Over the few years, cryptocurrencies have gained enough hype and are evolving into the next go-to financial system. Bitcoin is one of the oldest and most valuable cryptocurrencies currently in the crypto market space, ranked #1 and priced at $42,279.79 as of writing.
According to CoinMarketCap, there are currently 18,383 cryptos in circulation with a total market cap of $1,930,795,487,566. Among the top 20 cryptocurrencies and currently, the talk of the town is the Dogecoin. Bitcoin has the distinction of being the first cryptocurrency, while Dogecoin was started seemingly as a joke.
These two digital currencies are blockchain-based digital assets having similarities and several notable differences and unique properties that make them market favourites.
This article will provide an overview of both cryptocurrencies, the similarities and differences between them, and the adoption of either of them.
What is Bitcoin?
Bitcoin, launched by an unknown individual that goes by the pseudonym of Satoshi Nakamoto, is considered the first cryptocurrency developed using blockchain technology and dated back to 2009. It is the most popular crypto coin, ranking #1 with a market cap worth $807,725,480,696. It works on a peer-to-peer basis and is handled through a blockchain-based network that acts as an open-source ledger. It uses the Proof-of-Work (PoW) algorithm as its consensus mechanism and rewards miners for processing transactions on the bitcoin network.
Being the first cryptocurrency, Bitcoin has faced many challenges before being recognized by entrepreneurs, people in business, government officials, etc. Bitcoin is now considered an independent currency and an alternative payment method to government-issued currencies. Thanks to its origin, thousands of different digital currencies are currently circulating in the market.
What is Dogecoin?
On the other hand, Dogecoin is a meme coin started as a joke back in 2013 by Billy Markus and Jackson Palmer. At the creation time, the main aim was to make a cryptocurrency, unlike Bitcoin, which sounded friendly and straightforward. As the coin’s logo, Dogecoin features a meme of a Shiba Inu, a Japanese dog breed popular at the time of its origin. Essentially, Dogecoin was created by copying core chunks of Bitcoin, Litecoin, and Lucky Coin’s source code, with a few tweaks. At the time of writing, the price of one DOGE is $0.1278, with a market cap of $16,956,954,865.
Bitcoin vs Dogecoin: Similarities and Differences?
The table below illustrates a quick comparison between the two cryptocurrencies.
Bitcoin vs. Dogecoin: Market Cap, Supply, and Concentration
Both Dogecoin and Bitcoin have significantly different supply and demand dynamics.
The total supply of Bitcoin is hard-capped at 21M. At the time of writing, currently, we have 18,992,650 BTC circulating in the market, leaving behind a minimal value before the mining stops for good. Bitcoin has a deflationary monetary policy. Over time, the supply of Bitcoin decreases rather than increases. Every four years or so, the block reward for miners gets reduced by 50% in a process known as “the halving.”
This allows the coin to have a relatively high value and respond effectively to the demand and supply theory. Limited supply (scarcity) and high demand have led Bitcoin to a higher value, currently at around $43,899.65 on the 24th of March, 2022. Bitcoin reached its all-time-high value of $68,789.63 on the 10th of November, 2021. The All-Time-Low value of 9 years was $65.53 on the 5th of July, 2013.
Both cryptocurrencies, Bitcoin and Dogecoin, exist in the form of a digital ledger called the blockchain. Blockchain is responsible for recording all of the transactions happening on the network. Both cryptos use the Proof-of-Work consensus algorithm. To mine a coin, miners compete against each other to find solutions to mathematical problems. All these problems hold information for coin transactions and use cryptographic hash functions. Solving each problem rewards miners in the form of small amounts of cryptocurrency. High-performing computer hardware is required to perform mining.
Mining Bitcoin requires high electrical power and powerful hardware capabilities. As a result, 65% of Bitcoin’s miners are in China because of the access to cheap electricity and hardware components. This makes it unfair to users around the world. The coin is so concentrated that the top 2% of its users currently hold 95% of Bitcoin’s supply.
