Different Types Of Cryptocurrency: Bitcoin vs Ethereum vs Dogecoin

Jun 16, 2022 | 0 comments

Cryptocurrency is digital money very much like the dollar, euro, and pound. Rather than focusing on government support or a central bank, it utilizes an online ledger with powerful cryptography to secure online transactions.

You can purchase cryptocurrency through cryptocurrency exchanges. It is also possible to “mine” some types of cryptocurrency. Mining cryptocurrency needs robust computers with advanced GPU graphics cards to do complicated math calculations to produce coins.

Since cryptocurrency is not printable like dollars, some types of cryptocurrencies have a restricted supply, making them popular with investors. Still, cryptocurrency is also subject to inconsistency, making it a risky investment.

Cryptocurrency is made utilizing blockchain technology. Came into popularity by a mysterious person named Satoshi Nakamoto, blockchain is a safe and scattered ledger that creates, follows, and handles digital currency. No one knows Nakamoto’s genuine identity or if it is one person or a mysterious group.

Blockchain is a flowing digital receipt of all the transactions in the currency, such as who possesses what currency and how much. The receipt is never cut; rather, it is always added to for a complete history. To forbid fraud, the receipt is consistently authenticated by a decentralized network of computers. This guarantees that the currency operates correctly and safely. 

There are various cryptocurrencies accessible on the market, but the three most favoured are Bitcoin, Ethereum, and Dogecoin.

Pivotal differences among three favourite cryptocurrencies

Cryptocurrencies can be made for different reasons, and each one may seize a different part of the crypto world.

1. Bitcoin

Bitcoin is the biggest and most favoured cryptocurrency. It was established in January 2009 after the publication of Nakamoto’s white paper delineating a blockchain-based currency. It is presently an internationally dealt financial asset with daily activity in the tens of billions of dollars.

The Bitcoin network is decentralized, which means that no one directs or possesses it. Instead, the Bitcoin network consists of members (approximately 80,000) who operate open-source software on their computers referred to as nodes. All Bitcoin transactions are registered on the blockchain, a public ledger

The paucity of Bitcoin, merged with increasing demand from institutional and retail investors, is one of the main issues directing its value. Bitcoin has a stable supply of 21 million coins, much less when juxtaposed to billions for other cryptocurrencies. So the approximately 19 million Bitcoins already produced and speeding in the market include roughly 90% of the complete supply. Bitcoin’s value may keep on increasing as the number of Bitcoins made come close to its limit.

2. Ethereum

In 2012, 17-year-old Vitalik Buterin started writing for Bitcoin Magazine, suggesting amendments to the Bitcoin platform. When his proposals went unanswered, he produced Ethereum, his own digital money.

Ethereum also called “Blockchain 2.0,” is identical to Bitcoin but adds some distinct characteristics, including:

1. Conditional transactions: Transactions can only happen if specific conditions are fulfilled. These regulations are known as “smart contracts”. The contract cannot be altered once it has been written. That is why they are referred to as “untrustworthy transactions”. The currency exchange will not occur if the contract conditions are not fulfilled.

2. Decentralized applications: These apps allow and impose smart contracts that operate on the Ethereum blockchain network rather than depending on a centralized server. They are written in Solidity (a JavaScript-like language created particularly for developing dApps).

Ethereum, like Bitcoin, is a disseminated network of nodes that certifies transactions and pays miners in coins. The blockchain behind the second-biggest cryptocurrency, Ether, will soon experience a remarkably expected promotion that may result in more institutional investors investing money in the network and contributing to the rising Ether’s price.

While Bitcoin is presently the biggest crypto by market value, Marchesoni deems Ether will overcome Bitcoin after its infrastructure promotion, also referred to as the “Merge”, which shows the end of Ethereum’s proof-of-work.

The amount of energy consumed during operations is one of the biggest worries about Ethereum’s present network. Ethereum 2.0 seems to be a more maintainable choice. The Ethereum Foundation appraises that Ethereum’s PoS promotion will decrease energy consumption by 99.95%.

2. Dogecoin

Dogecoin demonstrates how an internet meme can promulgate popular culture. “Doge” is an image of Kabosu, a Shiba Inu dog with a special shape on its face. The picture usually goes with a text in broken English, representing some kind of internal dialogue. This meme was so favoured that it was sold as a non-fungible token in June 2021 for 1,696.9 Ethereum – approximately 4 million dollars at the time of buying.

When the producers of Dogecoin selected Kabosu as their logo in 2013, they were being jocular. That is what makes Dogecoin distinct from its rivals. The group behind it doesn’t take itself too seriously. A Twitter poll selected Elon Musk as CEO after he voiced support for Dogecoin and called himself “The Dogefather.”

Dogecoin was produced to be more accessible than other cryptocurrencies. Theoretically, it has a boundless supply. Dogecoin guarantees that miners always get enough prizes as a motive to keep mining. Cons? Dogecoins were valued at about 24 cents each in September 2021. The coins are much more common than Bitcoin or Ethereum. The real draw, however, is the eccentric community.

Dogecoin-Ethereum bridge

The idea for the Dogecoin-Ethereum bridge popped up when Ethereum developer Buterin said on Twitter that a bridge to Dogecoin would be wonderful, and Musk concurred with him.

The bridge lets users send Dogecoin from its original blockchain to the Ethereum blockchain, where it is turned into Ethereum tokens. The changed Dogecoin will be admitted by any token that admits Ethereum. The bridge also functions in both directions, so changed Dogecoins can be changed back.

The main benefit is far more widely utilized and admitted than Dogecoin, making for much quicker transactions.

However, building the bridge is simpler said than done. It is a work in progress and there is no fixed release date at this time.

Bitcoin and Ethereum are both well-established and favoured cryptocurrencies, while Dogecoin stays a comical side project for Musk and the Doge community. Still, Doge is a great way to experiment with cryptocurrency and learn about it without getting too much money at risk.

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