dogecoin (doge -3.35%) is already outperforming bitcoin (btc -1.33%) in some respects. in others, the digital currency with the adorable dog mascot is miles and miles behind the largest and oldest cryptocurrency. furthermore, the technical platforms are quite similar, as doge is a distant descendant of the bitcoin system, with a few tweaks along the way.
after trudging along with minor price gains for several years, dogecoin came into the spotlight during the social media whirlwind of early 2021. coin prices have retraced a long way since the peak of that craze, but dogecoin still outperformed bitcoin in the last two years:
Reading: Is dogecoin the next bitcoin
dogecoin price data by ycharts.
Is dogecoin about to knock bitcoin off the throne of the crypto sector in the long run?
what’s the difference?
First, let’s have a brief history lesson.
You could say that bitcoin was the first cryptocurrency on the planet. Based on a 2008 white paper by an as-yet-unknown author codenamed Satoshi Nakamoto, the first bitcoin block was mined in 2009, with the first commercial transaction taking place the following year. back then, 10,000 bitcoins bought two pizzas, a transaction that would be worth $4.1 million at current bitcoin prices.
In the beginning, many enthusiasts mined bitcoins with their own computers and graphics cards. It wasn’t long before specialized bitcoin mining semiconductors appeared on the market, smashing mining algorithms at speeds that even the best PC hardware couldn’t match. In response to this mining problem, litecoin (ltc 1.39%) was created in 2011 as a payments-focused clone of bitcoin with a couple of key tweaks.
This cryptocurrency uses a different mining algorithm known as scrypt, a deliberate choice that makes it more suitable for common computing systems. Furthermore, the technical parameters of litecoin are different, resulting in faster transaction settlements and a lifetime maximum of 84 million coins vs. 21 million bitcoin. The downside of these efficiency gains is a less armor-plated security system that might be easier to hack.
Next in this chain of inheritance was junkcoin, an experimental descendant of litecoin that continued with the pc compatible scrypt system and increased the total number of coins. luckycoin continued as a clone of junkcoin, further increasing the limit of the coin. these days, litecoin is still a serious cryptocurrency, but the rungs of junkcoin and luckycoin are mere footnotes in crypto history.
finally, dogecoin started life in 2013 as a modified clone of luckycoin. we are still analyzing the scrypt mining algorithm, but the lifetime coin production limit is no more. each new block of dogecoin is also rewarded with 10,000 new tokens, compared to 50 litecoins or 6.25 bitcoins per freshly mined block of those cryptocurrencies.
what does it mean?
this is what we have after that step by step chain of cryptocurrency evolution.
See also: Learn how to securely send bitcoin | How Do Bitcoin and Crypto Work? | Get Started with Bitcoin.com
Bitcoin is an absolutely serious cryptocurrency, designed as a secure system for the long-term store of value. You can also pay for things with this digital currency, but money transfers take a while and carry significant transaction fees. today, the total market value of bitcoin is $868 billion and the price per coin is approximately $41,300.
In the other corner, dogecoin was originally launched as a joke between two programmers with no real long-term goals or ambitions. technical adjustments have created a more agile system for digital payments with faster and cheaper transactions, but at the cost of weaker data security. the lack of a hard limit on the number of dogecoin tokens also points to massive inflation in the long run. the market value of dogecoin amounts to $18.9 billion at a price of $0.14 per coin.
bitcoin miners have to use specialized chips because pc processors and graphics cards simply can’t compete with chips specially designed to process the underlying sha-256 encryption routine. dogecoin’s scrypt system is more attractive to ordinary hardware with a large number of memory chips, making it a better choice for crypto mining enthusiasts with fast graphics cards.
doge really isn’t the next bitcoin
At the end of the day, these two cryptocurrencies have a lot of DNA and shared history, but they are very different when it comes to real-world utility. if anything, dogecoin could challenge litecoin or ripple as an efficient money transfer platform, but even that ambition seems to fall short considering dogecoin’s incoming inflation and its lighter focus on security of the data.
the coin has something else going for it, and that’s the cheery marketing message with microscopic coin prices and a cute mascot. In the hands of a marketer, that could be enough to create a cryptocurrency with long-term value. maybe. maybe. you never know.
but dogecoin will never take bitcoin’s place in the crypto universe because that was never the plan in the first place.
See also: Profit of Hate: How Domestic Extremists Are Embracing Cryptocurrency – HS Today
