Home Cryptocurrency How Are Dogecoin And Bitcoin Different?

How Are Dogecoin And Bitcoin Different?

by Serge Shlykov

Bitcoin and dogecoin don’t seem that different, but in fact the two coins are very different. The following table shows the differences between Dogecoin and Bitcoin:

  Bitcoin Coal piece
Feeding cap 21 million Unlimited supply
The number of rooms existing today 18.7 million 128 billion. Another 5 billion coins a year for eternity.
Locking time 10 minutes. 1 minute
Block size 1 MB 1 MB
Hash algorithm SHA-256 Script
Maximum Transmission Speed 7 Tx/second 70 Tx/second
Institutional support Yes No
Types of delivery Deflationary situation Inflationary, similar to USD
Market capitalization Over $1 trillion Less than $10 billion
Price Forecast More than $100,000/token NEVER more than $10/token
Psychology of Investing Digital gold Unknown.
Number of mining nodes 8,920 1,007
Average fee per transaction over $20. Less than a dollar

Parts delivery:

The total stock of bitcoins is 21 million, with 18.7 million coins mined so far and the last bitcoin to be mined in 2140.

Dogecoin, meanwhile, has an unlimited supply, with 128 billion Dogecoin mined so far. Every minute, 10,000 coins are added to the Dogecoin network. At this rate, 5.256 billion toe will be added every year. Compared to Bitcoin, Doge has a 7000 times larger supply.

Market capitalisation and price per token:

Bitcoin is deflationary and considered digital gold, while the Doj is inflationary. Here’s a chart showing inflation through 2030.

Year Calculation of jackets Inflation rate
2021 130 billion. 3.85%
2022 135 billion. 3.70%
2023 140 billion. 3.57%
2024 145 billion euros 3.45%
2025 150 billion. 3.33%
2026 155 billion. 3.22%
2027 160 billion euros 3.13%
2028 165 billion. 3.03%
2029 170 billion. 2.94%
2030 175 billion euros 2.86%

The following table shows the number of coins offered and their respective market capitalization of the most popular cryptocurrencies.

Crypto currencies Power supply Market prices
Bitcoin 18.7 million 1.1 trillion dollars
Ethereum 115.1 million 206 billion
Cardano 31.9 billion. 38.7 billion euros
Polka dot 922.3 million 34.2 billion
XRP 45.4 billion. 23.1 billion
Dogecoin 128 billion. 7.4 billion

Assuming Dogecoin’s price reaches $1 per coin in the next two years (10 billion coins more), Dogecoin’s total market capitalization should be (130 + 10 ) billion x $1 per coin = $140 billion.

Bitcoin has a market capitalization of about $1.1 trillion. Even if we assume that Dogecoin becomes the world’s largest cryptocurrency, the price will not exceed $10/Doge.

Excluding Dogecoin inflation, each coin would need to have a price of ($1.1 trillion) / (130 billion coins) = $8.46/Dozh for Dogecoin to reach a market price of $1.1 trillion.

However, if Dogecoin takes four years to reach a market price of $1.1 trillion, the price per coin would be $1.1 trillion/$150 billion = $7.33/Doge.

So even if Dogecoin becomes the most popular cryptocurrency in the world, the price won’t rise to $10 per coin.

Hash function:

Bitcoin uses SHA-256 and dogecoin uses a hashing algorithm based on Scrypt. This means that a bitcoin miner cannot mine a hut with the same device, or vice versa.

SHA-256 is more complex and hardware-intensive. That’s why bitcoin needs a 10-minute blockchain. Unlike SHA-256, scrypt’s hash is lighter, but more memory intensive. This is why Dogecoin has a one minute blocking time.

Block time and baud rate:

Bitcoin has a lock time of 10 minutes and dogecoin has a lock time of one minute. This means that Bitcoin takes at least 10 minutes to process transactions, while Dogecoin can process these transactions in 1 minute. So, in theory, Dogecoin is ten times faster than Bitcoin.

Let’s compare the transfer rate of USD, Bitcoin and Dogecoin.

We can use USD both offline and online, while we can only use Doge online. There is no argument for offline operation.

