- Investing Guide
- Bitcoin vs.
- How to Buy ‘BTC’
- Bitcoin Whitepaper
Bitcoin Vs. Dogecoin – What’s the Difference?
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Table Of Contents
As you further your investment strategy it’s vital to better understand the differences between Bitcoin vs Dogecoin. Bitcoin, as the world’s first cryptocurrency, set the pace for what is now a financial revolution. The impact of this coin on the world can’t be understated. Since its inception, it has helped to inspire other exciting and interesting projects in the market. One such project is Dogecoin.
When Satoshi Nakamoto released the Bitcoin whitepaper 11 years ago, it was the first time a viable digital currency was created. Unlike its predecessors, Bitcoin’s anonymous creator was able to overcome the double-spend issue that had plagued earlier attempts at creating a digital currency. Double spend is a term that refers to a hacking strategy in which an individual will make a payment, and before the payment is processed, resend the same coins to another party. Obviously, being able to send the same coins to different people would make any monetary system collapse. Nakamoto overcame this issue through the integration of a timestamp within the hashing algorithm.
He realized that if the time stamp became part of the hashing algorithm it would make it impossible for the same coins to be spent twice because they would have to be sent at the exact same time. This discovery was revolutionary and is what allowed Bitcoin to become the world’s first true cryptocurrency.
Dogecoin’s development relied heavily on the sound principles that Bitcoin introduced to the market. The coin’s founders Billy Markus and Jackson Palmer were both very familiar with Bitcoin and how it leveraged blockchain technology to accomplish its tasks. Both of Dogecoin’s founders had computational backgrounds. Markus was a software engineer at IBM and Palmer worked for Adobe as a programmer.
Their experience helped them create Dogecoin with little effort. Surprisingly, Markus has claimed that it took under 3-hours to fully program Dogecoin. He explained that he went through Bitcoin’s coding and simply removed anywhere it said Bitcoin and added Dogecoin. Consequently, Dogecoin is almost a direct replica in Bitcoin in many aspects. Dogecoin entered the market on December 6, 2013.
Despite their technical similarities, these two projects entered the market with two very different purposes. Bitcoin was created to provide the world with a viable alternative to the current financial system. The coin’s coding and whitepaper are filled with indicators of this purpose. For example, the first block on Bitcoin’s blockchain, also called the Genesis Block, has the words “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” embedded.
This secret message is telling of the true intention of this coin. The message was a reference to the Times headline at the time. Nakamoto realized that the world was beholden to a financial system that was less about prosperity and instead, focused on maintaining control over the population through monetary manipulation. The central banking system had yet again decided to alter the indicators and market measures in an effort to further the manipulation.
It’s this mission that helped Bitcoin garner such hard-core followers. Many of Bitcoin’s most ardent advocates truly believe that Bitcoin is the only way for the masses to exit out of this endless cycle of monetary terrorism. They stand by the coin, not because of its technical prowess, as there are now many more capable coins that offer a ton of new features and are more scalable. They stand by the world’s first cryptocurrency because they truly believe in Nakamoto’s mission to save the world from a future beholden to the world’s current central banking system that can print fiat currency whenever it deems fit.
Comparingly, Dogecoin didn’t enter the market with such grand ideals in mind. Markus has stated that initially the coin was created as a joke. Like Bitcoin, his intentions are woven within the coin’s features. For example, the name Dogecoin and its now-famous Shiba Inu logo was a reference to a popular meme at the time. The coin didn’t originate with some divine purpose in mind, but rather, to make people smile and get a good laugh out of the select people they thought would ever see the project.
Despite their modest goals, Dogecoin has gone on to do tons of good for people all over the world. Not too long after its launch, Dogecoin started to gain value. Since the project was originally started with a comic nature, the token’s creators felt it would be in good spirit to further their good intentions by donating their profits to worthy causes around the globe.
You could say Dogecoin’s goodwill began as soon as the coin hit the market. Almost miraculously, Dogecoin saw a 300% increase in value days after launch. The gains didn’t hold for long but they did help to demonstrate that there was a demand for a fun-filled lighthearted version of Bitcoin.
