There was a stretch in 2021 when the price of Dogecoin (DOGE) skyrocketed from a fraction of a penny to a little more than $0.70 before falling again — drawing comparisons to similar spikes (and drops) in the price of Bitcoin (BTC).
But while BTC is still the biggest and most popular type of crypto, DOGE has remained a low-priced memecoin, known for its Shiba Inu logo. Yet it has remarkable staying power. As of August 29, 2022, DOGE was the 10th largest crypto by market cap, according to CoinMarketCap.
So, how do Dogecoin and Bitcoin actually compare? Here is a guide to some of the key differences between Dogecoin vs. Bitcoin.
5 Key Differences Between Dogecoin and Bitcoin
While both cryptocurrencies — and popular ones — Dogecoin and Bitcoin have some stark differences. Read on to see the five most pertinent, or see the chart below for a quick cheat sheet.
Dogecoin vs Bitcoin: Key Differences
|Intended purpose: Capitalize on meme popularity||Intended purpose: Act as digital cash|
|Market cap: $9.12 billion||Market cap: $413 billion|
|No limit on total number of Dogecoins||Hard limit on the quantity of eventual BTC|
|Less secure, but easier to mine||More secure, but more difficult to mine|
|Faster block time and transaction speed||Slower block time and transaction speed|
1. Purpose of the Coin
The two cryptos were created with different end-goals in mind.
Bitcoin’s creators developed it to function somewhat like digital gold. While Bitcoin can only handle somewhere around seven transactions per second (TPS), the total value transacted on the network far exceeds that of any other coin. In other words, people tend to choose BTC for payments involving large sums of money.
Some individuals also consider Bitcoin an investment — a view that has paid off in recent years, as Bitcoin has seen its value rise in a huge way. From March 2020 to July 2021, Bitcoin had risen by about 800%, generating incredible returns for those who were able to HODL through the volatility. Of course, the market sputtered in early 2022, and is slowly recovering. BTC’s price fell from roughly $48,000 to less than $19,000 between January and June 2022.
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Dogecoin (DOGE) launched in 2014 as a literal joke currency. Based on the famous meme of a Shiba Inu dog with grammatically incorrect phrases surrounding it — like “so wow,” “very style,” or “much like,” — DOGE had very little value for a number of years.
So, the meme-inspired Dogecoin began as a fun way for people to learn about cryptocurrency. A meme coin that traded at a price of a tiny fraction of a penny, people could send it to each other for educational purposes or as a niche hobby. Several online merchants now accept DOGE, although it’s not as widely accepted as BTC.
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2. Market Cap
There is no contest in terms of market cap when comparing the two coins.
As of August 25, 2022, Bitcoin’s market cap was about $413 billion, while the market cap of Dogecoin was just over $9 billion. Bitcoin is currently the largest crypto by market cap, while Doge coin ranks tenth.
For much of its history, DOGE ranked somewhere between the 30th and the 50th largest cryptocurrencies by market cap, if not much lower. But it broke the $1 billion barrier in early 2021, and its price breached the $0.01 mark shortly after.
Bitcoin has always been the largest cryptocurrency by market cap. With the longest history, the most secure network, and the most robust community of users and volunteer developers, other coins have not been able to compete for the top spot in the same way. When it comes to big-time investors looking to gain exposure to crypto with a lot of working capital, they tend to allocate most of that capital to Bitcoin, likely seeing the other options as too risky.
The supply and demand dynamics of Dogecoin and Bitcoin are extremely different as well.
One of Bitcoin’s properties that makes it so valuable is a deflationary monetary policy. That means that over time, the supply of Bitcoin decreases rather than increases — it becomes more rare, in other words. Every four years or so, the block reward for miners gets reduced by 50% in a process known as halving.
There’s also a limit on how much BTC will ever exist: There will only be 21 million Bitcoin mined.
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Dogecoin, on the other hand, has an inflationary monetary policy. There is no limit to the amount of DOGE that miners can create, although there’s an annual cap of 5 billion coins issued.
The DOGE blockchain stopped halving a long time ago, so the mining reward remains static at 10,000 DOGE per block. This means that people can keep mining Dogecoin in perpetuity.
4. Security, Tech Development
Before entering the mainstream crypto lexicon, Dogecoin’s Blockchain had a long period of stagnant development. Between the years 2015 and 2020, there wasn’t a single developer update to DOGE. But as of 2022, developers have been at work, and updates have been regular.
