Bitcoin vs Dogecoin: A Detailed Comparison

Bitcoin and Dogecoin are two distinct crypto projects, yet they share numerous similarities. Doge is a derivative cryptocurrency developed based on the slightly modified Bitcoin protocol. 

In this article, we will delve into the key differences between BTC and DOGE, assess the investment viability of these cryptocurrencies, and determine which one offers superior profitability potential. In addition, we will outline the main points that investors should pay attention to when trading crypto and considering these digital currencies as investment prospects.

Major Takeaways

• While there are some technical differences between Dogecoin and Bitcoin, they are relatively minor. Their structure is built on similar blockchain networks.
• Both Bitcoin (BTC) and Dogecoin (DOGE) can be mined; however, due to differences in their encryption algorithms, their mining equipment is incompatible.
• While Bitcoin is generally considered safer and more secure in terms of investment, Dogecoin can offer higher returns due to its elevated volatility.
• The Bitcoin network is slower than that of Dogecoin, which makes the latter a more cost-effective solution for making transactions.
• Bitcoin has a limited maximum supply, which means that 21 million coins will ever exist in its lifetime. Therefore, its value tends to appreciate over time, making it a sound long-term investment. In contrast, DOGE has an unlimited maximum supply.
• Bitcoin’s exorbitant market capitalization makes it almost impossible to manipulate its price. As for Dogecoin, Elon Musk’s influence on this crypto is notable, as his single post on X can pump the DOGE price.

Should I Invest in Bitcoin or Dogecoin?

When it comes to cryptocurrencies, I often hear the same questions: What should I choose to invest in? Does it make sense to buy Bitcoin, or is it too late? What do you think about DOGE and another “dog coin,” Shiba Inu, which Elon Musk pumps from time to time?

In this section, we will try to answer some of these questions and explore the similarities and differences between BTC and DOGE, their origins, and most importantly, the potential investment opportunities they present in the crypto market.

The Origins of Bitcoin and Dogecoin 

We should probably start with Bitcoin, the world’s first cryptocurrency. Its blockchain is still shrouded in mystery, as its creator’s identity is not publicly known. Bitcoin was created in 2008 by a person or group of people under the pseudonym Satoshi Nakamoto.

Many in the crypto community believe that Hal Finney was most likely Satoshi Nakamoto, either independently or with a team of like-minded peers. As for me, I find this version close to the truth.

In my opinion, the creation of the first digital currency was hardly without the involvement of intelligence services or even more powerful elites. The protocol is too well thought out for decades to come! But we’ll discuss this conspiracy theory a bit later.

Now, let’s say a couple of words about Dogecoin and find out what it is and where it came from.

Dogecoin was created as a meme coin in 2013, five years after the launch of Bitcoin and the birth of blockchain as a public financial technology. It was created by software engineers Billy Markus and Jackson Palmer. By the way, one of them worked at Adobe.

What is really amazing is that they created this coin in just a few hours using the code of the Bitcoin protocol. Since BTC has an open-source code, anyone can take it and use it to build their own blockchain, which is exactly what Markus and Palmer did.

They were quick to say it was just a joke and that the coin was not backed by any assets. They were basically just mocking the idea of blockchain, the whole “bitcoin system,” and showing the absurdity of people giving value to digital coins that, in their opinion, are only good for the darknet.

However, they overlooked one crucial aspect: the value of any currency, whether fiat or crypto, is derived from people’s perception that it can be used for purchasing goods and services.

Two years after launching the project, Palmer and Markus stepped back from management and entrusted Dogecoin to the community. According to the official version, in 2015, Markus sold all his assets in DOGE at the market price in order not to influence the market with his “primary” stocks of coins obtained at the launch of the network. However, this does not exclude the fact that he might have another, non-public wallet, but for us, it is not so important after all.

Development of Dogecoin and Bitcoin

DOGE and Bitcoin have both covered a long way and have been in the market for over 10 years. During this time, the cryptocurrency market witnessed a lot of significant events.

The Bitcoin price has grown from just $0.2 to being considered “digital gold,” with a price over $100,000! Even the earliest crypto fans could not have imagined such a rapid surge.

For example, about 9 years ago, Laszlo Heinitz, a famous Bitcoin enthusiast from the US, ordered two Papa John’s pizzas for 10,000 BTC to prove that Bitcoin was actually a means of payment. It was one of the first transactions in the history of cryptocurrencies.

He later said he did it a few more times and spent about 50,000 BTC on pizza. At today’s rates, he could have bought the whole Papa John’s chain — and maybe even a couple of Domino’s!

The Dogecoin price has also seen rapid increases and dramatic plunges. In 2020, it surged by a staggering 12,000%, and over the next six months, it lost about 92% of its value. Today, the price of DOGE is trading around $0.40.

Meanwhile, here is an amazing fact: Dogecoins were used to pay for the creation and launch into space of a small satellite called DOGE-1.

