The cryptocurrency market is forever changing, and if it’s not the price of a coin fluctuating, it’s the introduction of new coins altogether. It can therefore be somewhat difficult to wrap your head around the coins available.
In this piece, we’ll be directly comparing Ethereum and Dogecoin, so you can figure out which is a better investment.
History
Ethereum
In late 2013, Bitcoin enthusiast Vitalik Buterin was working on the Mastercoin project. He had envisioned a blockchain that functioned as more than a payment system and thus wrote a white paper proposing the Ethereum blockchain.
After his white paper garnered significant interest, Buterin presented the idea at a Bitcoin conference in 2014. Later that year, a crowdfunding campaign began to launch the idea, and a total of 60 million Ether were created to sell. Over 50 million tokens were sold during the first two weeks of the genesis issuance.
Dogecoin
Dogecoin was launched in 2013 by software engineers Jackson Palmer and Billy Markus. This came after Palmer jokingly tweeted, “Investing in Dogecoin, pretty sure it’s the next big thing,” prior to the coin’s existence.
Dogecoin quickly gained a large following, which was owed greatly to the creators using the image of the Shiba Inu dog, a popular meme around the time. Despite what initially started off as a joke, Palmer and Markus turned Dogecoin into a fully functioning peer-to-peer digital currency. Palmer left the project in 2015.
What Are They, And Why Were They Created?
Ethereum
Ethereum is a decentralized platform that utilizes blockchain technology. It uses this technology to facilitate smart contracts and secure cryptocurrency exchanges without the need for a third party. With Ethereum, there are two types of accounts, contract accounts and externally owned accounts.
Ethereum aids developers in deploying decentralized applications; this is why it’s referred to as an innovation network. It runs on its own blockchain, and its original purpose was to market the decentralized network’s computing power.
Dogecoin
Dogecoin is a peer-to-peer digital currency that’s based on the Scrpyt algorithm. The Scrpyt algorithm facilitates easier transactions and quicker transaction confirmation, particularly compared to conventional blockchain technology.
It was originally created as a way of mocking Bitcoin and poking fun at the wild speculations in popular cryptocurrencies. Because the creators didn’t have serious plans for their cryptocurrency, they didn’t outline a specific roadmap.
Price History
Ethereum
Like most conventional cryptocurrencies, Ethereum is relatively volatile. Since its inception, it has seen measurable growth in its value, particularly in late 2021. Ethereum reached an all-time high in 2021, when it was valued at $4,878.26 per token. It was at its lowest point in 2015 when $0.432979 could get you 1 Ethereum.
At the time of writing, Ethereum’s price is $1,225.90, down about 74% from 2021. Do note that, unlike Bitcoin, there’s no limit on the amount of Ether that can be mined.
Dogecoin
At present, Dogecoin is priced at $0.096009, making it significantly less valuable than Ethereum. Dogecoin’s price hasn’t changed much over the years. However, it peaked in 2021 when it was valued at $0.731578. Its all-time low came in 2015 when one Dogecoin cost $0.00008690. It’s also worth noting that it’s considered to be extremely volatile.
Market Cap
Ethereum
Ethereum is ranked second in terms of market capitalization, with a cap of $147 billion. Additionally, it has a market cap dominance of 16.868 percent, meaning that only Bitcoin is more dominant than it.
Dogecoin
At the time of writing, Dogecoin is ranked in 8th position in terms of market capitalization rank and has a cap of just over $13 billion. Its market cap dominance is 1.508 percent.
Daily Transactions
Ethereum
In 2022, Ethereum averaged around 1 million transactions per day. On May 9th, 2021, it experienced its greatest amount of transactions in a day, when there were 1.7 million exchanges. This boom in transactions was caused by the growing popularity of NFTs that year.
Dogecoin
The number of daily Dogecoin transactions increased to roughly 50 000 in 2021. Despite this, this number can’t be compared to the number of daily transactions that other cryptocurrencies experience.
Dogecoin experienced its largest volume of transactions in 2014, when 104 000 transactions took place. In November 2016, it experienced a mere 6000 transactions on a single day, an all-time low in terms of daily transactions.
Block Size
Ethereum
Ethereum is not capped by the number of transactions per se; it’s blocked by the amount of gas. In other words, the block gas limit is Ethereum’s block size. Ethereum blocks have a limit of 30 million units of gas.
Dogecoin
Dogecoin has a 1-minute blockchain, and, much like Bitcoin, it has a 1-megabyte block size. This means that it can process around 40 transactions per second.
Similarities
- Ethereum runs smart contracts, as does Dogecoin.