On the contrary, Dogecoin has a market cap of $17,986,244,312. It already has a circulating supply of 132.67B DOGE. What distinguishes Dogecoin from Bitcoin is that Dogecoin has an unlimited supply of tokens, i.e., there is no pre-defined limit on the number of total tokens to be minted; that is, it has an inflationary monetary policy. However, an annual cap of 5B coins can be issued. The DOGE blockchain stopped halving long ago, so the mining reward is fixed at 10,000 DOGE per block. The unlimited supply of Dogecoin makes it widely distributed, available, and affordable to almost everyone who wishes to use it. It was designed to keep people from hoarding and make it well distributed in the market. The coin currently stands at $0.136 as of 24th March 2022. Regarding concentration, over 65% of Dogecoins are distributed among just 98 wallets across the world, while the single largest wallet holds 28% of all Dogecoins.
Bitcoin will likely remain the largest coin by market cap, although the speed with which some altcoins like Dogecoin have climbed the ranks has been remarkable.
Bitcoin vs. Dogecoin: Mining and Transactions
Bitcoin mining is a very high maintenance task that requires costly investments. It involves high electricity power and powerful computers and takes a long time. A new block in Bitcoin is confirmed every 10 minutes, whereas it takes only 1 minute for Dogecoin. You can find a detailed analysis of mining comparisons here.
Additionally, being a Bitcoin miner will not remain beneficial after the supply limit is reached, as then the only rewards left for miners will be the transaction charges. On the other side, Doge offers an annual supply of $5B, which is much more profitable for miners in the long run.
Essentially, Bitcoin is a decentralized network that does not charge any transaction fee. However, in the Bitcoin network, miners must verify the transactions and mine a new block of the verified transactions. Transactions on the Bitcoin network are real-time. The only delay that occurs is due to this verification process. Therefore, to speed up the verification of their transactions, people pay a tip to the miners, known as the miner fee. Nevertheless, a mandatory fee is only charged if you involve any third party in the transaction, like an exchange.
On the contrary to this, Dogecoin has a very different approach to handling transactions. As of 2018, it charges a fixed fee of 0.0035 DOGE/byte, i.e., 1 Doge/kilobyte of data transferred. This leads to average charges of 1.77 Doge ($0.241) per transaction.
Bitcoin vs Dogecoin: How Transactions Take Place
On the Bitcoin network, the transactions from one wallet to another take place in a very secure manner. The transaction has to be recorded on the blockchain when an amount is transferred. After being registered on a Bitcoin block, the record for the transaction is added to the digital ledger. This is why bitcoin miners play an essential role in the completion of any transfer.
A Bitcoin transaction requires three confirmations before it can be considered complete, and the receiver can spend the amount. The first confirmation comes when the transaction is added to the block, and then the following confirmations are from every block that adds it. The transferred amount is only spendable once it has received all three confirmations.
In the case of a Dogecoin transaction, the number of confirmations required is variable. This change occurs due to the changing requirements of the receiving address. Any address that requires two confirmations will most likely complete transactions faster than an address that requires 4. Coinbase requires 60 confirmations for Doge, whereas Kraken demands 40.
This 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 10x the block rewards compared to Bitcoin miners, a higher supply of new Dogecoins entering the market tends to drive down the price.
Bitcoin vs Dogecoin: Scalability
Bitcoin suffers from scalability problems in slower transactions per second rate; micropayments are difficult to make, payments are not instantaneous, etc. Nevertheless, to overcome the hurdle of slower and expensive transactions, a layer-2 scalability solution by Lightning Network has been introduced for the Bitcoin network targeted to facilitate atomic swaps and micropayments.
The Lightning Network is connected to the Bitcoin blockchain, existing as a layer on top of it and benefits from Bitcoin’s security protocols. Users can then choose Bitcoin’s main blockchain for bigger transactions and the Lightning Network’s off-chain for smaller ones without worrying about safety. The Lightning Network payment channels also provide private transactions.