Now, let’s talk about the big cheese behind this meme: Elon Musk. I believe that he was the main catalyst of that 12,000% pump in 2020. Today, Musk continues to push DOGE to the moon, simply posting a meme or hinting at another integration.

A couple of years ago, he said Tesla would accept Dogecoin as payment for its products, and now he is already talking about SpaceX accepting DOGE for a flight into orbit. Only time will tell if he keeps his promises.

These two digital currencies started off in completely different ways. BTC started as the first digital asset designed to be the basis for a new financial system and digital economy. DOGE initially debuted as a joke as a way to show that anyone, regardless of their experience, could create their “bitcoin” in a matter of hours, implying that crypto cannot cost as much as we believe. However, what do we have now? We have two heavyweight projects with millions of users worldwide, a strong community, and colossal capital!

Bitcoin and Dogecoin as Investment Vehicles

Now, let’s take a look at both assets from an investment perspective. At first glance, it may seem that they are technically quite similar. In fact, Dogecoin even outperforms Bitcoin in some aspects, such as transaction speed and commissions. However, when it comes to investments, there is a gulf between the two.

Bitcoin can boast massive liquidity obtained through Bitcoin ETFs. It has some major investments from such financial titans as BlackRock and Fidelity. By the way, these companies do not invest in projects without hedging and deep risk analysis. Thus, Bitcoin attracts enormous amounts of money.

As a result, even the largest banks and institutional investors have begun to consider Bitcoin as an investment vehicle. Moreover, US President Donald Trump said he would establish official government cryptocurrency reserves with Bitcoin as the main asset. In addition, El Salvador’s state reserves are already mostly BTC.

As you can see, even a conservative investor should think about adding Bitcoin to their portfolio.

Obviously, DOGE cannot boast the strength and stability that BTC has. Even though it is constantly backed by the world’s wealthiest person (as of this writing), this is not enough to pique the interest of long-term investors.

If you can tolerate drawdowns and are not afraid of high volatility, DOGE can be considered a speculative asset. You can buy it on a pullback and hope for growth in the next bull run phase. Personally, I would not call it a solid investment, as it is more of a long-term speculation driven by hype and the Dogecoin community.

After all, substantial profits always come with high risks. Even if Bitcoin hits $1 million, that is “only” about 1,000% of its current price. However, if you are lucky and the wind of hype blows in the right direction, Dogecoin can bring you 5,000%, and even 10,000% simply because its market cap is many times less than that of Bitcoin, and DOGE is much easier to pump.

At the same time, you probably would not want to use DOGE as a long-term store of value, since it is not as stable as BTC. Dogecoin is widely perceived as a meme on steroids. Its price can skyrocket sharply, but it could also plummet as swiftly.

Key Differences Between Dogecoin and Bitcoin

At this point, we can conclude that the basic differences between Dogecoin and Bitcoin lie in their origins, image, and investment appeal.

Now, let’s dive a little deeper into the technical details and compare BTC vs. DOGE in this regard.

Maximum Supply

First, let’s take a quick look at the scale of these projects. How many coins can be created in the market?

The maximum issue of Bitcoin is strictly limited to 21 million BTC. There will never be more BTCs than this amount, as it is programmed into the blockchain code. Since BTC mining gets more complex, it is getting harder and harder for miners to create new coins. Right now, more than 90% of the coins have already been mined. It’s like trying to mine gold. Those gold nuggets that have been closer to the surface have already been dug up, and now you have to go dig deeper to find the remaining stockpiles. The long-term value of Bitcoin, like gold, has the potential to grow against limited supply and growing demand. At the same time, it is crucial to navigate your Bitcoin investment journey with confidence.

The opposite is true for DOGE as it has no ceiling on issuance. The supply can keep going up as long as demand does. However, DOGE is created at a fixed rate of about 5 billion new coins a year.

This makes Dogecoin more like fiat money, which is also issued as needed. The idea is that it will stay in circulation and available, but it has a significant downside. Like fiat money, DOGE is exposed to constant inflation. As a result, the value of the coin tends to decline over time if there are no signs of demand for it.

Transaction Speed and Costs

The next important parameter is transaction time and cost.

Bitcoin’s average transaction verification time is about 10 minutes. On average, the fee is about $4.70, but it can increase as the BTC price soars and the network gets busier. The higher the price per coin, the more expensive block processing becomes, and the more you have to pay to cover the cost of space and processing on a blockchain network.

On the flip side, Dogecoin’s transaction time is usually around one minute, and the fee is just around $0.001. Even if the network sees an increase in activity, the fee will remain small because DOGE can be “diluted” by issuance, which only slightly increases transaction costs.

The analogy is apt: transferring money from a bank card is faster and cheaper than transferring a bar of physical gold.

Security

When it comes to security, both projects are pretty much neck and neck. They both use the Proof-of-Work (PoW) protocol, meaning they need mining to operate and create a stable and distributed network.

Dogecoin was actually based on Bitcoin’s open-source code, and a lot of its structure is similar. So, there are no major differences in security architecture.

