Doge VS Bitcoin – Bit by Bit

With the advent of Blockchain technology, cryptocurrency has taken the world by storm. 2021 has been crypto’s biggest year so far, with the market capitalization of all cryptocurrencies hitting US$2.4 trillion in May this year.

While several big names like Warren Buffet and Elon Musk have debated about how it might impact the future of finance, cryptocurrency has certainly started to be impactful as even the slightest changes in trends now making regular headlines with global consequences.

There are thousands of cryptos to choose from, with the most popular of them all being Bitcoin, a name that is synonymous with cryptocurrency itself. But Bitcoin isn’t the only contender in the market and in recent years several popular alternative currencies—known as ‘altcoins’—have emerged. Popular names include Ethereum, Litecoin, and Binance Coin. But one particular crypto coin stands out from everything we’ve seen so far – Dogecoin!

Dogecoin explained

Believe it or not, this cryptocurrency was originally launched as a joke to ridicule cryptocurrencies such as Bitcoin. The coin itself is based on the ‘Doge meme’, which features a Shiba Inu, a Japanese breed of dog, making a particular face. The face of the dog has since then become the logo for Dogecoin.

Speaking on more technical grounds, the coin was mainly based upon Litecoin in terms of code. It features the same methodologies as Litecoin such as its mining technique and digital makeup.

Despite its satirical status, Doge surprised everybody — capturing a loyal group of followers and growing in value over time. For the most part this was thanks to the meme community, Twitter users, and a bunch of Redditors. Collectively these Doge fans formed one of crypto’s biggest communities. Fiercely loyal to Dogecoin, they have propelled its growth. The Reddit community, in particular, forms a large portion of the people who own Dogecoin. They’re also a very interactive group and are known for helping others learn about this unique cryptocurrency.

Dogecoin also pulled in some big names and celebrities to be a part of its community. From being backed up by the world’s richest man Elon Musk, to being in the pockets of Snoop Dogg, Kevin Jonas, Gene Simmons and many more.Source: Google Trends

As the Google Trends chart above shows, 2021 has been a breakout year for Dogecoin, with worldwide Google search interest in Doge (blue line) being at an all-time high in May – greater than Ethereum (above in yellow) and far eclipsing Litecoin (red), the token it was originally styled on.

Dogecoin popularity has also been propelled by social media, particularly platforms such as Reddit and Twitter. Seldom a day goes by without thousands of #dogecoin memes being shared on Twitter. More recently, Tiktok also started adding to Dogecoin’s popularity, with the app launching a Dogecoin challenge to help more people invest in or simply gain awareness about Doge.

Several platforms have started to accept payments in Dogecoin too. If a business accepts Bitcoin, it is very likely that it can accept Dogecoin as well. Today, you can even buy Elder Scrolls Gold and CS:GO skins with these digital currencies, thus adding to their popularity. Yes, you can buy goods in your favorite games using meme currency – isn’t that spectacular?

Returning to Elon Musk’s relationship with Doge, for better or for worse, this year has clearly shown the impact that an influencer like Musk can have on a cryptocurrency’s price. This impact has been clearest to see with Doge.

For example, when Musk tweeted about Doge on February the 4th – along with a Lion King Dogecoin meme of himself, the price of Doge rose 50% within 24 hours. Similarly, other Musk tweets about Doge in early May helped propel the memecoin to its all-time high of .73 cents on May the 8th.

The Tesla and SpaceX CEO has even confirmed that Dogecoin will be used to fund a SpaceX mission to the moon in 2022. Although the details are vague, the gist of the story is that a SpaceX Falcon 9 rocket will be placing a satellite called DOGE-1 in lunar orbit in Q1 2022, on behalf of the Geometric Energy Corporation. It’s understood that the mission will cost around $62 million and the Canadian company will be paying with Dogecoin.

The economics of Dogecoin

Despite Dogecoin’s popularity spike, Bitcoin still holds the spot as the most popular, successful, and widely used cryptocurrency around. That said, it’s expensive and it’s not easy to mine. Bitcoin mining takes a huge toll on electricity supplies due to its high demand for computer processing power.

Bitcoin and other ‘proof of work’ cryptocurrencies such as Ethereum also have high transaction charges when their networks are busy – and can take a lot of time to transfer. This proves to be quite expensive. This is where Dogecoin and other similar altcoins have the advantage. They do not require the same level of power for mining purposes; often much lower than the requirements for Bitcoin. This makes mining Doge easier and more accessible for a far greater user base that only has access to minimum resources for crypto mining.

Another advantage that Dogecoin holds over Bitcoin is its circulating supply. Dogecoin has the largest circulating supply of coins as compared to any other cryptocurrency. Dogecoin started with a supply of 127 million coins initially. This got incremented over the years; with 10,000 new coins added for each block reward – and every minute roughly 14.4 Dogecoin are added to the supply flow.

In other words, on an annual basis that’s around 5.2 billion Dogecoin. This huge amount of coins in circulation for Dogecoin is also related to the fact that it was originally intended to be nothing more than a joke on Bitcoin. The developers of Dogecoin decided that they would mint as much Dogecoin as possible and put them into circulation. The joke being that this mass distribution philosophy ran directly counter to the ‘hedge against inflation’ narrative that is often referenced when talking about Bitcoin. But for Doge, it has proven to be a winner. Even though the Doge price has remained under $1, for example, the volume of Doge purchased has been huge. In fact, for a brief period in May, Doge was the actually the third most valuable cryptocurrency of all time by market capitalization.

What’s next for Doge is anybody’s guess – but since its launch in 2013, this ‘joke’ currency has always surprised its naysayers, and one thing we do know for sure is that thanks to Elon Musk, Doge is definitely going to the moon next year.