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All reviews are prepared by our staff. Opinions expressed are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including any rates, terms and fees associated with financial products, presented in the review is accurate as of the date of publication. SHARE: Yuriko Nakao/Getty Images August 30, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Kenneth Chavis IV is a senior wealth manager who provides comprehensive financial planning, investment management and tax planning services to business owners, equity compensated executives, engineers, medical doctors and entertainers. Bankrate logo The Bankrate promise
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Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our investing reporters and editors focus on the points consumers care about most — how to get started, the best brokers, types of investment accounts, how to choose investments and more — so you can feel confident when investing your money. Investing disclosure: The investment information provided in this table is for informational and general educational purposes only and should not be construed as investment or financial advice. Bankrate does not offer advisory or brokerage services, nor does it provide individualized recommendations or personalized investment advice. Investment decisions should be based on an evaluation of your own personal financial situation, needs, risk tolerance and investment objectives. Investing involves risk including the potential loss of principal. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Though it’s been a rough 2022 for cryptocurrency, these digital currencies remain a popular investing option, as traders speculate that is the “must catch” wave of the future. Some of the most popular digital currencies include , Ethereum and (perhaps surprisingly) Dogecoin. While cryptocurrencies typically have a few things in common, what are the differences between these three popular cryptos? Quite a lot actually, and here are some of the biggest distinctions. What cryptocurrencies have in common
Cryptocurrencies are built using what’s called technology, which uses a distributed ledger to produce, track and manage a digital currency. Think of it like a running digital receipt of all the transactions in the currency, including a list of who owns which currency and how much. This “receipt” is being constantly verified by a decentralized network of computers, helping to prevent fraud and ensuring the proper functioning and accounting of the currency. Cryptocurrency is “mined” by powerful computers called miners that perform complex math calculations to create coins. They also earn coins by processing transactions of the currency. , and literally any number could be created using similar blockchain technology. Cryptocurrencies allow the user to move money semi-anonymously, though the FBI and IRS are getting better at tracking transactions and freezing accounts. Key differences among three popular cryptocurrencies
Cryptocurrencies can be created for many different purposes, and each may occupy different parts of the crypto universe. The table below sums up some key differences among Bitcoin, Ethereum and Dogecoin, each of which has a distinct purpose and maximum number of coins. Bitcoin Ethereum Dogecoin Symbol BTC ETH DOGE Year developed 2009 2015 2013 Initial purpose Created to be used as a currency or store of value Created to sell processing power of the decentralized network Created as a joke spoof of Bitcoin and the Approximate market capitalization* $382 billion $189 billion $8.2 billion Number of coins* 19.1 million 122.2 million 132.7 billion Maximum number of coins 21 million Unlimited, but issuance is fixed Unlimited, but yearly issuance limited to 5 billion coins * Estimated value as of August 30, 2022, according to data from CoinMarketCap. Purpose of the cryptocurrency
Each of these three cryptocurrencies was created for a different purpose. Notably, was a satire on the rising popularity of Bitcoin and the doge meme featuring a charismatic . Meanwhile, Bitcoin and were created for more serious purposes, including actually facilitating transactions or acting as a store of value. Market capitalization
The market capitalization of each consists of the total extant coins multiplied by the current trading price, and there’s a wide divergence. Bitcoin is the largest, with Ethereum trailing a distant second and Dogecoin among the top 10, according to CoinMarketCap. Traders cluster around the most popular cryptocurrencies and volume drops significantly below the top 20. While these currencies may be among the most popular for traders, Bitcoin is the one that’s emerged among the mainstream. It’s becoming easier to access Bitcoin, with that piggyback on existing apps such as or . Of course, traders can also turn to . Coin issuance
It’s also useful to note how many coins can be issued in each cryptocurrency. Many traders have flocked to Bitcoin because of its hard limit on issuance, just 21 million. If money continues to flow into Bitcoin and demand rises, this fixed limit virtually ensures that the price will rise over time. While that may be good for traders, the volatility makes Bitcoin harder to use as a currency. In contrast, Ethereum’s issuance is unlimited, but it has a fixed issuance schedule, which may slow the production of new coins. Meanwhile, the production of Dogecoin is unlimited, which is part of the joke. That unlimited issuance didn’t seem to stifle the currency from skyrocketing in 2021, rising from about a half-penny a coin on Jan. 1 to more than $0.60 in May. However, the coin trended downward through the course of 2021 and well into 2022. Bottom line
If you’re considering trading cryptocurrencies, it’s valuable to understand that they’re not all created equal. Some features such as Bitcoin’s limited issuance may make a currency more attractive than others, at least over a longer period of time. But in the short term cryptocurrency is driven by sentiment, so even something created as a joke and with unlimited issuance may rally hard if a swell of interest sweeps in. “Much wow,” as a famous doge meme might say. SHARE: Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money. Kenneth Chavis IV is a senior wealth manager who provides comprehensive financial planning, investment management and tax planning services to business owners, equity compensated executives, engineers, medical doctors and entertainers. Related Articles