On the other hand, Dogecoin has a transaction rate of 33 transactions per second (tps), which is way faster than the 5-7 tps rate of Bitcoin. As of now, Dogecoin does not appear to suffer from the scaling issues related to block times and can handle 10x the volume of other coins without any issues. Its blocks are not full, and there is plenty of room to grow. Additionally, the Dogecoin network can make blocks larger or implement the Segwit and Lightning systems.
Its faster block time reduces the risk of double-spending attacks. Also, its network’s transaction fees are unrelated to the amount transferred, unlike Bitcoin, whose fees rise steadily to warrant hard forks.
Bitcoin vs Dogecoin: Security and Tech Development
There was a long period of no development until Dogecoin’s recent burst of activity. From 2015 to 2020, there wasn’t a single developer update to Dogecoin. In 2021, developers proposed several upgrades, one of the important ones being the capability of smart contracts.
Dogecoin began as an almost exact clone of Bitcoin with a few minor changes, and it remains a close replica. Still, there is a significant difference in security between the two.
The Bitcoin network is more secure than the Dogecoin network by many orders of magnitude. The hash rate of Dogecoin is less than 416 TeraHash per second (TH/s), while the hash rate of BTC is more than 120 ExaHash per second (EX/s). One TeraHash equals one trillion hashes, while one ExaHash equals one quintillion hashes.
The hashing rate holds significant importance as this means that conducting a 51% attack against Dogecoin would be relatively straightforward compared to Bitcoin. A 51% attack is when someone takes control of a network by owning the majority of hashing power.
This difference is because Dogecoin uses a different mining algorithm than Bitcoin. It is also the reason why Dogecoin is faster and easier to mine. While Bitcoin uses the SHA-256 algorithm, Dogecoin uses the Scrypt algorithm.
Bitcoin vs Dogecoin: Smart Contract Programmability
Dogecoin currently does not support smart contracts. However, the idea is under development and would possibly roll out by 2022.
On the contrary, the Bitcoin network supports a wide range of smart contracts using its powerful scripting language, called Script. The script allows users to establish criteria for their bitcoin to be spent, and Bitcoin transactions lock specific amounts of bitcoin to these scripts. A user must satisfy these criteria to spend the bitcoin locked to the script. In this way, all Bitcoin transactions can be referred to as smart contracts.
Even though Script has proven helpful in powering the Bitcoin network for over a decade, it is not Turing Complete, i.e.; it does not allow for logical loops. This feature helps keep the Bitcoin network safe from Denial of Service (DoS) attacks that are prominent in other cryptocurrency networks.
Types of Bitcoin Smart Contracts: Bitcoin’s most popular script type is Pay-to-Public-Key-Hash (P2PKH) which allows bitcoin to be sent to a Bitcoin address such that only the owner of the corresponding private key can spend the bitcoin. More complex smart contracts are also possible using Bitcoin Script, and infinitely many are possible on additional layers. Other script types include
Taproot Upgrade & Bitcoin Smart Contracts
Taproot was officially activated on 15th November 2021 at the block height of 709,632. The Taproot upgrade consists of three separate upgrade proposals. However, at its core, the upgrade introduces a new digital signature scheme called “Schnorr” that will help bitcoin transactions become more efficient and more private and can be leveraged to let bitcoin users execute more complex smart contracts.
The upgrade further introduces a new script type called Pay-to-Taproot (P2TR), which unites the functionality of P2PKH and P2SH scripts, allowing bitcoins to be sent to both a public key and arbitrary scripts. However, while P2SH and P2WSH allowed bitcoin to be sent to a single script, P2TR uses Merkelized Alternative Script Trees (MAST) to enable bitcoin to be sent to up to 2^128 different arbitrary scripts. Any one of these scripts can be satisfied to spend the bitcoin.
The upgrade gives Bitcoin users significant flexibility in constructing complex smart contracts on the bitcoin chain. It also enables efficiency and privacy gains for Lightning Channels, a type of smart contract.