On top of that, Dogecoin shares mining power with Litecoin through the merged mining mechanism, which also makes it more resistant to attacks.

When it comes to protection against hacking, double spending, and other technical threats, both blockchains are pretty reliable. The issue of trust here is not about the code, but more about how each cryptocurrency is seen by the community and institutional investors.

Unique Features

What makes Bitcoin really special is its incredible security and scarcity. In some ways, these features make it even closer to the concept of “real currency” than the US dollar.

Why is that? The US dollar is issued by the government, and it can print more if needed. They can just print more dollar bills and pour them into the economy whenever they want. That simply is not possible with Bitcoin.

If you want to get BTC, you either have to spend time, computing power, and electricity to mine it, or buy it on an exchange from those who have already mined it. However, there is no way anyone can just print new BTCs whenever they want. This makes it a truly scarce asset resistant to manipulation.

Unfortunately, Dogecoin does not have this unique characteristic. It is not like Bitcoin, where new coins are limited and cannot be easily created. Dogecoin is always being printed, and new coins are being created every year.

Approximate Current Market Capitalization

As of writing this article, Bitcoin’s market cap is about $1.97 trillion, while Dogecoin’s capitalization is $55.3 billion, almost 35 times less, but it would be unfair to compare these cryptos directly. Bitcoin has limited issuance, while DOGE has unlimited supply.

On paper, you could increase the amount of DOGE in the market by 50 times tomorrow, and its market cap would officially surpass Bitcoin’s if the price remains the same. However, it’s impractical because you will trigger a market meltdown if you try to sell that many coins.

Similarities Between Bitcoin and Dogecoin

Let’s recap: what do Bitcoin and Dogecoin have in common?

1. Technically, their blockchains are very similar, as DOGE was created from a fork of Bitcoin.

2. Both coins have value and can be used as a means of payment. Bitcoin is officially recognized as a currency in some countries. DOGE can also be used, albeit on a smaller scale. For example, it can be used to pay in the AMC movie theater network.

3. Both cryptocurrencies use the Proof-of-Work (PoW) protocol. This means that they require mining equipment and a large amount of electric power to process peer-to-peer transactions. Perhaps one day both projects will switch to Proof-of-Stake. Most modern blockchains already employ this protocol. Then maybe the freed-up computing power will be used to develop AI.

Bitcoin vs Dogecoin: Which One Is Right For You?

In this section, I will not delve into the complex technical differences between Bitcoin and DOGE. Why should an investor care that Bitcoin runs on the SHA256 protocol and DOGE on Scrypt? Let’s just look at the coins from an investment perspective.

	Bitcoin (BTC)	Dogecoin (DOGE)
Market cap	1,970,000,000,000 USD	55,340,000,000 USD
Transaction speed	10 minutes	1 minute
Transaction fee	4.7 USD	0.001 USD
Financial reliability	Recognized by major investment funds, available through ETFs for purchase by the most conservative funds in the US	Not even close to boasting anything of the sort
Technical reliability	A hack is unlikely since the protocol is public and there is a huge number of interested parties	The tech side is similar, but there are a few things to consider. For example, how many people are using the protocol, and the potential for hacking through spoofing
Issuance	Limited. The project is deflationary. The BTC price will become higher in the long term due to a fixed supply	Not limited. There could be a lot of coins issued at any time, which might cause the price to drop
Exposure to manipulation	Low. The price of Bitcoin can be manipulated, but it is expensive, and not many people can afford it	High. Any time Elon Musk posts on social media, the DOGE price can soar by 30% or even 300%

I recommend that you think about your trading style or investment profile to determine which cryptocurrency suits you better. 

If you are a conservative investor, I’d suggest focusing solely on Bitcoin. It has a more stable history and trust from institutional and retail investors.

However, if your risk tolerance is high and you can trade in highly volatile market conditions, Dogecoin trading and trading cryptocurrency in general might be something you’d be interested in.

There’s even a fairly simple way to keep track of promising times to enter Dogecoin. Just follow Elon Musk’s account on X (formerly Twitter). If he mentions DOGE or posts memes with dogs, it can affect the DOGE exchange rate. At times like this, take a look at the chart, and you might have a good entry point right in front of you.

You can monitor the charts and buy both coins on the LiteFinance platform.

Conclusion

I like to compare these two projects to gold and fiat money. Perhaps, in the future, they will indeed fulfill such roles.

Fiat money is easier to transfer, commissions are usually lower, and the exchange rates of different currencies can vary significantly. Gold has always been seen as a safe haven — a way to hedge your money against inflation. Sometimes, it even helps you not only save money, but also to get profits.

As for me, Bitcoin is more like gold, while DOGE is the fiat currency of a fictional, non-existent country. I know that this comparison is somewhat controversial, but it can help investors who are not familiar with blockchain technology to understand what these two projects are.

Anyway, it is for you to determine the best cryptocurrency and whether you want to use digital assets or not.

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