Bitcoin vs Dogecoin: The King and The Meme

Despite their differences, Bitcoin and Dogecoin have established themselves as two of the most popular assets in the crypto space. This article will look to compare both cryptocurrencies, understand how they work, their use cases, and why they have become so popular with crypto users. 

Bitcoin vs Dogecoin: Key Points 

• Bitcoin was launched in 2008 by Satoshi Nakamoto and has established itself as the world’s largest and most popular cryptocurrency. 
• Dogecoin was founded in 2013 by Billy Markus and Jackson Palmer as a satirical take on Bitcoin.
• Bitcoin has emerged as a popular investment avenue for both retail and institutional investors.
• Dogecoin found popularity as the chief memecoin and has been promoted by the likes of Elon Musk.

What Is Bitcoin? 

Bitcoin was created in 2008 by an individual or group of individuals using the pseudonym Satoshi Nakamoto. It is widely regarded as the first established cryptocurrency in the crypto market. BTC was created in response to the 2008 financial crisis that saw millions lose their life savings and how banks handled people’s life savings. It can be defined as a virtual currency that can act as money, acting as a mode of payment outside the influence of a centralized entity, removing the need for any intermediary during transactions. 

Bitcoin has established itself as the market’s biggest and most well-known cryptocurrency and inspired the creation of several other major cryptocurrencies. While it was not the first attempt at creating a cryptocurrency, Bitcoin was undoubtedly the most successful. The cryptocurrency functions on a public ledger, called a blockchain, with transactions confirmed on the bitcoin network added to the blockchain. The confirmed transactions are verified by miners who solve complex problems to confirm transactions and earn mining rewards. 

Miner rewards are halved every 210,000 blocks or four years, with the current mining reward at 6.25 BTC. Bitcoin’s total supply is also capped at 21 million, which means newer bitcoins are created at a declining rate, which will continue to slow down as the figure approaches 21 million. 

What Is Dogecoin? 

Dogecoin was founded in 2013 and is an open-source, peer-to-peer meme cryptocurrency that features the popular Shiba Inu meme as its mascot. Dogecoin became incredibly popular shortly after its release, with the blockchain and asset having several use cases. The cryptocurrency uses the same underlying technology powering Litecoin and has several features that give it a significant advantage over other meme cryptos. 

While it was created as a meme cryptocurrency, Dogecoin’s reputation changed significantly in 2021 as its valuation soared, breaking into the top ten cryptos by market capitalization. Dogecoin offered its users quick transactions and low costs, and while the initial token supply was capped, the founders switched to an unlimited supply model, ensuring that the price remained low and stable. 

Bitcoin vs Dogecoin: A Comparison

Purpose 

Bitcoin’s creator Satoshi Nakamoto wanted the cryptocurrency to function as a medium of exchange and as an investment asset, akin to digital gold. Although bitcoin can process only around 7 transactions per second (TPS), the value transacted on the network far exceeds that of any cryptocurrency, meaning users prefer using BTC to transfer large sums of money. Bitcoin’s reputation as an investment asset has also been solidified in recent years, with several companies adding BTC to their portfolios and balance sheets.

Dogecoin, on the other hand, was created as a joke currency. However, the meme cryptocurrency gained significant popularity over the years and rallied to become one of the largest cryptos in the market. Today, DOGE has a dedicated community and has become something of a cult. Elon Musk has championed DOGE and embraced it as a payment method in Tesla and SpaceX (for select merchandise) to increase its utility.

Supply 

One of the main reasons Bitcoin is so valuable is its deflationary monetary policy. Block rewards are halved every 210,000 blocks, which means new bitcoins are being created at a decreasing rate. 

On the other hand, Dogecoin has embraced an inflationary mechanism as it looks to create a genuine peer-to-peer payment system with an unlimited supply of DOGE tokens. The reason behind the adoption of an inflationary market policy is that, according to the founders, it would prevent the hoarding of assets and keep prices low. DOGE’s supply increases by 5 billion annually, ensuring enough tokens are in circulation. 

Block Times 

Dogecoin takes around 1 minute to confirm and add a block to the blockchain. Meanwhile, Bitcoin takes an average of 10 minutes to confirm a block. This means that Dogecoin transactions could be much faster than Bitcoin.

Transaction Fees

Thanks to high processing fees, bitcoin transactions are significantly costlier than Dogecoin’s. For example, in the months leading up to 2022, processing fees for bitcoin transactions ranged between $1.25 and $5, while the fee for Dogecoin transactions ranged from $0.10 and $1.75. Both cryptocurrencies also use different fee structures. Bitcoin users can pay an additional fee for faster processing, regardless of the value of the transaction. However, Dogecoin’s transaction fees are based on the transaction size. 

Bitcoin vs Dogecoin: Key Differences

In Closing

Both Bitcoin and Dogecoin remain hugely popular cryptocurrencies, despite their differences. Bitcoin has emerged as a robust investment asset and store of value, attracting investors and institutions alike. Several companies have also started investing in bitcoin, using it as a hedge against inflation. No surprise, then, that bitcoin commands such staggering value.

Dogecoin has a completely different use case. Despite its tag as a “meme cryptocurrency,” DOGE still has considerable utility. The asset also stands out thanks to its low transaction costs and fast transaction speeds.