Cryptocurrencies, or cryptos as they are popularly known, were invented as an alternative to traditional currencies like the dollar and the pound. Cryptos are decentralized currencies that are not issued by government agencies; instead, they are mined on a blockchain network.
Bitcoins And Other Cryptos
Bitcoin was the first cryptocurrency that was created; however, at the present moment, there are thousands of other cryptocurrencies. Each of these cryptos has unique features that have an impact on their overall value and usability. Bitcoin is a famous and well established crypto. Dogecoin, on the other hand, is a meme-based crypto that is useful for many digital payments.
Many people are investing in these cryptos to earn a profit, but it is important to know about these cryptos before investing in them. If you want to know more about bitcoins, you could go to www.barchart.com and if you want to learn more about the security of bitcoin vis-a-vis dogecoin, continue reading this article.
Should You Invest In Bitcoin Or Dogecoin
The Robustness Of The Network
Bitcoin was created out of a serious effort to provide an alternative medium of exchange to the world. Hence the underlying network of bitcoin is quite robust. Bitcoin has a strong technical support team, so the chances of technical glitches are minimal.
Dogecoin, on the other hand, was created to mock the frenzy around cryptos. Although it runs on a blockchain similar to other cryptos yet, it is less secure than bitcoin and has a poor technical support team.
A Decentralized System For Verification Of Blocks
Both bitcoin and dogecoin run on a blockchain, and the method for generating new units of these cryptos are quite similar. In both cases, miners create and validate new blocks on a public ledger to generate a new unit of the cryptocurrency. For both bitcoin and dogecoin, there are several nodes that verify a transaction, and hence the system is quite secure for both.
An Encryption Like Mechanism For Enhanced Security
Encryption is a mechanism of encoding a particular piece of data in such a manner that only a legitimate person can decode it and not a scammer who eavesdrops in the system. Although bitcoin does not use encryption, it uses an encryption-like mechanism to ensure the safety of all the data in the system.
Dogecoin provides two passwords for its users; the public password is encrypted, and this encryption can only be decoded by the private password. Thus, dogecoin also provides an adequate level of security to its users.
An Open Source Software
Almost all cryptos are based on open source software. An open source means that the underlying code is freely available to all software developers. The prime advantage of an open code is that it is open to improvement with time. So both bitcoin and dogecoin can improve their security features and robustness with time.
The Finiteness And The Unlimited Supply Of Cryptos
The finiteness of bitcoins is probably its most crucial difference from dogecoin. When bitcoins were first invented, there were only 21 million in number. So they are essentially limited, and once all of them have been mined, there will not be any left. But that is not the case with dogecoins which are essentially unlimited, and people can continue mining them for an eternity.
The fact that a particular crypto is limited gives them a specific advantage in terms of investment. An asset whose supply is limited becomes expensive with time. This is because the demand increases while the supply is constant. And as the demand increases more as compared to supply, the price increases.
On the other hand, an asset that has an infinite supply can never be very valuable because for such an asset then is an unlimited supply. Hence, even if the demand for such an asset increases, the supply can increase commensurately. Such assets can also create inflationary pressures because if the supply of a currency increases, then it increases people’s spending ability, and hence the overall price levels in the economy increases.
So if you are looking for a safe long term investment, then you should probably avoid the dogecoin.
The Use And Global Acceptability Of A Particular Crypto
The economic potential and security of crypto depend on its utility and the factors that impact its value. Bitcoin is a very popular cryptocurrency. It is used and accepted by many sectors like the retail sector, real estate sector, information technology companies etc. In fact, some countries have even accepted it as their local currency.
All this implies that bitcoins are here to stay, and investing in them is a safe and secure way of gaining profits. On the other hand, dogecoin is mainly used for making digital payments, its acceptability is quite less in comparison to other cryptos, and its price valuation is largely shaped by social media hype.
Social media hypes die down in a matter of few days, and most of them are created on non-substantial issues. Hence, the fact that the value of a dogecoin can be influenced by social media hype makes it highly unstable and volatile.
Investing in a volatile asset is always a risky venture. You can make a huge profit when the price is on an upward swing, but you can also register a huge loss if you are not extra cautious.
In general, bitcoin is considered a more secure and safer option from the perspective of long term investment. But dogecoin has its own set of advantages, like its value being much less as compared to bitcoin. The value of one dogecoin is about 0.12 dollars, and in comparison, the value of one bitcoin is twenty thousand dollars.
Hence, almost any person can buy a dogecoin and make payments using them. All cryptos have their own set of advantages and disadvantages, and it is a good idea to read in detail about each one of them before you invest money in buying any of them.