Bitcoin, Dogecoin or something else?
Time is everything in the investment world. Whether it is timing the market or the time spent in the market, it plays an important role. Coming to whether it is a good time to hold an investment in Bitcoin and Dogecoin, let’s analyze the difference between the two cryptocurrencies.
Bitcoin was created in the aftermath of the 2008 economic recession by an anonymous user named Satoshi Nakamoto. It is scarce by its design, philosophy, and nature. We can only have 21 million Bitcoin, not more or less than that. Today, there is already 18.7 million Bitcoin in circulation and by 2140 all the 21 million Bitcoins are expected to be mined.
On the other hand, 10,000 new Dogecoin are created at every block at the rate of roughly one block per minute. That is nearly 15 million Dogecoin being created every day, making it an infinite supply with more than 130.54 billion already in circulation.
When Satoshi Nakamoto created Bitcoin, he/she/they knew exactly what they were creating. The first peer-to-peer electronic cash system was created as an alternative to an inefficient, trust-based monetary system. Bitcoin, by all means, satisfied the criteria of a monetary system. It’s a store of value, a medium of exchange, and a transferable asset. The core idea is that money should be globally accessible, which anyone can buy, sell, store anywhere in the world.
On the other hand, Dogecoin was created by software engineer Billy Markus as a joke. It just took about three hours to make it, forking from the available Bitcoin source code.
While both Bitcoin and Dogecoin have a great community, the essence of community in Bitcoin is very different from that of Dogecoin. Bitcoin has been around for more than 12 years, and it has stood the test of time. Most of the Bitcoin owners are well informed about the technology and philosophy of the Bitcoin concept. Mostly, they are the ones who challenge the status quo and advocate for the technology that offers distributed open-source, decentralized monetary systems.
While the Dogecoin community is growing fast, that growth is credited to hype and trends. People with no understanding of the market want to take doge to $10, $100, and so on, which is realistically impossible. Lifestyle celebrities with no basic understanding of technology ask fans to buy doge and influence them, taking the market on a crazy ride.
So, is it the right time to hold an investment in Bitcoin and Dogecoin? It is you who decides!
But for anyone who has seen the success of Bitcoin since the last decade, it is based on a technology that can change our lives and not just the monetary system. Dogecoin is a baby product of Bitcoin. And most of the coins that have come into the market after Bitcoin have seen the same graph like that of Bitcoin. Dogecoin, if it wants to be popular and rule the crypto world, needs to offer something unique that none of the coins has ever offered to people. It is always better to stop asking questions and take action. There is no right answer.
More questions bring more confusion. It is always advisable to take baby steps, early actions, and invest what one can afford to lose.
Unlike gold, stock, or any other investment assets, Bitcoin is an accumulation game. The asset price is only going up on average and it can be proved by a simple supply-demand theory. The circulating supply of Bitcoin is getting lesser and lesser and there are already more than 100 million Bitcoin owners.
With its great fundamental philosophy intact, there is more and more demand which leads to price rise. The recent “The B-Word” virtual Bitcoin event witnessed a discussion between Jack Dorsey, Cathi Wood, and Elon Musk.
The entire conversation was based on why Bitcoin is taking over the world just like the Internet did three-decade ago and Elon Musk, the CEO of Tesla, SpaceX, went on to reveal that Tesla, SpaceX, and he himself own Bitcoin. The key message here is, big corporations and big whales are accumulating more, leaving behind the retail investors. So, if you are a believer in this technology, the right time to hold a Bitcoin investment is now.
While the future prices of any cryptocurrency are not predetermined, any wise investor should know where he/she is putting his/her money. Be it stock, real estate, business, crypto, or any investment, understanding the basic principle and philosophy is crucial. No one can be sure if tomorrow Dogecoin or Bitcoin can go up or down. What we know is about the technology, why, and how these coins were created. Having another cryptocurrency with infinite supply will become another fiat currency just waiting for inflation. Bitcoin may not be the best and far from perfect, but with its core principle intact, having a great community is surely a better bet to take on.