Ethereum

Better Buy: Dogecoin vs. Ethereum | The Motley Fool

In general, a cryptocurrency is a decentralized digital currency protected by cryptography. Most cryptocurrencies rely on blockchain technology and a community of miners to validate transactions, store data, and generate new tokens. Together, these qualities create a highly secure and widely distributed peer-to-peer financial system, eliminating the need for central oversight.

Since bitcoin became a phenomenon in 2009, thousands of other cryptocurrencies have appeared, many powered by different blockchains and designed for different purposes. Several of these, such as dogecoin (doge -5.00%) and ethereum (eth -2.22%), have caught the interest of investors.

Reading: Should i buy doge or ethereum

Notably, both Dogecoin and Ethereum have skyrocketed in value over the past year, gaining 18,400% and 1,400%, respectively. but to decide which is the better investment, we must consider the purpose and usefulness of both.

dogecoin

In 2013, Adobe Systems CMO Jackson Palmer tweeted these words: “Investing in dogecoin, I’m pretty sure it’s the next big thing.” at the time, dogecoin didn’t really exist and the comment was intended to make fun of bitcoin, while also referencing a popular shiba inu meme.

Still, the tweet caught the attention of ibm software engineer billy markus. One thing led to another, and eventually the pair brought the meme-inspired coin to life. In particular, Palmer later said, “Dogecoin, to some extent, is testing what happens when you have a more accessible pet as the face of your coin.”

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In other words, dogecoin was a marketing experiment. but beyond that, it was created without any real purpose. Still, the meme-coin caught fire in the reddit community, and it became common practice to tip users with dogecoin. that popularity persists today and has driven the price of the digital currency soaring.

regardless, dogecoin still has limited utility. yes, it is a currency, but you will probably find it difficult to spend. wirex recently partnered with mastercard to launch a crypto debit card, and visa has partnered with coinbase for the same purpose. but none of these cards support dogecoin. in fact, coinbase, one of the world’s largest cryptocurrency exchanges, doesn’t even allow users to buy dogecoin.

To add, fintech companies like square and paypal also support cryptocurrencies. In fact, PayPal recently launched Checkout with Crypto, a service that allows users to make purchases with Bitcoin and other digital tokens. however, none of these fintechs support dogecoin in any way.

ethereal

in 2013, vitalik buterin published the ethereum white paper at the age of 19, convinced that he could improve the “limited functionality” of bitcoin. the project was officially launched in 2015, two years after dogecoin.

Unlike bitcoin (and dogecoin), the ethereum blockchain was designed to be more than a record of transaction data. it was also built to support computer code, which is executed automatically when a transaction takes place. For example, a buyer and seller can create a digital contract, encoding the terms of the agreement on the ethereum blockchain. this “smart contract” is automatically executed when the terms are met, making the process more efficient for all parties involved.

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non-fungible tokens (nfts) are a good example. ethereum makes it possible to represent physical assets such as works of art as a digital token. when that token is purchased, ownership automatically transfers to the buyer; there is no need for supervision or third-party paperwork. In theory, this system could be applied to any valuable asset, from collectibles to real estate.

Today, Ethereum’s market value stands at $302 billion, well above Dogecoin’s $46 billion. Ethereum is also more widely adopted in terms of active accounts, and its mining profitability is much higher. All of these factors indicate increased demand, and demand is directly related to value.

a cautious verdict

Currently, the mining reward for each dogecoin block is 10,000 tokens, and the reward for each ethereum block is two tokens. Unlike bitcoin, there is no built-in mechanism to limit the supply of these cryptocurrencies.

This differs from assets like gold, which benefits from its scarcity. instead, the supply of dogecoin and ethereum will increase forever. So investors should ask themselves this question: is an infinite asset a good store of value?

In terms of which is the best buy, ethereum wins that contest. It benefits from increased demand, which has gained support from fintechs like PayPal, crypto exchanges like Coinbase, and various crypto debit cards. more specifically, the ethereum blockchain supports smart contracts and other decentralized applications, and that technology could be a disruptive force across industries.

See also: Tesla And Ethereum Billionaires Spark Shock 300 Billion Crypto Price Crash As Bitcoin And Dogecoin Suddenly Plummet

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