Now that Dogecoin has achieved buzzword of the year status due to it being discussed as a classic topic of conversation for people of all age groups – surely it’s time to dig down and understand the facts and myths about cryptocurrency.
So what is it?
Cryptocurrency is a digital currency that can only be traded on online exchanges or stored in cryptocurrency wallets – simple-ish….
The trade takes place through the use of tokens and this concept really revolutionized the contemporary investment or payment model. The transactions through tokens ensure decentralization because they are neither issued nor regulated by a central bank or other state authority. The transactions are recorded on a distributed ledger technology popularly known as the Blockchain.
Now before we move towards Dogecoin let’s examine the clear distinctions between the two most popular cryptocurrencies by market cap.
The Two Cryptocurrencies That Topped $2 Trillion: Bitcoin (BTC) And Etherum (ETH)
Now for the two big giants of the crypto world. The total value of the cryptocurrency market topped $2 trillion in April 2021 after Ether hit an all-time high of $2,151.25.
Bitcoin is the undefeated crypto heavyweight champion of the world yet Ether – a currency that fuels the Ethereum network has had its value surging with a price jump of around 1,500% in the year 2021.
And though they hail from the same world of digital currencies they are different in many ways.
The first time traded back in 2009 and eventually picked up traction as years went by which meant a steady rise in prices simultaneously until January 2021 when the crypto hit an all-time high of nearly $42,000.
Ethereum on the other hand recorded its first trading transaction in 2015 at less than $3 to a point where it plunged to $1,400 in 2018.
You really can’t compare Bitcoin and Ethereum in their literal sense given the fact Ethereum is an infrastructure that uses blockchain technology in hopes to revolutionize finance by e.g. changing the way mortgage transfers, securities trading is conducted, etc – while Bitcoin continues to harness its position as just a leading digital currency.
Bitcoin Was First To Make Noise
Well simply put Bitcoin was the game-changer that became the first successful digital currency enabling financial transactions between two people anywhere in the globe.
There were several attempts previously made, namely DigiCash (financial transactions that were conducted through several cryptographic protocols) or Beenz (Beenz.com was a website-based online currency, that monetized web activities such as visiting a website, with beenz used as an e-currency).
The anonymous creator, or creators of Bitcoin – Satoshi Nakamoto created headlines when he/they created an online ledger, called a blockchain, responsible to record every Bitcoin transaction.
This meant that no one could send a fake Bitcoin or perform an already processed transaction of Bitcoin.
This also meant that for the first time there would be a decentralized financial structure independent from the involvement or interference from a state bank or corporation.
Initially, when Bitcoin was launched in January 2009 it had no value virtually and in 12 years reached a price of almost $65,000, its record at the time In April 2021.
The Chronicles of the Ethereum Network
Vitalik Buterin is a Russian-Canadian teenager behind the idea of crafting a system that could do more than record static quantities.
What he imagined was to use blockchain to create, manage and maintain smart contracts (self-executing agreements).
And thus the Ethereum network came into existence that self operates as a decentralized network through which applications can be built.
Apart from being a digital currency like other cryptos e.g. Bitcoin – the Ethereum network is the biggest and the most well-maintained, open-ended decentralized software platform where several cryptocurrency tokens are issued over the Ethereum network.
Launched in July 2015 – Ethereum has only been growing due to its wide array of services that enable deployment of smart contracts and provides a platform to build decentralized applications (dapps) without any fear of fraud or intervention from any third party.
Ethereum has its unique programming language that runs on blockchain and in 2014 launched a presale for Ether, which was very well received.
Remember the digital currency Ether is more like the fuel that helps developers create and run applications on the Ethereum platform.
The two main uses of Ether: First it being a digital currency that can be traded on online exchanges, and the second is to be used to run commands and applications on the Ethereum network.
What differentiates BTC from ETH
Even though both the systems have been built on open-source software, which means easily accessible for other developers to copy, contribute and make improvements; it’s important to understand that both these networks rely on miners responsible for performing complex calculations used to verify and validate the transactions – which is also known as “proof of work”.