Dogecoin began as an almost exact clone of Bitcoin with a few minor changes, and it remains a close replica, but there’s a large difference in security between the cryptocurrencies.
The Bitcoin network is more secure than the Dogecoin network by many orders of magnitude. The hashrate of DOGE is around 540 TeraHash per second (TH/s) while the hashrate of BTC is more than 238 ExaHash per second (EX/s). One TeraHash equals one trillion hashes while one ExaHash equals one quintillion hashes.
Why is this important? It means that conducting a 51% attack against Dogecoin would be relatively simple compared to conducting the same attack against Bitcoin. A 51% attack is when someone takes control of a network by owning the majority of hashing power.
This difference is because the DOGE Blockchain uses a different mining algorithm than Bitcoin’s, which is partly why DOGE is faster and easier to mine. While Bitcoin uses the SHA-256 algorithm, DOGE uses the Scrypt algorithm.
5. Block Time and Transaction Speed
Speed is the one area where Dogecoin has an advantage over Bitcoin, since the DOGE blockchain processes transactions more quickly and inexpensively than BTC transactions.
The DOGE blockchain processes a new block of transactions every minute. The BTC Blockchain processes a block every 10 minutes. While this might make DOGE more desirable as a means of exchange, it is less desirable as a store of value.
Because DOGE miners receive 10 times the block rewards compared to Bitcoin miners, a higher supply of new Dogecoins entering the market may drive down the price. However, if investor demand is strong, the price of Dogecoin may not necessarily go down.
How Are Bitcoin and Dogecoin Alike?
Despite the myriad differences between Bitcoin and Dogecoin, the two are more similar than you might think. A big reason for that is because, as discussed, Dogecoin started out as a copy of Bitcoin, but has since kicked off the training wheels, so to speak.
But for how the two remain alike? For one, they rely on similar blockchain software and networks. They also have similar proof-of-work consensus methods, which means that miners are involved in validating blocks on those networks. And on a broader scale, both Bitcoin and Dogecoin are cryptocurrencies that are used to transact and store value.
Granted, Bitcoin’s value is, and likely will remain, much greater than Dogecoin, but they are still a store of value nonetheless.
Is Dogecoin the Next Bitcoin?
There’s no way to predict the future, so no one can say for sure. But, it would be difficult for Dogecoin to overtake Bitcoin as the mainstream cryptocurrency of choice. Bitcoin remains dominant as the market leader in the crypto space, and there’s little to indicate that Dogecoin or any of the other altcoins could meaningfully chip away at that advantage. At least for the foreseeable future.
Despite having risen to be among or around the top 10 cryptocurrencies by market cap (depending on the swings in the market), Dogecoin is still a meme coin. Don’t forget: It launched as a joke nearly a decade ago, and little has changed since then, other than some celebrity endorsements, and a brief 15 minutes of hype.
Cryptocurrency traders who want to make a lot of small, frequent transactions may prefer Dogecoin to Bitcoin because of its faster confirmation times and lower fees, but Bitcoin Lightning also works for this purpose.
By opening a SoFi Invest brokerage account and then setting up a crypto trading account, you can trade Bitcoin, Dogecoin, and other altcoins such as Ethereum, Cardano, or Litecoin. You can use the app to manage your crypto holdings as well as stocks, exchange-traded funds (ETFs), IPO shares, and more. SoFi doesn’t offer a crypto wallet or staking, but you can trade dozens of different types of crypto 24/7 from the convenience and security of the SoFi Invest app on your phone or laptop.
Is Dogecoin better than Bitcoin in any way?
The primary advantage that Dogecoin has over Bitcoin is speed — but that speed also comes with a cost, as the DOGE network tends to be less secure overall than Bitcoin’s.
Is Bitcoin more secure than Dogecoin?
Yes, the Bitcoin network is more secure than the Dogecoin network. That’s largely due to the constant upgrades and technical progress made on Bitcoin’s network over the years, and a lack of similar progress, for a long stretch, on the DOGE network.
Is Dogecoin going to be the next Bitcoin?
In all likelihood, no. Dogecoin’s value has fallen considerably from its highs, and it still lags well behind Bitcoin in terms of market cap. For instance, for Dogecoin to get to $100 would be quite the feat. That said, anything can happen, and nobody knows what the future holds!
Photo credit: iStock/Ksenia Raykova
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