This:

use strict;
use warnings;

# @data contains the (chomped, lower-cased) entries
# from a 70K dictionary file (2076 words beginning with 'j')

my $count;        # Or whatever: this can check algorithm validity
foreach my $item ( @data ) {
   compare( $item, $_  ) and $count++ for @data;
}
print $count;

sub compare {
   return 0 unless length $_[0] == length $_[1];
   my $diff = 0;
   for ( 0 .. length $_[0] ) {
      $diff++ if substr( $_[0], $_, 1 ) ne substr( $_[1], $_, 1 );
      return 0 if $diff > 1;
   }
   return 1;
}

[download]

is very much faster than your original code.

Surprisingly(?), initial testing seems to show that it is also considerably faster than any of the replies you have hitherto received using bitwise XOR.

I haven't got the time to do any precise benchmarking at the moment: however, since you need the "fastest solution on Earth", I shall leave that up to you

In reply to Re: Tell whether two strings differ at only one position by Not_a_Number
in thread Tell whether two strings differ at only one position by rg0now

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