Bitcoin is a household name in the cryptocurrency space, since it was the first crypto asset ever created. In fact, many people don’t know any cryptocurrency apart from Bitcoin, but there are thousands of others.
Some even share many similarities with Bitcoin, one of which is Dogecoin. For those who are familiar with the crypto industry, Dogecoin is another household name, because it was the first memecoin ever created.
Memecoins are a group of cryptocurrencies that were created as joke cryptocurrencies with virtually no practical use cases, just fun crypto assets. In this guide, we explore the similarities and differences between Bitcoin and Dogecoin.
What is Bitcoin?
Bitcoin was created in 2009 to serve as electronic peer-to-peer cash. The asset was used for this purpose for a while, until the network became so laden with transactions that it took hours to finalize transactions.
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Unfortunately for Bitcoin, speed is essential for anything that will be used to settle transactions. As it failed in this area, developers started creating other cryptocurrencies, known as alternative coins or altcoins for short, one of which is Dogecoin.
Bitcoin uses a method of agreeing on the state of the network called proof-of-work. This method requires the use of specialized computers with high energy consumption to verify transactions. Those who use these computers are called miners and they get rewarded with new Bitcoins for securing the network.
What is Dogecoin?
Dogecoin is a memecoin, also known as a joke coin. This is because according to the creators, it was created as a fun cryptocurrency to ease the tension of using cryptocurrencies which are highly technical.
When initially created, Dogecoin had no real-life use cases, only that it had the picture of Shiba Inu, a popular dog breed as its logo. For many years the memecoin remained unknown until current Twitter owner Elon Musk took interest in it.
Since then, other billionaires such as Mark Cuban also took interest in Dogecoin and it started becoming popular. The value also began to rise and the coin has made many people rich in the past few years.
Dogecoin has now been adopted as a payment method in several stores, including Tesla, Musk’s electric vehicle company. This is one of the use cases of this coin, but it is expanding to include NFTs and other functionalities as well, making it a project with a bright future even though it began as a useless one.
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Indeed, Dogecoin has become an inspiration for the launch of other meme tokens such as Shiba Inu, Pepe Coin etc.
Similarities Between Dogecoin and Bitcoin
- Dogecoin and Bitcoin are two different crypto projects, but they have some similarities, some of which are listed below.
- They both use proof-of-work consensus algorithm
- They both require mining to bring new coins into circulation
- Both Bitcoin and Dogecoin can be used as investment assets and can be traded to make profit
- These similarities stem from the fact that Dogecoin was built using a huge part of the codes used to build Bitcoin.
Differences Between Dogecoin and Bitcoin
Although Dogecoin and Bitcoin share the same code, there are several key differences between them that you should know. The following are some of the differences.
- Bitcoin uses the SHA-256 consensus mechanism to secure its network, while Dogecoin uses a modified script version, even though they both use proof-of-work.
- Block time for Bitcoin is 10 minutes, while for Dogecoin, it’s only 1 minute.
- The block reward for mining a Bitcoin block is currently 6.25 BTC, but it’s 10,000 DOGE for Dogecoin
- Bitcoin has a limited supply of 21 million coins, while Dogecoin’s supply isn’t capped and will always be available to mine as long as there is demand.
- Because of the long block time, Bitcoin transactions take longer and are more expensive than Dogecoin transactions.
These are the similarities and differences between Bitcoin and Dogecoin. If you were confused before, hopefully you can now tell the difference between the two.
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