The First hack
Dogecoin didn’t have to be in service for long before its goodwill and community would get a chance to further carve out its unique niche. In December 2013, just days after launch, Dogecoin’s wallet was hacked. The infiltrator stole millions of Dogecoin from a large user base. For most coins, such a devastating hack would have signaled the end of the joke, however, for Dogecoin, it was its first true test.
Following the hack, Dogecoin organized a fundraising campaign by the name “SaveDogemas” in an effort to repay those who had incurred losses. Impressively, the community rose up to the challenge and within days, everyone who had lost coins had their losses repaid via donations from other Dogecoin holders. This was the first, but not the last time, Dogecoin’s goodwill would help those less fortunate.
The successful repayment of the hack helped to differentiate the coin from other first-generation projects at the time. It also emboldened the project’s founders to see what other great causes they could champion. In 2014, the platform started an impressive goodwill campaign that included raising $25,000 for the Jamaican Bobsled team. From there, the network became even more ambitious in its goals to make the world a better place.
Dogecoin Goes Humanitarian
The following year, the Dogecoin community stepped up its efforts significantly. That year, Dogecoin followers helped to sponsor a clean water initiative in Kenya with great success. From there, the community didn’t stop. Their next campaign would help train assistance dogs for autistic children. Today, Dogecoin has an impressive history of helping the less fortunate around the world. It’s this spirit of goodwill that continually makes this coin a popular project.
There is no denying that Dogecoin shares many technical aspects with Bitcoin. However, there are not identical. There are some variances that make the two coins more than just duplicates. Dogecoin’s founders were able to weave in their sense of humor to the coin’s primary coding. Specifically, they changed a lot of the terms used within the ecosystem. For example, Dogecoin miners are referred to as diggers.
Markus also changed some aspects of the consensus mechanism when creating Dogecoin. Bitcoin relies on the SHA-256 consensus mechanism to secure its network. Dogecoin does away with SHA-256 and instead, relies on scrypt technology within its Proof-of-Work (PoW) mechanism. The change was a direct response to the growing competitive nature of Bitcoin’s mining sector.
At that time, Bitcoin’s mining sector was already experiencing heavy concentration. Miners had begun creating more powerful GPU rigs and the entrance of Bitmain’s first ASIC (application-specific integrated chip) based miners in 2013 had seen the price of mining Bitcoin skyrocket. These new miners were thousands of times more powerful than CPU-based miners.
Sadly, the new mining rigs were also expensive. This left Bitcoin mining to only those who had the funding to purchase one of these high-powered machines. Of course, you could still mine the currency with your normal PC, as you still can today, however, the chances of ever receiving a reward in such a competitive mining sector was very low. In essence, these developments shut out the average user from participating in securing Bitcoin’s blockchain.
Keen to avoid a similar scenario with Dogecoin, Markus had the good foresight to utilize a scrypt based PoW algorithm. The advantage of this style of PoW is it prevents people from utilizing their Bitcoin ASIC miners on the network. The strategy paid off because it leveled the playing field. You can only mine Dogecoin using dedicated FPGA and ASIC devices.
Additionally, Dogecoin reduced block times compared to Bitcoin. Bitcoin’s miners approve blocks of new transactions in ten-minute intervals. Dogecoin diggers approve blocks every minute. This increased mining rate actually led to some issues later on in Dogecoin’s development. Originally, Dogecoin intended to only issue 100 billion coins. However, the 10minute block times saw the network issue all of its coins by 2015. Developers have now changed the protocol to issue 5 billion coins a year moving forward.
Bitcoin is set at 21 million coins with the last Bitcoin rewards scheduled for issuance sometime in 2140. There will never be any more Bitcoin created beyond this point. It’s this scarcity that adds to the overall value of the cryptocurrency. That is why a single Bitcoin can cost over $50,000 and a single Dogecoin goes for around $0.05.
What to Invest In?
