It’s hard to say exactly how many Dogecoins are in circulation, as many have likely disappeared due to issues like lost wallets or people sending coins to the wrong address. But according to CoinMarketCap data, there were about 131.6 billion DOGE in existence at press time.
That number is constantly going up, since a new block gets processed on the DOGE network every minute, and each block reward contains 10,000 new DOGE. That means 10,000 new Dogecoins appear every minute.
Does Dogecoin Have a Limit?
There is no limit to how many new Dogecoins miners can create, although its creators had an initial goal of keeping about 100 billion coins in circulation at a time.
The idea was that by keeping the supply inflationary, people would have an incentive to spend Dogecoins. Since items in high demand with a scarce supply tend to rise in value, while anything with low demand and high supply tends to fall in value.
That said, Dogecoin has been an outlier as of late. For a brief period, due to much fanfare and many celebrity endorsements, the demand for new Dogecoins exceeded the new supply being created, leading to rapid price increases. For this to continue, people would have to keep purchasing Dogecoins faster than new ones are being created, a highly unlikely scenario.
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Here are four things to consider when thinking about the supply of Dogecoin and other altcoins.
Dogecoin Has an Unlimited Supply.
Since there’s no cap on the supply of new DOGE, the price has a ceiling on it. There will always be new coins being dumped onto the market, and unlike Bitcoin, that new supply will never decrease.
For DOGE to maintain its value, then, there has to be new money coming in that at least matches the new coins being created. This can only be sustained for so long. The general tendency for the price of Dogecoin will be to go down, due to these supply and demand dynamics. That makes crypto traders more likely to spend DOGE than to HODL it.
Of course, there can be exceptions to the rule. A wave of celebrity endorsements with millions of social media followers can bring in a flood of new money, bidding up prices. This has typically preceded a crash in prices. For example, DOGE prices collapsed by about 70% in just two months following the May 2021 high of $0.69, bottoming out at $0.17 before bouncing back slightly.
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DOGE is Easier to Mine Than Most Cryptocurrencies
Miners receive block rewards for DOGE every minute. That’s compared to once every ten minutes on the Bitcoin network.
This means that solo miners have ten times the odds of finding a block on their own when mining DOGE as opposed to mining Bitcoin or any other coin with 10-minute blocks. DOGE mining pools also wind up with greater rewards, can potentially charge miners lower fees, and have lower transaction costs.
DOGE network mining also tends to be easier than many other proof-of-work coins. Currently, the DOGE network has a hash rate of 207 Terahash per second (TH/s).
By comparison, Bitcoin has a hash rate of 124 Exahash per second (EH/s).
A terahash equals one trillion hashes per second, while an exahash equals one quintillion hashes per second. In other words, the current hash rate of the Bitcoin network is more than 500,000 times higher than that of the Dogecoin network.
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This makes the barrier to entry for mining DOGE much lower than mining Bitcoin. Whenever DOGE rises in price, more people are likely to mine it, and eventually dump their new coins on the market. Without a constant supply of new money piling into DOGE, the price will fall.
Doge Has Little Technical Development
For much of its history, Dogecoin development has stagnated. Between the years of 2015 and 2018, the cryptocurrency had zero development updates. By comparison, Bitcoin’s code is updated almost every day.
In 2015, Dogecoin co-founder Jackson Palmer stepped away from the project, calling the crypto industry “toxic.” Since then, not much has been done with the code that underlies Dogecoin.
The most recent update was Dogecoin Core 1.14.3, released in February 2021. Before that, November 2019 was the last major upgrade. All in all, there have only been two significant updates to Dogecoin in the last six years.
The Supply of DOGE is Highly Centralized
A huge portion of existing Dogecoins are held by a small group of crypto wallets. One address holds about 27% of all available DOGE. The top 20 addresses hold more than 50% of the entire supply. It’s possible some of the large wallets could belong to Dogecoin mining pools or crypto exchanges, but no one knows for sure.
There are more than 130 billion DOGE at the time of writing. That number will continue to rise at a rate of 10,000 per minute forever. Dogecoin’s creators decided to let the currency be an inflationary one to encourage DOGE “tipping” and other transaction-based uses.
If you’re interested in investing in DOGE or other cryptocurrencies, now that you understand how its supply works, a great way to get started is by opening an account on the SoFi Invest brokerage platform. You can use the platform to invest in cryptocurrencies as well as stocks or exchange-traded funds.
Photo credit: iStock/Irina Vaneeva
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