This post will explore the main differences between Bitcoin and Dogecoin.
If you are unsure how these two old cryptocurrencies differ, you have come to the right place.
Let’s get started!
With the intention of establishing a decentralized digital money that is free from any central authority, Satoshi Nakamoto, a pseudonymous person or group, invented Bitcoin.
The main goal of bitcoin was to create a money that:
As for Dogecoin, software developers Bill Markus and Jackson Palmer invented Dogecoin as a joke and satire of the cryptocurrency craze.
Shiba Inu dogs and the “doge” meme that they inspired acts as the coin’s mascot and branding.
Despite its funny beginnings, the Dogecoin community is devoted and passionate.
Less clear is whether or not they always get that it’s a joke.
By market capitalization as of March 2023, Bitcoin was still the most valuable cryptocurrency with a value of about $471 billion.
Its widespread acceptance as a means of investment and payment by companies and people has aided in its market leadership.
Dogecoin has a market valuation that is considerably lower, at $9 billion as of March 2023.
So…Bitcoin is about 51 times larger than Dogecoin in terms of market cap.
Although prominent figures like Elon Musk have given Dogecoin a lot of attention, its acceptance as a means of payment or investment is still mostly non-existent when compared to Bitcoin.
That’s understandable given that Dogecoin is essentially a cryptocurrency meme.
Bitcoin uses a Proof-of-Work (PoW) consensus mechanism. For transactions to be approved and new blocks to be added to the blockchain, miners have to solve hard math problems.
Bitcoin uses the SHA256 hashing algorithm, which means that miners can buy very powerful, single-purpose computers (known as ‘ASICs’) to mine bitcoins very efficiently.
Dogecoin also employs a PoW consensus mechanism, but its mining process is performed through the Scrypt hashing algorithm.
This makes it more difficult to construct ASICs that are far more efficient than common household computer hardware. While Scyrpt ASICs do exist, they are not nearly as efficient as SHA256 ASICs when compared to standard graphics processing units (or ‘GPUs’).
Additionally, Dogecoin has faster block times (approximately 1 minute) compared to Bitcoin (approximately 10 minutes), resulting in quicker transaction confirmations.
What is perhaps the most interesting technical difference is that Bitcoin uses its own dedicated mining.
Dogecoin, however, uses something called ‘merged-mining’ with Litecoin. While explaining merged-mining is beyond the scope of this article, in short, it just means that anyone who is mining Litecoin can also mine Dogecoin at no additional expense.
As of March 2023, more than 19.3 million of Bitcoin’s 21 million total coins are currently in circulation.
➤ MORE: How Many Bitcoins Are Left to be Mined?
However, Dogecoin does not have a maximum supply cap, and as of March 2023, there were more than 132 billion coins in circulation.
With this inflationary strategy, more Dogecoins will be entering the market forever.
The continued development of Bitcoin is aimed at improving its scalability and privacy. Examples of continuing initiatives to enhance the Bitcoin network include the Lightning Network and Taproot as well as innovations that don’t require forks of any kind, such as Silent Payments.
The future of Dogecoin is less certain because its the guiding philosophy of its development is to pump its value.
Bitcoin is by far the more well-known coin.
For example, according to Google Trends, Bitcoin is searched for far more often than Dogecoin.
There are around 300,000 Bitcoin transactions per day, while there are around 40,000 to 60,000 dogecoin transactions per day.
Dogecoin has lower fees than Bitcoin.
As of writing, the average Bitcoin transaction fee is $2.08. For Dogecoin, the average fee is $0.0080 USD.
On the surface, this means Dogecoin is around 260X cheaper to send.
However, since Bitcoin block space is much more sought after, one Bitcoin transaction is often used to send money to many different people, especially when you account for layer two lightning network transactions.
Since Dogecoin block space is not scarce, Dogecoin likely has more people sending single receiver transactions than Bitcoin.
So while Dogecoin is certainly cheaper than Bitcoin when sending money, it’s likely not as cheap as it appears on the surface.
It’s unlikely Dogecoin will ever overtake Bitcoin.
While both Bitcoin and Dogecoin have established themselves in the cryptocurrency market.
That said, there are considerable differences between them in terms of their historical development, market size, technological features, purpose for existence, and potential future advancements.