For online use, we can transfer USD through various network mechanisms such as ACH and bank transfer. We also have VISA, Master Card, Amex, Discover, Paypal that handles our online purchases with a debit or credit card.

VISA alone can process 65,000 transactions per second. Each operation is deleted in a few seconds. Let’s compare that to Dogecoin’s transaction speed.

As mentioned earlier, Dogecoin and Bitcoin have blockchain times of 1 and 10 minutes respectively.

We can determine the theoretical number of Dogecoin transactions per unit time using the following formula:

  • (Block size limit) / ((minimum possible transaction size) x (block time in seconds))

Using this formula, we find that the Bitcoin network can process 7 transactions per second and Dogecoin can process 70 transactions per second.

  • Bitcoin: (1024 x 1024) / (257 x 60 x 10) = 6.8 (block length 10 minutes, block size 1 MB).
  • Dogecoin: (1024 x 1024) / (257 x 60) = 68 (1 minute block time, 1MB block size).

But due to network proliferation and other reasons, bitcoin can practically process only 3-4 transactions per second, while dogecoin can process 40 transactions per second. Yet Dogecoin is 10 times faster than Bitcoin.

According to the U.S. Census Bureau, 330 million people live in the United States.

In one day Dogecoin can process 40 x 60 x 24 = 3,456,000 transactions (in practice 40 transactions per second).

So, if all Americans adopt Dogecoin, each person will be able to make a transfer every 330,000,000 / 3,456,000 = 95 days (3 months) on the Dogecoin network. In the case of Bitcoin: If everyone in America starts using Bitcoin, everyone will be able to transfer money every 950 days.

No matter how many computers we add to the Dogecoin and Bitcoin networks, the transfer rate will not improve unless we change the underlying protocol.

However, Bitcoin is no longer trying to be a currency. It is now considered digital gold. Therefore, unlike Doge, this slow transfer rate is not a problem.

Lighting system:

There are only a handful of part-time Dogecoin developers. There is no active development. On the other hand, many developers and organizations are actively developing Bitcoin.

Although bitcoin is slower than dogecoin, developers have already created a light network that improves bitcoin’s transaction time and lowers costs. By comparison, even the creators of Dogecoin have abandoned the project.

Destination:

Bitcoin has begun to replace the dollar. People have had enough of the 2008 housing market collapse and the government bailout of the big banks. They wanted a decentralized financial system, free of the Federal Reserve. The creator of bitcoin set a limit of 21 million bitcoins because he didn’t like the idea of an unlimited money supply. For example, the Federal Reserve prints money and adds inflation to the economy.

Everyone laughed at bitcoin when it first hit the market in 2009. Nobody took it seriously. To ridicule cryptocurrencies, Billy Marcus and Jackson Palmer created Dogecoin in 2013. It started as a joke. The Japanese dog Inu Shiba is their mascot.

Dogecoin is a copy of Litecoin with minor modifications. Litecoin itself is a copy of Bitcoin with minor modifications.

Purchases of options:

Bitcoin is available on every crypto currency exchange. In addition, users can buy and sell bitcoins through Paypal, Square and other apps.

Opportunities to buy dogecoin are limited. Only a handful of cryptocurrency exchanges allow trading in this currency. Coinbase, for example, does not support this coin.

Institutional investments

According to the Federal Reserve, the richest 1 percent controls $36 trillion, or 31 percent of U.S. wealth. The richest 10% control 70% of the wealth ($80 trillion). In contrast, the poorest 50% of the population control 2% ($2.36 trillion) of U.S. wealth.

It is the rich, the hedge funds and the institutions that move the market. Just a few years ago, bitcoin was only a few billion dollars on the market. However, its market capitalization has recently passed the $1 trillion mark, thanks to institutional investments. Goldman Sachs, Tesla, JPMorgan and several other companies have bought billions of dollars worth of bitcoins.

However, due to inflation, institutional investors are not interested in investing in Dogecoin.

Conclusion:

Bitcoin and dogecoin are very different crypto-currencies with different purposes. As an investment vehicle, bitcoin is a much better crypto currency than dogecoin.

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