- Ethereum and Dogecoin are both considered to be volatile.
- Both Dogecoin and Ethereum are open-source.
- Doge and Ethereum have an unlimited supply.
Differences
- Ethereum’s block size is based on gas, whereas, Dogecoin’s isn’t
- Ethereum is ranked 2nd in terms of market capitalization, and Dogecoin is ranked 8th
- Dogecoin experiences significantly fewer daily transactions than the Ethereum blockchain
- Ethereum’s programming language is more scalable than Dogecoin’s
- Ethereum has a much higher mining profitability than Dogecoin’s mining profitability.
- Dogecoin has significantly lower transaction fees than Ethereum’s transaction fees.
Risks
Ethereum
Ethereum is a well-established cryptocurrency; however, it still carries the same level of risk that you’d get with other cryptocurrencies. One of the main risks is centralization and governance. In order for Ethereum to serve its fundamental purpose, it has to remain a scattered network, but pushback from governments constantly looks to change this.
Dogecoin
A huge and somewhat obvious risk with Dogecoin is that it’s still only a meme currency and thus doesn’t have any practical use yet. On this basis, investors are much less guaranteed to see a measurable return on a Dogecoin investment.
Another risk with Dogecoin is that the rising supply could overwhelm the price in the short term.
Where to Buy
Ethereum
Ethereum has been a part of the crypto market for nearly a decade, so it’s widely available on a number of platforms:
- Coinbase
- Gemini Exchange
- Robinhood
- Crypto.com
- Binance
- SoFi
Dogecoin
Dogecoin doesn’t have the same availability as Ethereum but is still available on a number of major platforms:
- Coinbase
- Binance
- Kraken
Exchanging Ethereum for Dogecoin
Luckily a number of platforms facilitate users exchanging Ethereum for Dogecoin, and finding those platforms is usually a simple matter of doing a Google search. Additionally, unlike other digital currencies, Dogecoin has relatively low transaction fees.
You can exchange Ethereum for Dogecoin on platforms such as Changelly, SimpleSwap, and Bitni.
Future Plans
Ethereum
Given that it’s the second largest cryptocurrency, Ethereum’s creators are under a similar amount of pressure as the creators of Bitcoin, despite there being key differences between the two.
Following the Merge, sharding is evidently the plan for Ethereum. The aim of sharding is to reduce network congestion, thus increasing transaction speed, which, in turn, could improve smart contracts.
Dogecoin
Still widely considered more of a meme coin than a digital asset, Dogecoin still has a long way to go in terms of showing its worth.
Like most popular cryptocurrencies, processing power is a topic of discussion when it comes to Dogecoin. While it does have competitive fees, the speed at which transactions are completed is often complained about.
Given that the creators didn’t outline the internet meme coin’s path, it’s difficult to say where it’s going or whether there are plans to make it a better investment.
FAQs
What are externally owned accounts?
Much like with a personal account at a financial institution, an externally owned account (EOA) is associated with an external entity as an owner with interest in the account or has ownership of the crypto assets.
What are dApps?
Decentralized applications, often referred to as dApps, are digital applications or programs that are blockchain-based. Decentralized applications are very similar to normal applications in terms of look and function but run on a blockchain or peer-to-peer network and are thus not controlled by a single authority.
Who invented the Scrpyt algorithm?
The Scrpyt algorithm was created by Colin Percival and first published in 2009. It was specifically designed to make performing custom hardware attacks costly.
What is a decentralized network?
This refers to a network configuration in which there are multiple authorities that serve as a centralized hub for participants. In other words, information processing is distributed across several machines.
What is a hard cap?
A hard cap is a limit on the number of tokens a project puts into circulation. This is done as creators see this as a means to make their digital currencies more valuable. This also explains the reason why some projects have a yearly issuance limited to a certain number of coins and a fixed unlimited issuance.
Always remember that the price of cryptocurrencies is also attributed to how computers have to perform complex mathematical calculations to create coins.
Sources:
https://bernardmarr.com/blockchain-a-very-short-history-of-ethereum-everyone-should-read/
https://decrypt.co/resources/what-are-decentralized-applications-dapps
https://www.coingecko.com/en/coins/ethereum
https://decrypt.co/97939/robinhood-ceo-says-dogecoin-needs-bigger-blocks-internet-currency
https://cryptogeek.info/en/compare-coins/dogecoin-vs-ethereum
https://www.globaldata.com/data-insights/financial-services/dogecoins-price-history/
https://www.fool.com/investing/2021/05/21/better-buy-dogecoin-vs-ethereum/
https://originstamp.com/blog/ethereum-vs-dogecoin-whats-the-difference/
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