Dogecoin and Cardano have both gained major attention in 2021. Both chains are wildly popular and could potentially be very relevant moving forward.
For Dogecoin, the chain is aiming to provide seamless payments using the token. Cardano is aiming to use its chain for a global DeFi alternative. Both are multi-million dollar market cap cryptocurrencies worth the hype.
Dogecoin is based on the popular internet meme “doge”. The token was trading below $0.001, but skyrocketed to $0.70 in May 2021. This was largely in part to Tesla CEO Elon Musk tweeting that Dogecoin is his favorite cryptocurrency. This caused the price to rise over 10,000% in the span of weeks.
For the most part, Dogecoin’s price is driven by the media and celebrities. Dallas Mavericks owner Mark Cuban also relayed his support of DOGE, furthering the price increases. Much of the price fluctuation is driven by the opinions of others.
Smart contracts are a way for blockchains to host computer programs. They use code to automate tasks, such as transactions or programs. Smart contracts use a variety of unique coding languages to power the functions: Cardano uses Plutus, Marlowe and Glow coding languages. Smart contracts are automatic and cannot be reversed.
Cardano utilizes smart contracts on its network in a similar way to Ethereum and Solana. Cardano allows users to create smart contracts to add to the chain. These projects then go through a peer review process, so that all ideas are looked at before entering the network.
Cardano recently released a programming language called “Haskell”. Haskell allows non-experts in the programming field a chance to contribute to the chain.
Currently, Dogecoin and Cardano use different methods to verify transactions. Cardano uses a proof of stake system. This means that owners of ADA can lock up their funds in staking pools to verify transactions. Those who stake their position are given the chance to earn block rewards, which are a portion of the transaction fees. However, in a proof of stake system, block rewards can only be given to 1 person.
To combat this, stakers can place their ADA into staking pools. Staking pools use collective funds to increase the chance of earning block rewards. They then distribute the block rewards to those who place funds into the pool. Funds in staking pools are locked and cannot be sold until removed from the pool. This helps prevent fraudulent activity on the chain.
Dogecoin uses a proof of work system to verify transactions. Users on the chain can provide computing power to verify which transactions are legitimate. Those who use computing power to verify transactions are referred to as “miners.” Miners do not need to own any of the tokens in order to mine.
Proof of work uses massive amounts of energy, whereas proof of stake uses very little in comparison. The way rewards that are given differ between the 2 models of verification.
Market capitalization refers to the amount of money that is invested in the asset. DOGE is currently trading around $0.20 with a market capitalization of around $30 billion. ADA is currently trading around $2.00, with a market capitalization of around $70 billion.
Purely in terms of market cap, DOGE has more room to grow as it has less money currently invested in it. However, ADA could have more room for growth in terms of applications. DOGE is mainly used for payments, and ADA is looking to assist in research, finance and social issues.
Dogecoin and Cardano differ in terms of current adoption. DOGE is currently accepted as payment by many major institutions, such as the Dallas Mavericks and Newegg. AMC CEO Adam Aron also suggested that DOGE could be used as payment in the near future for the entertainment company. Many other large companies are also considering DOGE as a form of payment.
Conversely, Cardano has had minimal adoption. This is mainly because the smart contracts on its chain are not yet fully functional. However, it has been used in Ethiopia to store education data for millions of school children. Once the smart contracts become fully functional, expect to see the adoption of many more instances like this.
DOGE is mainly used as a form of payment. Apart from this, its uses are somewhat limited due to the nature of the chain. It does not offer smart contracts, so it cannot store data. However, it is accepted as payment at over 1,700 retailers worldwide. This number may grow if the token becomes more popular.
Cardano uses smart contracts to store data and automate tasks. However, these features are not yet fully ready to be used. Once they are fully functional, they can offer a variety of uses. One case is in the agriculture industry.
Cardano aims to provide services to farmers that allow them to track their crops and make interactions with supply chain more efficient. While this may not be the most profitable use, Cardano has a major focus on sustainability and social impact.
ADA and DOGE are immensely popular, both ranking in the top 10 by market capitalization. Because of this, it is fairly easy to purchase the tokens. It is offered on a majority of crypto brokerages.
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As of right now, DOGE has more room to grow in terms of market cap and current use cases. It also has more growth potential due to the reliance on media. If Elon Musk or another celebrity makes a statement praising DOGE, it could see further price surges.
Cardano does not currently offer as many uses as Dogecoin, but it very well could in the future. Once Cardano’s smart contracts are fully functional, the chain can be used in a variety of scenarios.
In early October 2021, the Biden administration stated that they may pursue regulation in the crypto sector. This is to address the risks associated with the currencies, specifically stablecoins. With billions of dollars in stablecoins, the U.S. is looking to protect the assets and reduce the risk imposed on its citizens.
Despite talks of regulation, the U.S. is still very focused on being a leader in the crypto sphere. Many government officials believe there is a future in crypto and want the U.S. to lead to the charge.
The 2 projects are not easy to compare. They are not competitors and look to offer different services. Cardano is focused on scalable smart contract integration, and Dogecoin is focused on being a payment processor.
However, DOGE may not be a good store of value as there is no max supply and 10,000 coins are minted every minute. This means that your individual share of DOGE is constantly diluted. Cardano may also not be a good store of value either.
If it cannot deploy its smart contract system, it will not be able to make much of an impact within the industry. However, if the projects can find applications and uses, there is an upside yet to be seen.