In terms of investing, both of these projects are exciting. Of course, there is no chance that Dogecoin will ever reach the astronomical values that Bitcoin may one day obtain. Mainly because there are so many more Dogecoins in the market. However, that doesn’t mean that you can’t earn some serious ROIs investing in Dogecoin.
Dogecoin has a record of impressive market runs fueled by its community and overall goodwill. Just recently, the coin shot up in value 7x after receiving a glowing endorsement from some well-known celebrities and a hugely popular Reddit investment group. This wasn’t the first time Dogecoin had a breakout and it’s likely not the last. In this way, Dogecoin represents the goodwill of the crypto community and the underlying goal to improve the lives of everyone in the world, not just the rich.
For these reasons, it’s not a bad idea to hold some of both of these coins in your portfolio. Bitcoin, because it represents true financial freedom and a break away from hundreds of years of financial manipulation at the hands of governments, and Dogecoin because it demonstrates a will to help those around you and bring a more lighthearted approach to finances.
What Does the Future Hold?
Given the state of the market, one can assume that cryptocurrencies such as Bitcoin are on the verge of large-scale adoption. This year has seen multiple major financial institutions drop their fiat holdings and transfer their reserves into Bitcoin. Every time another firm undergoes this conversion, the market skyrockets to new heights. In turn, these firms see huge gains.
For example, the popular electric car company, Tesla Motors, recently invested $1.5 billion in Bitcoin. Within 30 days, Tesla had secured more profits from the increase in Bitcoin’s value than they did selling their cars for the entire year. The company has since stated that they intend to integrate Bitcoin further into their ecosystem by allowing users to pay their car payments directly using the world’s first cryptocurrency.
Dogecoin Star Power
Dogecoin also appears to have a bright future ahead. The coin is quickly becoming one of the most well-known projects in the market. The coin was also endorsed by the World’s richest man, and the CEO of Tesla Motors, Elon Musk. The coin has now taken a more revolutionary stance in the eyes of investors. Many people are investing in Dogecoin as a sign of their willingness to abandon the unfair stock trading practices exercised by the world’s top hedge funds.
Dogecoin continues to pop back up in headlines as more investors join in on the financial revolution. Recently, US rapper and movie star Snoop Doggy Dog Tweeted about the coin. This shot Dogecoin’s value up 55%. He is hardly alone in the growing number of celebrities helping to build this fun-filled project’s community. Even Kiss rock star, Gene Simmons has tweeted a picture of the beloved Shiba Inu recently.
Dogecoin vs Bitcoin – Two Interesting Projects that are Here to Stay
While it’s common for hard-core Bitcoiners to dismiss Dogecoin due to its comical intentions, the project is still very much alive and has been doing its thing for almost a decade. When you combine this fact with the overwhelming support the coin has, it’s hard to imagine Dogecoin ever leaving the market. For these reasons, both Dogecoin and Bitcoin can be considered vital to the further adoption of cryptocurrencies.
To learn more, make sure to visit our Investing in Bitcoin or Investing in Dogecoin guides.
How to Buy Bitcoin (BTC) and Dogecoin (DOGE)
Currently, Bitcoin (BTC) and Dogecoin (DOGE) are each available for purchase on the following exchanges.
Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry with over 9,000,000 users, and over $207 billion in quarterly trading volume.
The Kraken exchange offers trading access to over 190 countries including Australia, Canada, Europe, and is our most recommend exchange for USA residents. (Excluding New York & Washington state)
Uphold – This is one of the top exchanges for United States & UK residents that offers a wide range of cryptocurrencies. Germany & Netherlands are prohibited.
Uphold Disclaimer: Assets available on Uphold are subject to region. All investments and trading are risky and may result in the loss of capital. Cryptoassets are largely unregulated and are therefore not subject to protection.
Binance – Best for Australia, Canada, Singapore, UK and most of the world. USA residents are prohibited from many of the tokens on this platform. Use Discount Code: EE59L0QP for 10% cashback off all trading fees.
David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com
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