Since 2009, when Bitcoin first launched, there has been a gradual proliferation of new cryptocurrencies. Bitcoin may still be the best-known, but there are plenty of more recent arrivals, including Litecoin, Ethereum, and Dagcoin.

Many people assume that the different cryptocurrencies and the technology they’re backed by are all more or less the same, but this is far from the truth. In this article, we will look at the key differences between Ethereum and Dagchain. We’ll also talk about the pros and cons of each, along with their different uses.

What Is Dagchain?

Dagchain is the technology that backs our cryptocurrency Dagcoin. It was created in response to some pain points that arose with blockchain technology. Over the course of this article, we’ll get into more detail on how Dagchain operates, and how it differs from blockchain technology, more precisely Ethereum.

What Is Cryptocurrency?

Cryptocurrency is the general term for a digital currency that uses encryption to allow for secure financial transactions. Instead of being backed by a government and a system of banks, cryptocurrency is backed by a decentralized computing network.

In its simplest form, cryptocurrency can be described as a secure and anonymous method of payment that can be sent directly from person to person, without going through a bank. Cryptocurrency operates as a virtual accounting system, or ledger.

Cryptocurrency has been praised for decentralizing financial transactions and bypassing currency controls. However, some cryptocurrencies have also come under fire for making it easier for criminals to evade the law; critics say that cryptocurrencies have been used in money laundering, Ponzi schemes, and as payment for illegal goods and services. Cryptocurrencies have also been criticized for creating investment “bubbles.”

Both Dagcoin and Ethereum (or, more accurately, “Ether”) are cryptocurrencies, which means that they make use of a similar “distributed ledger” system. However, they were created with different uses in mind, and differ significantly in the details of their design. In particular, unlike Ethereum, Dagcoin does not use blockchain.

What Is Ethereum?

Ethereum was created in 2015 by Vitaly Buterin, a Russian-Canadian programmer who was also a co-founder of Bitcoin Magazine. Like Bitcoin, Ethereum is based on blockchain technology. However, Ethereum uses technology for different purposes.

Bitcoin uses blockchain technology to facilitate person-to-person payments and to keep track of the ownership of its currency. As mentioned, Ethereum does host a cryptocurrency called Ether, but it is probably best known for hosting smart contracts. Smart contracts rely on blockchain technology to enforce agreement terms. For example, a smart contract could be set up to automatically transfer currency to one party once another party has received a specified good or service.

Ethereum is also known for the Ethereum Virtual Machine, or EVM, which makes the process of building blockchains easier and faster than ever before. The technology allows for thousands of applications to be used on one platform.

That platform lets developers create a range of decentralized applications, or “dapps.” This has implications for everything from loans to voting systems – everything that’s now run using intermediaries could potentially be run by a decentralized app instead.

Problems with Ethereum

Like any computing network, Ethereum is potentially vulnerable to attacks. And, because of the anonymous nature of blockchain technology, Ethereum is also vulnerable to misuse by bad actors. The technology has been allegedly abused repeatedly in order to create Ponzi schemes.

In 2018 a dapp called 333 Eth – one of the most popular dapps at the time – was accused of being a Ponzi scheme. It promised its users a lifelong return on their investment and took an 11% cut from its investors, which it said would be used for marketing.

333 Eth isn’t the only dapp to be accused of running a Ponzi scheme on the Ethereum network. WoWH 3D, Fomo 3D, and FOMO Short were also described as Ponzi schemes loosely masquerading as games.

What Is Dagcoin?

Dagcoin is substantially different from Ether, Bitcoin, and other cryptocurrencies. We launched it with the goal of creating a decentralized cryptocurrency for use in developing countries. The idea was to help remedy the problems caused by falling currency power and take back power from big banks.

We acknowledged that the public had come to see cryptocurrency as a dangerous get-rich-quick scheme. That’s why we launched Dagcoin; its aim is not to act as a commodity for trading but to serve as an actual currency. Its value is protected from speculative fluctuations because it is based solely on the size of the Dagchain network.

How Is Dagchain Different from Ethereum?

Dagchain attempts to address some of the problems that have come up with blockchain technology:

  • Lack of scalability
  • High cost of proof of work
  • The need for miners

Dagchain was created to be faster, more easily scalable, and more egalitarian than blockchain technology.

A blockchain is a series of “blocks” of data that are formed by bundling together many transactions. Those blocks are then joined together into a “chain.” In a Dagchain, each separate transaction forms its own block. The blocks are linked to multiple previous transactions to form what’s known as a directed acyclic graph, or DAG.

Dagchain technology does not have a need for miners tasked with confirming transactions. Instead, Dagchain makes each new network member responsible for confirming at least one previous transaction.

This means that Dagchain lacks the kind of two-tier systems found in many cryptocurrencies, which generally privilege certain groups (usually miners). It also means that there’s an incentive to keep the Dagchain operating quickly, since each new user needs to confirm a previous transaction in order to add their own transaction.

Dagcoin Complies with KYC and AML Regulations

Dagcoin complies with anti-money laundering and anti-corruption laws designed to protect people from the kinds of crimes that cryptocurrencies have historically been known to facilitate. Dagcoin complies with AML and KYC regulations and has government cryptocurrency licenses.

The Takeaway

Dagchain and Ethereum differ significantly in their uses and purposes. Ethereum is very useful for creating smart contracts and running corporate bureaucracy.

Dagchain, on the other hand, is intended to host a normal currency, Dagcoin, which is intended for everyday use. It differs from Ethereum in its use of Dagchain technology and its compliance with government regulations. Because of the system’s speed, it is also scalable and unlimited in scope.

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