While many businesses are most interested in the advancement of cryptocurrency because of the technology involved in buying and trading it – blockchain – there are plenty of businesses who want cryptocurrency news because of the belief that cryptocurrency is the way of the future. Some investors believe that cryptocurrency will replace traditional currency or payment methods and others believe that blockchain will change the way that businesses handle things from logistics and supply chain management to hiring and human resources.
Here’s what to know about the current state of cryptocurrency and popular kinds of cryptocurrency in today’s market, including Dogecoin vs. Bitcoin.
What is a cryptocurrency?
NerdWallet, the well-known finance and budget websites, describes cryptocurrency this way: “A cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service that the company provides. Think of them as you would arcade tokens or casino chips. You’ll need to exchange real currency for the cryptocurrency to access the good or service…More than 2,200 different cryptocurrencies are traded publicly, according to CoinMarketCap.com, a market research website. And cryptocurrencies continue to proliferate, raising money through initial coin offerings, or ICOs. The total value of all cryptocurrencies on June 6, 2019, was about $246 billion, according to CoinMarketCap, and the total value of all Bitcoins, the most popular digital currency, was pegged at about $136 billion.”
The value of cryptocurrency – including the technology that makes it possible – is widespread and sizeable.
The difference in Dogecoin vs. Bitcoin
Cryptocurrency first made it on the tech scene in 2009 with Bitcoin.
According to Investopedia, “Bitcoin has become the best-known, most widely circulated digital money in history. Bitcoin, with its technological design, has also inspired the development of many hundreds of other virtual currencies. In February 2016, more than 500 virtual currencies are traded in digital markets around the world every day. Few, however, come close to Bitcoin in influence, supply, trading volume or market capitalization.”
The success of other cryptocurrencies, like Dogecoin, is due to the success of Bitcoin.
The value of one Bitcoin as of June 2019 is over 11,000 US dollars – it takes over several thousand Dogecoins to create the value of 1 US dollar. Why such a stark difference?
According to BlockGeeks, “Bitcoin has no central monetary authority. Instead, it is underpinned by a peer-to-peer computer network made up of its users’ machines, akin to the networks that underpin BitTorrent, a file-sharing system, and Skype, audio, video and chat service. Bitcoins are mathematically generated as the computers in this network execute difficult number-crunching tasks, a procedure is known as Bitcoin “mining”. The mathematics of the Bitcoin system was set up so that it becomes progressively more difficult to “mine” Bitcoins over time, and the total number that can ever be mined is limited to around 21 million. There is, therefore, no way for a central bank to issue a flood of new Bitcoins and devalue those already in circulation.” This exclusivity and the time-consuming nature of mining Bitcoin means that inherently has a higher monetary value than other cryptocurrencies, including Dogecoin. While the peer-to-peer transactional nature of the cryptocurrencies is the same, there are some differences in how it’s created that affect its value.
Dogecoin is a form of cryptocurrency that was launched in 2013 as a joke but has since become a full-fledged and legitimate form of cryptocurrency. Named after the “Doge” internet meme, this Bitcoin alternative currency has several features that users prefer to Bitcoin:
- Dogecoin miners require only about 1 minute to confirm a transaction, substantially less time than both its competitors
- The Dogecoin system has no cap on the number of Dogecoins that users can mine. As long as miners continue operating, the Dogecoin supply continues to expand.
- In 2016, 3,817 Dogecoins were worth $1
- While Dogecoin is not widely accepted in retail environments, it’s a popular currency to use for tips for online content creators, forum participants, and other web services
When to comes to the differences in Dogecoin vs. Bitcoin, there isn’t a lot of overlap in users or miners, but there is a lot to be said for how the development of one led to the creation of another. While Bitcoin was the original blockchain proof of concept, Dogecoin was the proof of concept that the internet is more than receptive to the idea of peer-to-peer currency networks. One of the Dogecoin founders noted in an interview with CNET, “If anything, it exists as an educational tool. It’s a reminder that we can’t take this stuff seriously.”
Cryptocurrencies and blockchain technology have slowly and steadily been changing the way that people pay for things, exchange currency, and even create secure digital documentation of financial records. Even if your business has no interest in cryptocurrency or the discussion in Dogecoin vs. Bitcoin, it’s important to pay attention the way that cryptocurrency can change people’s access to and relationship with money as well as how blockchain is being used to facilitate more transparent and more secure transactions across industries all over the world.