 that bitcoin is “a well-thought-out, well-distributed store of value that’s lasted for 12 years and is growing in adoption, where dogecoin literally has two guys that own 30% of the entire supply.”

“I worry that, once the enthusiasm rolls out, there’s no developers on it, there’s no institutions coming in. But it’s got this moniker of the people’s coin right now,” Novogratz told CNBC on Wednesday.

“It’s a little bit of a middle finger to the system. I think it’s dangerous because once that enthusiasm dies, if it dies, you could have a long way down. But I don’t want to discredit.”