The past year and a half have been a boon for every crypto investor that was patient enough to go through the crypto winter of 2018-2019. Bitcoin, Litecoin, and Dogecoin are three of the most coveted cryptocurrencies on the market, and all three have been registering incredible gains in this bull run. However, to the untrained eye, all of these cryptocurrencies might seem similar. It can make it quite challenging for the uninitiated to see the real value behind these coins and decide which one suits their portfolio.
For the reasons above, we created this short post comparing BTC vs LTC vs DOGE. We will explore the basics behind each crypto and explain some of its characteristics, pros, and cons. In the end, you will be able to tell the famous currencies apart and make your choice whether you are investing in the long, mid, or short term perspective.
What Is Bitcoin?
Bitcoin is the original cryptocurrency that was released back in 2009. Created by Satoshi Nakamoto, the main goal of Bitcoin was to become a digital peer-to-peer payment system that could be accessed by anybody in the world without the need for any intermediaries.
Bitcoin was made possible by blockchain technology, a decentralized ledger of transaction records. As such, BTC was the first global decentralized currency in the world. Over the years, this crypto has moved away from the decentralized payment network concept to becoming one of the best stores of value known to humanity. Some of its main characteristics are:
- Bitcoin has a capped max supply of 21 million coins; 18.5 million are already in circulation. It means that once this cap is reached, no more new Bitcoins can be created.
- A new Bitcoin block can be created approximately every 10 minutes.
- Bitcoin undergoes a reward halving every 4 years. The mining algorithm that creates new Bitcoins undergoes halving, and fewer Bitcoins can be created. Currently, miners receive 6.25 BTC for each block mined and the next halving is expected to happen in 2024.
- Bitcoin uses the SHA-256 mining algorithm for the validation of transactions and the issuing of new coins.
The limited cap and halving increase the scarcity of Bitcoins over time, and, therefore, its value.
What Is Litecoin?
Litecoin is considered to be the first alternative cryptocurrency to Bitcoin. It was created to complement Bitcoin rather than replace it.
Released in 2011, Litecoin was supposed to be a lighter, faster version of Bitcoin. It’s referred to as “the silver to Bitcoin’s gold”. To achieve this, Litecoin uses a different mining algorithm called Scrypt, which is supposedly more democratic and easier to solve than Bitcoin’s SHA-256. More specifically:
- Litecoin blocks are solved 4x times faster than BTC. Meaning that each block of transactions takes approximately 2.5 minutes to be solved.
- Litecoin’s reward also undergoes a halving every 4 years. Currently, miners receive 12.5 LTC for their efforts.
- Litecoin has a limited max supply of 84 million coins. While the cap is 4x that of Bitcoin, LTC still follows a deflationary model.
What Is Dogecoin?
Dogecoin was released in 2013, and was considered to be a joke. Its creators wanted to create a cryptocurrency that was cheap and easy to use, mocking the overtly serious feeling of other coins. As such, they made a fork of Litecoin, borrowing the Scrypt algorithm, and used the popular Doge meme as the coin’s symbol.
The meme coin is unique in its own way:
- Dogecoin doesn’t have a limited supply. This means that over time, the market will be flooded with DOGE coins.
- Dogecoin’s block reward grants 10.000 DOGE each minute.
- Dogecoin can be mined with Litecoin ASICs, as it uses the same Scrypto algorithm.
With that said, due to Elon Musk’s hype bandwagon, its popularity has literally exploded lately, driving the doge to btc value to new heights.
Bitcoin vs Litecoin vs Dogecoin – Which One to Choose?
Of course, everyone would like to know the best cryptocurrency to choose from when investing their hard-earned money. However, the answer to this question is not as straightforward as it seems. Here’s what we can conclude:
- Bitcoin has the largest number of users and is the most established coin on the market. As such, its network is, by far, the most secure. Additionally, its increasing scarcity makes it a sound store of value. However, transactions are slow and not recommended for daily use.
- Litecoin is a cheaper, faster Bitcoin. While its value is nowhere near to BTC, it has remained in the top 20 for a decade, proving that it has a good following and usability.
- Dogecoin is fundamentally weak and its inflationary model plays against it in the long term. However, its price is often subject to price spikes, which might help you increase the value of your portfolio considerably.
Hopefully, this short post helped you differentiate these top 3 cryptos and decide which one might make it into your portfolio, in case you wish to invest in these appreciating assets.