Dogecoin vs. Bitcoin: An Ultimate Comparison (2024)

A comparison of Dogecoin and Bitcoin may seem a little odd from certain vantage points. After all, Bitcoin, the world’s first cryptocurrency, started off with the mission to challenge the existing global financial order. Its objective was to use the power of decentralization to free the economy from the clasp of the banking system. Dogecoin, on the other hand, is a meme-themed coin that started off as a deliberate joke.

Dogecoin has outgrown its “just-another-meme-coin”status to emerge as a crypto with potential, as highlighted by many, including Elon Musk. Besides, it has been financially rewarding for investors, just as Bitcoin has been. So, a comparison between the two on both the technical and economic fronts would be all but normal.

What is Bitcoin (BTC)?

Before we get any further in the Dogecoin vs. Bitcoin comparison, let’s first quickly skim through what both these assets are all about.

As you may already know, Bitcoin (BTC) was created in 2009 by an elusive creator who goes by the pseudonym Satoshi Nakamoto. To this date, nobody seems to know who the person or group behind that pseudonym is — although there are speculations and even misleading claims that could give you secondhand embarrassment.

At its core, Bitcoin is built on a pretty simple concept. It is a decentralized digital money or asset that can be sent or received peer-to-peer (p2p) over the internet. And by “decentralized,” we mean it is independent of any third party, including central banks and governments.

Bitcoin is nothing like anything that came before, evident by the massive Bitcoin adoption, including digital payment services such as PayPal or Venmo, which still depend on the legacy financial infrastructure for facilitating transactions. Its key properties can be surmised along the following points.

Key characteristics of Bitcoin

• Each transaction involving BTC is recorded and tracked on the Bitcoin blockchain using blockchain technology.
• A blockchain is similar to a bank’s ledger, i.e., a comprehensive log of customers’ funds, where it is coming in from and going out, etc. The Bitcoin blockchain also records every translation ever made using BTC. The only difference is that a blockchain is digital and decentralized, which means it is distributed across the entire network. All participants in the network are collectively in control of it (rather than any single company, government, or entity). That makes it practically immune from any effort to rig, manipulate, or assume total control over the network.
• Because Bitcoin is decentralized, any two people, regardless of their whereabouts, can send BTC to one another directly without involving a bank or other financial institutions. Bitcoin, therefore, is at the very core of peer-to-peer transactions.
• Bitcoin’s total supply is capped at 21 million, which makes it an inherently deflationary asset.
• You do not necessarily have to buy an entire bitcoin to add the asset to your portfolio. You can buy just a fraction of one.

What is Dogecoin (DOGE)?

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Dogecoin was launched in 2013 as a joke by software developers Billy Marcus and Jackson Palmer. They were online buddies from Reddit but had never met each other in person.

Marcus and Palmer combined two of the most popular online trends 2013 — the still new but ascendant cryptocurrency Bitcoin and the popular “Doge” meme featuring a Shiba Inu. However, to their surprise, DOGE became almost an instant hit among a good chunk of crypto enthusiasts and investors from all over the world.

In fact, it took the meme-themed coin’s website (www.dogecoin.com) less than a month to score its first 1 million hits. Despite its beginning as a joke, DOGE is a full-fledged cryptocurrency with its own blockchain and mining system.

A big part of DOGE’s initial success can be attributed to a very active Reddit community. The Dogecoin subreddit was teeming with subscribers who would send DOGE back and forth to keep the transaction volume up. They would also share and exchange information on DOGE while encouraging fellow crypto enthusiasts to join the DOGE community.

Also, for the vast majority of the coin’s existence, DOGE was priced at just a fraction of the penny. The relatively low price of the coin, coupled with its abundance, also helped fuel adoption.

What gives DOGE value?

The value of all assets — digital or conventional — is determined by market dynamics. DOGE is not an exception to that reality, and its value is inherently based on supply and demand.

However, unlike Bitcoin, which is by design a deflationary asset due to its limited supply, DOGE has no such hard cap. Therefore, its demand has to be constantly on the up for it to sustain (and grow) its value. While DOGE has been historically stuck at a fraction of a penny, a real breakthrough came in early 2021 when the price jumped around 7,000%.

What was even more striking is that retail investors alone caused that massive spike after the world’s richest person, Elon Musk, started showering praises on Dogecoin (sometimes at the expense of Bitcoin).

And now that we have the basics out of the way let’s quickly delve into the similarities between the two coins, something that is important for any cryptocurrency comparison explainer.

Similarities between Dogecoin and Bitcoin

The initial development of Dogecoin was based on a lot of copied source code from the core chunks of Bitcoin, Litecoin, and Lucky Coin.

To put things into perspective, Dogecoin is a Lucky Coin fork, which is a fork of Litecoin, which in turn, is a Bitcoin fork. So, you could say that Dogecoin’s source code has copious similarities with that of Bitcoin. On that count, both these cryptocurrencies have a lot in common.

Both these coins use the proof-of-work (PoW) consensus mechanism. Simply put, PoW is a form of validating transactions, adding new blocks of transactions to the blockchain, and mining new coins by undertaking the mining process. The word “work” in PoW refers to the task of generating a hash (or a long string of characters) that matches the target hash for the current block. The miner who first finds this hash earns the right to add that block to the blockchain and earn block rewards.This element is what underlines the very existence of the blockchain technology.

Both Bitcoin and Dogecoin have two primary use cases — to transact value and to serve as a store of value. You could use both to make payments for goods and services at crypto-friendly merchants that accept BTC and DOGE. Alternatively, you could also invest in them and hold them over time.

