In the Buzzle article below, you will learn which is the better investment between dogecoin and bitcoin.
“Virtual currencies may have potential benefits, but consumers need to be cautious and they need to be asking the right questions. These currencies are not backed by any government or central bank, and at this point consumers are stepping into the Wild West when they engage in the market.”
― Richard Cordray, Director of CFPB (Consumer Financial Protection Bureau
Dogecoin and bitcoin are both cryptocurrencies, i.e., digital currencies. They are used for internet payment systems, and are based on a peer-to-peer protocol. In technical terms, a peer-to-peer protocol (P2PP) is a networking protocol that is used to create and form a network between different nodes. Digital currencies are completely electronic-based, and both the above currency systems use the cryptography method for encryption and decryption of data packets. The dogecoin vs. bitcoin chart outlined in the paragraphs below will help you understand both these terms better.
- It was launched on December 8, 2013, and the idea was initially developed by Billy Markus, and later by Jackson Palmer.
- Compared to its counterparts, it has a quick coin production schedule. According to reliable sources, 100 billion coins would be in circulation (approximately) by the end of 2014.
- It has gained popularity very quickly as an internet tipping system.
- Its functioning is based on the concept of public-key cryptography.
- It was launched in the year 2009, by a person or a group of persons going by the pseudonym Satoshi Nakamoto.
- Reliable sources state the production of bitcoins would approximately reach 25 per block (a ten-minute duration, approx.) by mid 2016.
- It is one of the most popular and widely-used internet payment systems.
- It works on cryptography too, and its transactions are recorded using block chains.
The Mining Process
- The word ‘cryptocurrency’ is used because the concept used is cryptography. Every coin network uses this concept.
- Here, the structure of the coin network is constructed around blocks. They are encompassed in block chains.
- Each of these block chains is called a ledger, which records the transactions.
- These blocks function using the concept of hashes. In technical terminology, a hash is a collection of encrypted information.
- When a person successfully decrypts/solves the hash, a pre-determined number of coins are awarded to him.
- The ledger records all this transaction, and when the person spends the coins, that exchange is recorded as well. This is how the mining process and coin transfer works.
Factors of Differentiation
|It has a block time of one minute. This means blocks are created after every 60 seconds.||It has a block time of 10 minutes. So, blocks are created 6 times in an hour.|
|It is estimated that 100 billion coins will be produced by the end of 2014.||It is estimated that 25 coins per block will be produced by mid 2016.|
|It focuses on giving, therefore, its subreddit is dominated by words, like ‘dogetipbot’, ‘verify’, ‘help’, ‘thanks’, and ‘community.||It focuses on financial systems, so its subreddit is popular with words, like ‘people’, ‘money’, ‘time’, ‘transaction’, ‘money’, and ‘time’.|
|It uses a light-hearted marketing strategy.||It uses a much more efficient and serious marketing campaign.|
|It uses an SHA256 algorithm.||It uses a script algorithm.|
|It is faster, transaction takes just a minute.||Transaction can take an hour.|
|It is more practical for handling small transfers.||It is advisable to use it for large transfers.|
- Dogecoin is the relative newcomer in the market; however, it has caught on immediately.
- It has certain advantages over bitcoin, though the latter has been around for a while.
- Bitcoin has a comparatively higher value, but the new currency is still being actively mined despite its low value.
- Reviews favoring bitcoin argue that dogecoin will undermine the digital currency system, while unfavorable reviews allege that bitcoin is focused on replacing the fiat system.
- The fact that dogecoin might replace bitcoin is a bit too far-fetched, yet, viral trends and estimates suggest that it needs to be given a chance to see if it can survive in the long run.
Though the two systems are based on the same core software technology, they were developed for different reasons. They are both susceptible to cracking and virus attacks, though bitcoin has a better infrastructure and protocol. But, to put them on the road to competition is a bit too soon, it would require some more time, observations, and reviews.