Bitcoin has been the holy grail of crypto since the anonymous Satoshi Nakamoto published its whitepaper in 2008. Fast forward to today, we have more than 4,000 altcoins based on blockchain technology.
Crypto popularity has never been this high. The reason is the speculation that crypto is a must-catch investment wave. Moreover, government liquidity flooding the financial system also plays its role.
That said, few cryptocurrencies have enjoyed a higher return on investment than Dogecoin. With celebrities and billionaires like Elon Musk tweeting about it, this Shibu Inu-inspired coin’s price recently hit a record high of $0.73 – a 9,000% rise in price from Jan 2021. So how does DOGE compare to Bitcoin?
While Bitcoin and Dogecoin are both exciting peer-to-peer blockchain networks, they vary in several aspects. They are different purposes of inception, technical aspects, and expected divergent futures.
Purpose of Creation and Development
Bitcoin was the first viable digital currency created to disrupt the current financial system. There were other online currencies before its inception, like Bit Gold and B-Money. However, Bitcoin’s ability to overcome the double-spend issue associated with digital currencies made it revolutionary.
Satoshi Nakamoto published Bitcoin’s whitepaper in response to the Great Financial Crisis. The developer believed that Bitcoin would help decentralize the financial system. This would provide people with an escape route from the monetary manipulation associated with the central banking system.
Bitcoin’s value has grown steadily as people see it as a well-thought-out store of value.
On the other hand, Dogecoin was created in 2013 by Jackson Palmer and Billy Markus. The developers state that Dogecoin was made as a tongue-in-cheek coin. Its attempt was to lighten the stigma and sophistication around cryptocurrencies.
With the Shibu Inu meme trending in 2013, Palmer decided to use the now-famous Japanese dog as Dogecoin’s logo. In Palmer’s words, Dogecoin was created for the sillies.
Despite Dogecoin entering the crypto space as a joke, the coin gained massive adoption among crypto fans on Reddit. It was mainly used as a tipping coin before going global thanks to Elon Musk. As a result, Dogecoin leverages blockchain technology to run its network.
However, its overall usefulness is not on the same level as Bitcoin or Ethereum due to a lack of any technical development.
Differing Proof of Work (PoW) Mining Consensus and Block Times
Dogecoin and Bitcoin share multiple technical aspects. One of them is the PoW consensus for mining. However, they use different technologies. This is expected since Billy Markus, who was a software engineer at IBM, reportedly claims that he copy-pasted Bitcoin’s source code and replaced all mentions of Bitcoin with Dogecoin.
Bitcoin secures its network with the SHA-256 algorithm, which is considered more secure but a bit slower. This consensus has protected Bitcoin’s network from the 51% attack suffered by Bitcoin Cash or Ethereum Classic.
Using the SHA-256 consensus also makes it more difficult for individual miners to validate transactions. That led to the creation of more powerful ASIC-based rigs and mining pools. This method is also energy-intensive, which is why the price of BTC has skyrocketed in recent years.
On the other hand, Dogecoin started using the Scrypt PoW mining back in 2014 after its developer accepted the offer to merge mine with Litecoin. This move gave Dogecoin a faster hashrate, making it more decentralized and secure – preventing it from the infamous 51% attack.
Scrypt mining is a computationally efficient algorithm that tends to use less energy. Mining with this consensus removes the need for powerful GPU rigs. What’s more, utilizing the Scrypt PoW algorithm prevented miners from using Bitcoin ASIC miners on DOGE’s network.
However, while you can’t create DOGE using Bitcoin miners, this doesn’t prevent you from trading your DOGE with BTC. To avoid price volatility, you can easily exchange Doge to Bitcoin on Godex.io anonymously and at a fixed rate.
Block Times and Number of Coins in Circulation
It takes about 10 minutes on average before a new block is created on the Bitcoin network. As of writing, there are about 18.7 million Bitcoins in circulation – the maximum number of BTC is set at 21 million. With a block time of 10 minutes, the last BTC will be issued in 2140.
Mining a new block on Dogecoin takes about 1 minute on average. The developers initially set the number of DOGE available for mining at 100 billion. However, all the coins had been issued by 2015, which led to a change in the code. The supply of DOGE is now unlimited but there is a cap of issuing 5 billion coins per year.
With such a high inflation rate, DOGE is only viable as a medium of exchange. Its faster and less congested network makes it ideal for making small transactions such as tipping on social media platforms.
Bitcoin and Dogecoin have their similarities. They both utilize the revolutionary blockchain technology. However, the fundamental differences arise from their use and technical aspect.
Bitcoin is most people’s preferred crypto choice when it comes to storing value. Dogecoin stays true to its original purpose – allow regular and new crypto users to enjoy this 21st technological breakthrough.