All smart contracts mentioned above are executed on Bitcoin’s blockchain as regular Bitcoin transactions. However, bitcoin can also be spent and used to power smart contracts on additional layers like Lighting Network.
Bitcoin vs Dogecoin: Volatility
Despite all the factors, the one thing that remains common in both coins is volatility. You can never be sure what is more likely to rise in value and what will drop. So, you need to be aware that investing in Bitcoin could mean huge amounts of money losses (as well as gains).
Dogecoin currently stands as a safe option because of the small investments required to mine or purchase assets.
But you must not expect Doge to reach the same level in value as Bitcoin soon. As per Elon Musk, Doge is expected to reach a value of $1 and become a highly usable and distributed asset in the market.
Who’s more robust in terms of Adoption?
At Dogecoin’s launch, its creators expected their meme project to fall off after a short period. However, Dogecoin gathered a significant community over the Reddit social media platform. The Dogecoin subreddit became a go-to place for fans sending DOGE back and forth, sharing information on Dogecoin, and pulling-in new users into the Dogecoin community.
In 2021, Dogecoin gained significant attention after Elon Musk expressed his support for the coin. An increase in accessibility means traditional investors might be more likely to put money into Dogecoin. The increased popularity of Dogecoin has led to developers working on a scalability and security update, which is set for release in 2022.
Nevertheless, because of its high volatility compared to Bitcoin, Dogecoin is still seen as more of a meme by many in the crypto community. It is not considered an excellent long-term investment.
On the contrary, Bitcoin is the first of its kind that had to face multiple challenges before getting widespread acceptance as an alternative currency for everyday tasks. It has transitioned from strict opposition in 2009 to becoming one of the most hot-topics and common means of payment in 2022. In Italy, Bitcoin stands as the third most frequently used payment method. Besides peer-to-peer real-time money transfers, it is also for purchasing villas, getting COVID tests, paying taxes, and even dental services.
Because of the mass adoption of Bitcoin, other altcoins like Dogecoin are fully benefiting from the situation and can become mainstream for different payment methods. Along with the world-renowned basketball team, Dallas Mavericks, over 48 other businesses and retailers accept payments in the form of Dogecoin.
According to CoinShares, Bitcoin adoption has increased at an annual rate of 113%. While 2021 kicked off with Tesla and MasterCard joining the party with crypto payments and adoption, BTC drove growth in the second part of the year, effectively outperforming Ether (ETH) adoption. In the run-up to El Salvador’s Bitcoin legal tender bill, August 2021 was an outstanding month for adoption, as shown in the graph below.
Additionally, more countries are expected to adopt Bitcoin as legal tender in 2022. It is further estimated that with mass adoption, Bitcoin is expected to hit $100,000 this year. The year 2021 saw the launch of several bitcoin-linked exchange-traded funds. By the time 2021 came to an end, over $900B was in the ETF market. Bitcoin ATMs are installed in many countries in the world. Currently, there are approximately 37,301 installed across multiple countries, with about 32,594 installed only in the USA.
Bitcoin vs Dogecoin: Store of Value and Price Prediction
On a broad spectrum, any object that can retain its purchasing power into the future and can be readily exchanged for anything else is known as a store of value. In other words, a store of value:
- It should be worth the same or more over time.
- Must be exchangeable with anything else (such as gold or fiat currency).
Bitcoin as Store of Value
Due to its mass adoption and high price, Bitcoin is considered a store of value and has outperformed to become the best performing liquid asset of the last decade. Bitcoin demonstrates some currency attributes, but its primary source of value lies in its restricted supply and increasing demand.
Another important factor is its decentralized and purely digital nature which makes Bitcoin simultaneously everywhere and nowhere, making it difficult to seize or steal yet trivially easy to “take with you”. This empowers people to store value independently of third parties, eliminating the associated third-party risks.
Nevertheless, high volatility is one of the risks involved and is one of the main arguments against bitcoin as a store of value. Massive 50%+ drawdowns are not uncommon in Bitcoin, while price swings tend to be much more gradual for other stores of value.
