The whitepaper for Bitcoin described it as a decentralized digital currency that attracted a large following, with many people expecting it would eventually replace the existing financial systems in use today. Bitcoin was and continues to be a significant deal in finance, to the point where international legislators are battling to control it.

Despite the financial upheaval caused by Bitcoin, some noticed its blockchain-based technology and wanted to use it for less dramatic purposes. Building on the concept was straightforward in theory because the Bitcoin blockchain is completely open-source.

A meme cryptocurrency called Dogecoin (DOGE), developed in 2013 by two software developers named Jackson Palmer and Billy Markus, was inspired by Bitcoin’s simplicity.

An overview of Bitcoin and Dogecoin’s journey

Palmer created Dogecoin by fusing the well-known “Doge” Shiba Inu meme with a cryptocurrency. Palmer then posted a somewhat joking tweet about his idea, and Markus contacted him to start working on Dogecoin.

Markus created Dogecoin in three hours. Basically, he modified the source code of Lucky Coin, Litecoin, and Bitcoin in order to create Dogecoin before putting the project online.

DOGE developed a sizable community as a result of the social networking site Reddit. The Dogecoin subreddit was teeming with supporters introducing new people to the DOGE community, exchanging it, and sharing knowledge about it.

Elon Musk, the creator of Tesla, eventually got involved and his Dogecoin love is well known by now. Early in 2021, Elon Musk constantly tweeted about DOGE and promised to send the stock to the moon. Following his post, a wave of investors rushed to buy DOGE, sending its price soaring. Additionally, it led to a flurry of DOGE-related memes, which increased interest in the commodity.

However, the Dogecoin network was hacked on Christmas in 2013. 11 million DOGE were taken by a hacker who gained access to DogeWallet, a third-party Dogecoin platform. Two days later, the Dogecoin community generously gave 15 million DOGE to DogeWallet.

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Many in the cryptocurrency community still view DOGE as more of a meme than Bitcoin. Nevertheless, because DOGE is supported by well-known exchanges like Coinbase and Robinhood, the general public is constantly exposed to it.

Where Dogecoin excels above Bitcoin?

Although the two cryptocurrencies have a similar structure, Bitcoin and Dogecoin shouldn’t be compared to one another. In actuality, there are a lot of distinctions between Bitcoin and Dogecoin.

For instance, Bitcoin’s proof-of-work consensus algorithm is based on the SHA-256 hashing algorithm. The National Security Agency (NSA) of the United States created the SHA-256 standard, which is widely regarded as a cutting-edge encryption technique.

In contrast, Dogecoin makes use of the Scrypt hashing algorithm that Litecoin made popular. Scrypt makes it possible to mine cryptocurrencies more easily than on SHA-256 networks. Only the first miner to discover a block hash receives a reward on a proof-of-work blockchain network.

Users with less potent gear earn significantly less than businesses and individuals with thousands of dollars in hardware since only one miner can receive the incentive. Even so, specialized graphics cards known as Application-Specific Integrated Circuits (ASICs) are available for PoW mining (ASIC). ASIC miners are more likely to receive a reward than regular miners, further restricting novice miners.

However, the Scrypt standard is ASIC resistant. Due to the lack of ASIC support, blockchain networks with Scrypt were put in place to ensure that traditional mining hardware functions properly. A humorous term for miners on the Dogecoin network is “diggers.”

Supply capitalization between Bitcoin and Dogecoin

Although the founders of Dogecoin initially intended for it to have a 100 billion hard supply market capitalization, they subsequently eliminated it to stop users from stockpiling it and seeing it as an investment. Since Dogecoin’s supply capitalization is removed, it becomes a limitless asset, hence there is no longer any scarcity.

Investors would understand Dogecoin isn’t meant to be a store of value because of its endless supply capitalization. On the other hand, Bitcoin has a hard supply capitalization of 21 million BTC, which many people assume is what drives the asset’s value due to its rarity.

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Bitcoin should theoretically appreciate in value over time if it becomes more difficult to obtain. The fact that Dogecoin doesn’t have a supply limit and issues 5 billion units annually ensures that the asset will never become excessively valuable, which is exactly what Palmer and Markus intended when they created Dogecoin. After all, it was created as a joke.

Not to note that Dogecoin processes transactions considerably more quickly than Bitcoin in terms of transactions per second (TPS). Unlike Bitcoin, which takes ten minutes to confirm a block, Dogecoin only takes one minute. When compared to Bitcoin’s average TPS of 7, Dogecoin processes transactions at a rate of about 33 transactions per second.

The price of Dogecoin is also far less erratic than the price of Bitcoin. The value of Bitcoin has been known to fluctuate by thousands of dollars daily. Similar to Bitcoin, Dogecoin is likewise quite erratic; the asset’s price typically fluctuates below $1. Dogecoin is a more viable option for daily transactions than Bitcoin because of its relative stability.

Bitcoin vs. Dogecoin: Bitcoin’s advantages

Although Dogecoin offers advantages over Bitcoin, the Shiba Inu-themed digital currency isn’t flawless. Bitcoin still has some significant advantages over Dogecoin in terms of technology.

For starters, Bitcoin is much more valuable than Dogecoin. The all-time high price of Bitcoin is almost $64,000. Dogecoin has never been purchased for more than $0.70. There is no doubting that tens of thousands of individuals invest in Bitcoin because of its dependability as a long-term store of value, despite the fact that the price difference between Bitcoin and Dogecoin could be seen as both positive and negative for many reasons.

Significant changes to Bitcoin are also underway, which may render Dogecoin obsolete. The most prominent of Bitcoin’s future improvements is the Lightning Network, which uses off-chain tunnels to enable users to utilize Bitcoin for smaller transactions.

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Between two users, Lightning Network tunnels are opened, enabling immediate, low-cost transactions. The tunnel can be closed when the two parties have completed their transaction, at which point it is transferred to the main Bitcoin network. Even though Dogecoin may currently have faster transaction times, Lightning Network may eventually make Dogecoin practically useless.

Dogecoin is far more of a meme than Bitcoin is in terms of popularity with the general population. Institutional investors are far less likely to make sizable investments in Dogecoin as a result of its meme history. High-value investors will almost certainly favour Bitcoin instead because it is a cryptocurrency that has been profitable from its creation.

Which digital currency should you invest in – Bitcoin or Dogecoin?

There is no clear winner because both Bitcoin and Dogecoin have advantages and disadvantages. To the question of whether Bitcoin or Dogecoin is best for you, there is undoubtedly an answer.

It’s crucial to realize that despite their disparities in price, both Bitcoin and Dogecoin have, at various points, generated impressive returns for their investors. Dogecoin’s price fluctuated from less than $0.001 to over $0.68 in 2021 alone, giving early investors a sizable return. Having said that, take note that Elon Musk’s advocacy was what caused the Dogecoin price to increase. As is customary in the blockchain, there was no technological advancement that caused Dogecoin’s price to increase. It’s challenging to predict when lightning will hit.

Of course, the constant influx of new coins into the Dogecoin network reduces the asset’s value over time. Devaluation may signal a future disadvantage for Dogecoin to many investors. The scarcity of Bitcoin, on the other hand, is intended to cause its value to rise over time. Demand will determine if Bitcoin’s value increases further, but there is no disputing the asset’s potential.

Overall, based on the price performance of both projects, Dogecoin seems to be a more popular short-term investment than Bitcoin. Undoubtedly, there are those who consider Dogecoin to be a store of value and Bitcoin to be an alternate form of payment, and who have even benefited from these beliefs in both cases.