Recently, Dogecoin (DOGE) has become one of the digital currencies (cryptocurrency) whose popularity is starting to rival Bitcoin (BTC). One reason is because of the tweet of Tesla CEO, Elon Musk.
So, which one is more ideal for investors to choose between Bitcoin versus Dogecoin?
Similarities and Differences between Bitcoin and Dogecoin
Not all cryptos are created equal and equal, and it can be confusing for you to choose which type is the most ideal. But what is clear, each currency has advantages and disadvantages that need to be adjusted to your conditions. You also need to know a few things about the two currencies before choosing which one suits your investment method.
These two cryptocurrencies have similarities in the mining process that requires a special process to get it. Both are blockchain-based which is a secure and decentralized ledger for recording transactions.
To get BTC or DOGE, have to decode complex computations via online which of course, requires resources. Both of these cryptos use a proof-of-work system.
Meanwhile, the basic difference between the two is in terms of availability. Bitcoin has a limited availability of 21 million coins of which only 18.8 million are circulating in the market. As demand continues to increase, supply becomes scarcer, so the price continues to increase. This makes Bitcoin more ideal for long-term investments.
Dogecoin, meanwhile, has unlimited availability and is not capitalized, making it easier to spread and more affordable. While it can have a negative impact on its value over a period of time, it is intended to prevent people from hoarding Dogecoin. With these characteristics, Dogecoin is considered more ideal for traders who want to speculate by aiming for faster profits.
Both Bitcoin and Dogecoin traded through the best crypto trading applications in Indonesia and abroad. Many marketplaces already provide cryptocurrency buying and storage services.
Technical and Security
Although it seems less relevant, the reasons behind the creation of these two cryptocurrencies then have an impact on the technical and security of each. Bitcoin was created seriously and in detail in order to become a decentralized digital currency. A dozen years later, trust in Bitcoin is increasing, even among institutional investors because it is considered quite safe and promising.
While Dogecoin was created not as serious as Bitcoin and this is acknowledged by the creator himself. This then makes the technical development and security of this cryptocurrency considered weaker than Bitcoin. Although in the end, these two currencies still have their own risks as an asset choice.
However, because both use cryptographic technology, both Bitcoin and Bitcoin equally safe if you use a secure crypto wallet. Make sure your private key is stored securely so that it cannot be accessed by irresponsible people.
The distribution factor of these two cryptocurrencies can also be the basis for choosing your investment assets. However, Bitcoin is considered to have a better distribution than Dogecoin and this has been proven from the journey of this crypto for 12 years. Of course, this cannot be separated from the reason for the creation above where Bitcoin was created in detail as a digital currency.
It is different with Dogecoin, which 30% of the supply is owned by 2 people, a sign that although affordable, this currency is not well distributed. What should be noted, if Dogecoin technology does not continue to develop, making it increasingly less interested, especially from among institutional investors, could have a negative impact on this currency.
Bitcoins vs. Dogecoin: In terms of mining, Bitcoin is considered to require more resources with a fairly expensive investment, with electricity, computers with high specifications and a long time. It can take up to 10 minutes to create a new block in Bitcoin. And after reaching the availability limit, miners can only hope to profit from transaction fees that don’t seem very profitable.
On the other hand, Dogecoin is somewhat more friendly to miners because even though they both require large resources, the time it takes to find a block is only about 1 minute. Not only that, Doge also offers more supply so that it can be considered more profitable for miners for long-term projections.
Bitcoins vs. Dogecoin: Transaction Fee
As is well known, Bitcoin does not charge any transaction fees while miners have to mine new transaction blocks. This then makes the user need to incur additional costs for the miner in order to can run faster. In addition, there are still other costs to be aware of in Bitcoin transactions, for example if you use a third party service.
On the other hand, Dogecoin actually offers a different transaction approach with a fixed fee of 1 Doge/kilobyte of data transferred. As a result, the average fee incurred in each transaction is 2.64 Doge. However, along with its development, it seems that these costs have been increasing and can no longer be ruled out.
Transaction Mechanism Bitcoin
It can be said that Bitcoin transactions that occur between wallets run safely. When a certain amount of Bitcoin is transferred, the transaction will be recorded on the blockchain where once registered in the block, the transaction record is then added to the digital ledger. Here, Bitcoin miners play a significant role in transactions, whatever their form.
Bitcoin transaction security is supported by 3 confirmations that are required before they can be declared First, the transaction is confirmed when the transaction is added to the block and second is when each block adds the record. After the third confirmation, then the recipient can start spending the Bitcoin they received.
Dogecoin transaction mechanism
Bitcoins vs. Dogecoin: Daily Use
You may also want to consider these two cryptocurrencies based on their daily usage scenario. Obviously, Bitcoin is already very experienced in daily use after what it experienced as a cryptocurrency pioneer. Currently, Bitcoin is not an investment tool and has become one of the most common payment options, even competing with popular services such as PayPal and PostePay.
But what Bitcoin has pioneered in fact also opens up many new opportunities, one of which is being used by Dogecoin. Cryptos such as Dogecoin are increasingly being used to facilitate payments. Dogecoin is now used by 48 businesses and retailers, and even basketball teams like the Dallas Mavericks as payments.
Dogecoin vs. Bitcoin: Volatility
Apart from the various factors discussed above, one of the crucial things that you may also look forward to in this discussion is the level of volatility of the two cryptocurrencies. And as previously explained, investing in Bitcoin carries risks that may not be tolerated by everyone. Mainly because the numbers are fairly large.
Meanwhile, Dogecoin can actually be used as a friendlier alternative because the relatively small investment value is good for you or buy assets. Since DOGE is not as strong as BTC in terms of wide adoption, it is more volatile in price but offers higher profit potential. Elon Musk and Mark Cuban hinted that Dogecoin could be a useful and profitable asset.
The final word
Bitcoin is more suitable for long-term investment than Dogecoin. However, Dogecoin is better for speculation than Bitcoin due to the higher probability of profit.
Neither option can be said to be 100% safe between the two. Each has advantages and disadvantages as well as risks that must be managed wisely by investors.