The major differences between Dogecoin and Bitcoin

The key differences between the two coins include:

Dogecoin vs. Bitcoin: Purpose of both coins

As already mentioned earlier, the foundational objectives of both assets were the polar opposite. While Bitcoin aspired to make a real-world impact by making the global financial order fair, inclusive, and democratic, Dogecoin at launch was just a fun project.

No doubt, DOGE has evolved since and is now ranked among the top cryptocurrencies by popularity and market cap. However, due to the nature of its origin, it still has some serious distance to traverse before being as “mainstream” as, say, Bitcoin or Ethereum. For example, going by the numbers, the vast majority of institutional investors would still prefer investing in Bitcoin rather than investing in a meme coin like DOGE.

Dogecoin vs. Bitcoin: Market Capitalization

At this point, it is not even a contest. Bitcoin is way ahead of DOGE in terms of market cap.

As of June 2024, BTC has a market cap of about $1,500 billion. The gap between the two was even larger for most of DOGE’s history — especially prior to the early 2021 boom when it started hitting one high after another. Before that, DOGE had not even touched the $1 billion mark.That said, DOGE being the smaller of the two, has more room for growth, and it is possible that the gap between the two would become smaller over time.

Dogecoin vs. Bitcoin: Transaction time

Transaction time is one aspect where DOGE far outshines BTC. The average transaction processing time in the Dogecoin network hovers somewhere around 1 minute. In comparison, the average transaction time or rather the transaction speed by the Bitcoin network can be as high as 10 minutes, although it can sometimes stretch up to an hour or more.

Also, being a lot more popular than its counterpart, the Bitcoin network sees more traffic and, therefore, is prone to network congestion.

Dogecoin vs. Bitcoin: Supply

The supply-demand dynamics of the two coins are also as different as their market cap or transaction times.

Bitcoin is a fundamental deflationary asset, which means its supply decreases over time. With a lowering supply, the asset’s demand should theoretically grow, which then paves the way for a spike in its price.

There will only be a total of 21 million BTC in existence, of which around 19.2 million are only in circulation. The supply of new BTC (block rewards) reduces by 50% every four years via an “event” known as “halving.” More on that in a bit.

Meanwhile, DOGE follows an inflationary monetary policy due to its (theoretically) infinite supply.

Dogecoin vs. Bitcoin: Halving

A Bitcoin halving event occurs every four years, following which the reward for mining BTC reduces by half. The point of halving is to reduce the fresh supply of coins in a phased manner until the last BTC to enter circulation is mined in 2140.

The last Bitcoin halving event occurred on May 11, 2020, reducing the block rewards from 12.5 BTC to 6.25 BTC. This event follows the pattern of previous halvings in 2016 and 2012, associated with a notable increase in the Bitcoin price. The next Bitcoin halving will occur in 2024, reducing the block reward, which is likely to influence the market due to the reduced supply of BTC.

In contrast, the Dogecoin blockchain has ceased its halving process, meaning miners continue to receive a constant reward of 10,000 DOGE for each block they mine. This ongoing reward system is set to continue indefinitely, differentiating Dogecoin from Bitcoin, where the supply becomes more limited over time.

Dogecoin vs. Bitcoin: Encryption

The proof-of-work consensus mechanism in the Bitcoin network follows the SHA-256 standard. For those out of the loop, the U.S. National Security Agency (NSA) created the SHA-256 standard in 2001. It has since been counted among the most advanced encryption methods.

Dogecoin, meanwhile, utilizes the Scrypt hash method — the same encryption standard you will find in the Litecoin network. While Scrypt is not as state-of-the-art as SHA-256, it compensates for that shortcoming by making mining more accessible to the average user.

This is why mining Dogecoin is much easier and less expensive than mining Bitcoin.

Dogecoin vs. Bitcoin: Security

Prior to joining the big leagues of the crypto space, Dogecoin had a relatively quiet period during which development came to almost a standstill. In fact, it had a grand total of zero (0) developer updates between 2015 and 2020.

However, by 2022, the DOGE community started seeing many more development activities. As a result, updates are now coming a lot more regularly than ever before. Despite sharing a lot of Bitcoin’s codebase, the security in the Dogecoin network is not quite as tight as that in Bitcoin.

For perspective, the Dogecoin blockchain has a hashrate of 540 TeraHash per second (TH/s) — that’s 540 trillion hashes per second.The corresponding figure for the Bitcoin blockchain, meanwhile, is a whopping 238 ExaHash per second (EX/s) or 238 quintillion hashes.

This is crucial because the stark difference between the hash rates in both networks means it is comparatively a lot easier to carry out a 51% attack on Dogecoin.

For those out of the loop, a 51% attack refers to a scenario wherein a single user or entity takes control of the blockchain network by owning most of its hashing power. At that point, the attacker becomes the de facto controller of the network.

Bitcoin vs. Dogecoin compared

Dogecoin or Bitcoin: Which is a better investment?

As we move through 2024, it’s clear that both DOGE and BTC present unique benefits and drawbacks. DOGE continues to offer quicker transactions, while Bitcoin remains unmatched in its proven track record as a reliable investment option. Looking at the current scope, the potential for growth in both cryptocurrencies remains significant. Recent analyses have pointed towards an optimistic future for DOGE, with predictions suggesting a potential increase of up to 800% by 2025. Similarly, optimistic projections for BTC’s long-term value continue to surface, indicating a strong belief in its continued appreciation.

However, it’s crucial to approach these predictions with caution. DOGE and BTC are known to be highly volatile, which is why it’s important to conduct thorough research and consider your risk tolerance before making investment decisions.

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