The mining process requires a great abundance of energy thus an emitter of pollution, it is even said the Bitcoin network uses more electricity than Sweden in a year.
Let’s revisit some of the more distinct differences:
- Bitcoin was the first successful digital currency that operates outside the control of any government or corporation.
- Ethereum serves as a decentralized payment network that manages and stores financial contracts and applications.
- Ethereum applications and contracts are exclusively powered by ether
- Ether was never made to compete with Bitcoin but serve as a complementary platform
A Meme Based Crypto: Dogecoin
Dogecoin is a currency that initially started as a meme-based joke for crypto enthusiasts featuring a Japanese breed Shiba Inu of dog and now has joined the ranks of one the most popular cryptocurrencies after becoming the fifth-largest cryptocurrency by market cap.
By definition, Dogecoin is said to be much easier for miners. But how?
It lets miners complete the mathematical equations that complete and record transactions on a digital ledger with complete ease, and makes Dogecoin relatively a more efficient cryptocurrency for processing payments. Plus Dogecoin does not have a lifetime cap on the number of Dogecoins that can be created.
Because there exists no lifetime limit on the number of Dogecoins that can be created or will exist, and given the mere fact that millions of new Dogecoins are released onto the markets every single day, this mechanism leaves people with very little incentive to hold the cryptocurrency for the long run.
Bitcoin with a lifetime cap of 21 million which basically limits the maximum possible number of coins that can be created – continues to rise in value because there exists a lifetime cap on the number of coins that can be created.
Where Can You Buy Dogecoin Or Any Cryptocurrency In Pakistan?
There are two main platforms to be able to trade in cryptocurrencies: Binance and OctaFX
Binance is an exchange that in recent time has grown to become one of the most popular sought after cryptocurrency exchanges
It offers trading in more than 500 cryptocurrencies and its services range from trading, listing, fundraising, or withdrawal of cryptocurrencies.
All you need to do is set up an account, get it verified, add cryptocurrency funds to your public wallet and begin trading. For more information visit: Binance.
OctaFX is also an online currency trading brokerage that leverages technology and its data gathering system to help users improve the forex trading experience.
The trading account comes with built-in tools to help users manage profiles, manage deposits, watch demo videos and participate in contests. The contests featured are accessible to anyone be it IBs, traders, or demo users, and give users a chance to win huge prizes e.g. brand new cars.
To learn more please visit their official website: Octa FX
Concluding Cryptocurrency
It is true that Dogecoin did take its beginning from a joke made on social media and is currently worth $90 billion. Those that initially invested their money in Dogecoin did bear fruits by the start of 2021. But in reality, the story makes up for yet another pump-and-dump case study.
Like mentioned earlier above Bitcoin comes with a fixed supply of 21 million. Whereas as reported on various forums an approximately 5.26 billion new Dogecoins are created annually via block rewards paid out to miners. Now, this unlimited supply means that its value will most likely shrink unless it matches the demand side. Not to mention again (which we’ve already done thrice) – Dogecoin was a result of a social media frenzy that reached the likes and endorsements from prominent celebrities like Mark Cuban, Snoop Dogg, and Musk.
It’s safe to say that Musk has been and still is the biggest contributor of cryptocurrencies so much that when Musk appeared at a popular sketch comedy show, the value of Dogecoin rose to 100 percent till May 7 and touched a market capitalization of nearly $88 billion. But such a rise in the value of Dogecoin may not be sustainable thus not qualifying for it to be termed as a lucrative investment.
The continued flow of new coins being created and released onto the market has put downward pressure on the coin’s value. Not to mention concerns about security risks as it certainly nor has the same security and code-level scrutiny present in Bitcoin or Ethereum lacks a robust mining community which exposes it for possible mining level attacks. If you think you have a knack for cryptocurrencies and would still like to invest in Dogecoin – our advice would be to start with a few coins and then move ahead.
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Experienced and energetic marketing specialist with over 7 years of experience – Khayyam loves to share his thoughts on startups, disruptive innovation, and whatever piques his interest.
