Crypto News - Is Dogecoin Better Than Bitcoin? - Bitcoin News

Crypto News - Is Dogecoin Better Than Bitcoin? - Bitcoin News

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Is Dogecoin Better Than Bitcoin?

Bitcoin and Dogecoin have actually both been hot financial investments over the past 12 months, surging 650% and 18,600%, respectively, at recent costs. Despite being built on similar technology, these cryptocurrencies have really various origin stories.

Bitcoin was created by the pseudonymous Satoshi Nakamoto in 2009. The mysterious Nakamoto released a white paper detailing how Bitcoin could be used to build a new financial system-- one that lowered transaction costs by removing the requirement for banks.

By comparison, Dogecoin was created as a joke. In 2013, Adobe staff member Jackson Palmer referenced the popular doge meme in a tweet: "Investing in Dogecoin, pretty sure it's the next huge thing." At the time, Dogecoin didn't exist, and his remark simply poked fun at the growing buzz surrounding Bitcoin. IBM software developer Billy Markus assisted bring Palmer's joke to life.

Which of these red-hot cryptocurrencies is the better financial investment?

Cryptocurrency is built on blockchain. Regardless of being a joke, Dogecoin does have one redeeming quality: Like Bitcoin, it's built on blockchain, the peer-to-peer technology that powers cryptocurrencies.

Blockchain is a distributed ledger that tape-records every deal on a network. Its genius is that it eliminates the need for a main authority to mint and manage a currency. Instead, the miners who make up the network are responsible for structure and preserving the blockchain. Consider them as auditors: As Dogecoin transactions take place, miners group those deals into blocks and confirm each block through an energy-intensive process called proof of work. That term isn't utilized gently-- it takes effective hardware and significant computational effort to resolve the cryptographic hashes (i.e. solutions) that verify each block of transactions.

The procedure is noteworthy for two reasons:

First, the sheer computing power required for this process means it's practically impossible to hack the blockchain. In fact, an individual would need to control 51% of the computing power on the network to successfully modify the journal. To put it simply, blockchain is a secure method to store data.

Second, when miners properly solve a cryptographic puzzle and confirm a block, they are rewarded with a particular amount of cryptocurrency. This incentive ensures that a wide network of miners procedures transactions, eliminating the need for banks to serve as intermediaries.

Ultimately, this means cryptocurrency transactions go through less charges.
Here's the takeaway: Blockchain is a secure, decentralized database that might form the structure of a more efficient financial system. That's one point in favor of both Bitcoin and Dogecoin.

Initially, Dogecoin had a difficult limitation of 100 billion tokens, similar to Bitcoin's cap of 21 million tokens. In other words, as long as miners continue to build the blockchain, more Dogecoin will continue to wink into existence.

In fact, each time a block is verified, the miner receives a set reward of 10,000 Dogecoin tokens. Unless the code is rewritten, this will go on forever.

That's a vital flaw. In economics, when demand is held constant, the rate of a possession decreases as the supply goes up. And if the supply of a property inflates to infinity, the cost ought to theoretically drop to zero. Unless the code is reworded to introduce shortage, I think that's where Dogecoin's rate is headed. It might not be this year, or perhaps this decade, however ultimately the excess supply will overwhelm demand.

By contrast, Bitcoin benefits from shortage. In other words, both Bitcoin and precious metals have value because they are unusual and individuals desire them.

No one can say for certain whether Bitcoin is a good financial investment. But it definitely seems a much better financial investment than Dogecoin.

Why is Dogecoin up 18,600%? Much of the hype surrounding Dogecoin can likely be attributed to Elon Musk. The fantastic leader of Tesla and SpaceX has actually repeatedly tweeted on the subject. In April 2019, Musk stated Dogecoin may be his favorite cryptocurrency. Previously in 2021, Musk posted a picture of an imaginary magazine entitled Dogue, a pun based on the popular publication Vogue.

A couple of days later, Musk described his commentary during a chat on Clubhouse: "Occasionally I make jokes about Dogecoin, however they are actually simply meant to be jokes." Musk also kept in mind that the cryptocurrency itself was produced as a joke.

As a final idea, consider this: If the designers of Dogecoin didn't take it seriously, there's no reason for anyone else to take it seriously, either. And with no limitation on the number of tokens, Dogecoin is no more limited than air.