Is Bitcoin or Dogecoin a Safer Investment? A Beginner's Guide

Cryptocurrencies are making waves in the investment world (much wow), but not all coins are cut from the same cloth. In the wake of the recent presidential election, two of the hottest topics in the crypto space are Bitcoin (BTC) and Dogecoin (DOGE). While they've both built their own success, they offer vastly different investment opportunities.

So, the ultimate question is: do you go for the OG cryptocurrency or the OG memecoin, and which is the safer investment? Our guide explores the debate of "Bitcoin vs. Dogecoin" and their individual strengths.

Disclaimer: This blog post is for informational purposes only and does not constitute financial advice. Always do your own research before investing in any cryptocurrency.

What is Bitcoin?

Bitcoin was launched in 2009 by an anonymous person or group using the pseudonym "Satoshi Nakamoto" and was the world's first decentralized digital currency. Over the years, Bitcoin has been termed "digital gold" in the cryptocurrency world due to its scarcity. As of November 26, 2024, one BTC is worth approximately $94,271.54 (USD), seeing a dramatic increase.

Designed to enable decentralized, peer-to-peer transactions using the Bitcoin blockchain, Bitcoin operates without financial intermediaries like banks, providing a transparent and secure method for people to exchange value—whether for online gambling or other transactions.

Bitcoin has a capped supply of 21 million coins, making it a popular hedge against inflation and a reliable long-term store of value. This appeal has attracted significant institutional backing, as evidenced by the recent approval of Bitcoin Exchange-Traded Funds (ETFs) in the United States.

What is Dogecoin?

Dogecoin was launched as a joke in 2013 by software engineers Billy Markus and Jackson Palmer. Featuring the Shiba Inu dog from a popular Internet meme as its primary mascot, DOGE resonates with the digital generation. As of November 26, 2024, one DOGE is worth $0.39.

Initially created to mock altcoins with little utility, Dogecoin evolved into a speculative asset due to its low transaction fees and fast processing times. Early users employed DOGE to tip online creators, fostering a culture of generosity.

Dogecoin quickly gained popularity thanks to high-profile endorsements, most notably from Tesla CEO Elon Musk, who is referred to by the community as the "DogeFather." He's one of Dogecoin's biggest advocates, claiming that Dogecoin will be accepted as a payment method for Tesla vehicles "at some point" to enhance its utility. Dogecoin entered 2021 priced at $0.0046 per token. Within five months, it surged by 15,769% to a high of $0.73.

Now a leading memecoin, Dogecoin often experiences value spikes during social media trends or following celebrity endorsements. Ranked as the 8th-largest cryptocurrency by market cap, DOGE boasted a 324% gain in 2024, surpassing Bitcoin's 107% return. But is Dogecoin a stable investment in the crypto market? Let's find out.

Price History of Bitcoin and Dogecoin

Graph screenshot from walletinvestor.com on November 26, 2024.

The cryptocurrency market is sensitive to news, whether it's a celebrity tweet or political developments like a presidential election. As such, volatility and significant price fluctuations are normal, offering both risks and opportunities to potential investors.

Bitcoin's trajectory has been upward, showing substantial long-term growth. Its longer track record and broader acceptance generally make it a safer investment choice for those looking to enter the crypto market.

Meanwhile, Dogecoin peaked in 2021 thanks to Elon Musk, who frequently shared Dogecoin-related memes on his social media, particularly on X (formerly Twitter). Musk referred to Dogecoin as his "fave cryptocurrency," which many institutional investors took as a crystal-clear endorsement.

The recent presidential victory of Donald Trump in the U.S. elections has reignited interest in both Bitcoin and Dogecoin. Notably, Dogecoin's latest upward trend is linked to President-elect Donald Trump's reelection campaign, in which Musk played a significant role as a financial supporter.

One of Trump's first post-election announcements was his intent to form the "Department of Government Efficiency," or D.O.G.E. for short, a name that playfully references Musk's favorite digital currency. Musk will serve as the head of D.O.G.E. alongside Vivek Ramaswamy, aiming to streamline to U.S. federal government and reduce inefficiency.

Since this announcement, Dogecoin’s price has more than doubled. However, it's important to note that there is no official indication that this new initiative will have any actual connection to Dogecoin itself.

If Trump's administration adopts a favorable stance on cryptocurrency, it could spur further adoption and price growth for Dogecoin, Bitcoin, and other leading cryptocurrencies. This is especially likely during periods of economic uncertainty that often accompany shifts in political leadership.