Bitcoin Past Price Analysis
According to PricePrediction, the current price of Bitcoin is $44,380.46, and BTC is currently ranked #1 in the entire crypto ecosystem. The circulation supply of Bitcoin is 18,994,431 BTC, with a market cap of $842,981,618,457.
In the past 24 hours, the crypto has decreased by -0.31% in its current value. If we compare the current market cap of the BTC with yesterday’s, you can see that the market cap is also down.
For the last seven days, the BTC was in a promising upward trend and increased by 6.32%. Bitcoin has shown powerful potential lately, and this could be an excellent opportunity to dig right in and invest.
Bitcoin Future Price Analysis
|Year||Minimum Price||Average Price||Maximum Price|
Dogecoin as Store of Value
Dogecoin may be used for payments and purchases, but it’s not a very effective store of value. This is mainly because of no lifetime cap on the number of Dogecoins that may be created by mining, i.e., by design, the cryptocurrency is highly inflationary. The blockchain rewards miners for their work by creating millions of new Dogecoins every day, making it very challenging for speculative price gains in Dogecoin to hold up over time.
Dogecoin Past Price Analysis
According to PricePrediction, as of 26th March 2022, the current price of Dogecoin is $0.13 and is ranked #12 amongst all the cryptocurrencies. The circulation supply of Dogecoin is 132,670,764,300 DOGE with a market cap of $17,648,152,538.
In the past 24 hours, the crypto has been decreased by -1.88% in its current value. If we compare the current market cap of the DOGE with yesterday’s, you can see that the market cap is also down.
Dogecoin Future Price Analysis
|Year||Minimum Price||Average Price||Maximum Price|
Is Dogecoin the Next Bitcoin?
It would be difficult for Dogecoin to overtake Bitcoin as the mainstream cryptocurrency of choice. Bitcoin has 98% of the hashing power of all proof of work coins, and there’s little to indicate that Dogecoin or any of the other altcoins could meaningfully chip away at that advantage.
Bitcoin vs Dogecoin: Which one is right for you?
Both Bitcoin and Dogecoin have their pros and cons, and hence there can be no definitive answer as to which cryptocurrency is the best. Nevertheless, there is certainly an answer for which amongst two is the right choice for you.
It’s important to understand that both Bitcoin and Dogecoin have yielded impressive returns for their investors at different times despite their price differences. In 2021 alone, Dogecoin ranged from less than $0.001 to around $0.68, providing early investors with quite the profit. Remember that the pump in the Dogecoin was due to support shown by Elon Musk, and it not because of any technological developments. It is somewhat challenging to say if Dogecoin can gather the same appreciation in price again unless there is mass acceptance of the coin.
Furthermore, the consistently pumping of new coins into the Dogecoin network further devalues the asset over time. Devaluation could mark a potential downside in Dogecoin’s future to many investors. On the other hand, Bitcoin is designed to increase in value over time due to the scarcity of the coin credited to the limited total supply. Whether or not Bitcoin’s value will continue to rise is based on demand, but the asset’s potential is no denying.
Remember that Dogecoin is a meme; hence, there is little in terms of a long-term philosophy coded into the Dogecoin network, especially considering diggers’ constant pumping out of more DOGE. However, the community has taken over the Dogecoin project despite Markus and Palmer’s intent. With scalability and security upgrades in Dogecoin’s future, the community can validate the existence of DOGE.
Overall, based on the price history of either project, Dogecoin appears to be more of a short-term investment for many, while Bitcoin is a long-term investment. Historically, the numbers point toward Dogecoin as a short-term investment and Bitcoin as a long-term one. However, the situation for both networks can always flip based on future news and developments.
Despite having risen among the top 20 cryptocurrencies by market cap, Dogecoin is still a meme coin. It launched as a joke seven years ago, and little has changed since then, other than some celebrity endorsements. Cryptocurrency traders who want to make small, frequent transactions may prefer DOGE to Bitcoin because of its faster confirmation times and lower fees. Still, BitcoinLightning Network also works for this purpose.