Key Differences Between Bitcoin and Dogecoin

Utility: Bitcoin vs. Dogecoin

Bitcoin is the most widely recognized cryptocurrency in the world, with its steady evolution establishing it as a credible alternative to traditional fiat currency. Compared to other cryptocurrencies, it is also relatively stable against inflation in an otherwise volatile market.

Known as "digital gold," Bitcoin has achieved significant institutional acceptance, particularly in 2024, with the approval of Bitcoin ETFs in the U.S. This milestone could prompt other regions to follow suit, signaling a new level of widespread acceptance for decentralized digital currency. Such developments reinforce the role of cryptocurrency in the future of online transactions.

Meanwhile, DOGE remains more of a speculative investment. Critics often point to its inflationary supply, community-driven value, and limited utility compared to Bitcoin.

Overall Purpose: Bitcoin vs. Dogecoin

Dogecoin was originally created as a lighthearted jab at the hype surrounding trending "meme" cryptocurrencies. Despite its origins, it has gained popularity, supported by an active and loyal community. Today, Dogecoin is considered a viable token for short-term practical purposes, such as charity donations and microtransactions.

In contrast, Bitcoin was created with a more ambitious and legitimate purpose: to establish an alternative form of currency that is not subject to the financial control of governments. Bitcoin is increasingly recognized as a store of value, attracting institutional investors due to its relative stability within the cryptocurrency market.

Supply: Bitcoin vs. Dogecoin

Part of Bitcoin's appeal is its limited supply, fixed at 21 million units, with 19.8 million Bitcoin already mined. This scarcity positions Bitcoin as a literal "digital gold," preventing coin inflation from impacting price, giving it a unique proposition as a store of value. 

By contrast, Dogecoin has an unlimited supply, with 5 billion coins minted annually and approximately 150 billion Dogecoins currently in circulation. The lack of a supply cap makes it more prone to inflation, resulting from its widespread availability.

Transaction Times & Fees: Bitcoin vs. Dogecoin

Compared to Bitcoin, Dogecoin has lower transaction fees, making it suitable for small, frequent transactions. Its affordability is one of the reasons DOGE is commonly used for tipping online content creators and other microtransactions. Additionally, Dogecoin has a 1-minute block time, resulting in significantly faster and cheaper transfers compared to Bitcoin transactions, which can take anything between 10 minutes to over a day.

Bitcoin transaction fees are much higher, especially during periods of network congestion. These fees make Bitcoin more suitable for large transactions, where the higher cost is justified by the transaction size and the enhanced security offered by the Bitcoin network.

Security: Bitcoin vs. Dogecoin

Bitcoin has been operational since 2009, with no significant protocol-level security breaches or attacks. Bitcoin's blockchain technology uses a Proof of Work (PoW) consensus mechanism. This means Bitcoin mining algorithms require the successful completion of complex mathematical equations, making the Bitcoin network highly resistant to potential attacks and hacking attempts.

By contrast, Dogecoin is relatively secure. However, its smaller network and lower hashrate theoretically make it more vulnerable to attacks. Additionally, its smaller developer community compared to Bitcoin may result in longer response times to address bugs or vulnerabilities.

Environmental Concerns: Bitcoin vs. Dogecoin

Bitcoin's energy consumption stems from its PoW mechanism, which uses approximately 100-120 terawatt-hours (TWh) of electricity annually. This is comparable to the energy usage of entire countries like Argentina or the Netherlands. Bitcoin mining also relies on specialized hardware called ASICs (Application-Specific Integrated Circuits), which consume vast amounts of electricity and contribute significantly to Bitcoin's overall energy footprint.

Dogecoin similarly uses a PoW system, but it is less energy-intensive than Bitcoin due to its reliance on a simpler hashing algorithm, Scrypt, rather than Bitcoin's SHA-256. Dogecoin mining is often merged with Litecoin mining, as both utilize the Scrypt algorithm. This shared mining spreads energy consumption across both networks, marginally reducing their individual environmental impacts.

Which is a Safer Investment: Bitcoin vs. Dogecoin

While there are noticeable key differences, Bitcoin and Dogecoin each have their positives and negatives. It's difficult to name an outright winner, as they cater to different customer profiles and investment objectives.

However, Bitcoin is widely regarded as a safer investment due to its long-established market position and widespread acceptance. Its fixed supply of 21 million units prevents inflation and enhances scarcity-driven value, making it a deflationary asset. Bitcoin’s role as "digital gold" and its overall stability position it as a cornerstone of the crypto landscape and a reliable store of value.

Meanwhile, Dogecoin, while community-oriented and fun, is more of a speculative asset, unlike Bitcoin, which is viewed as a long-term store of value. Dogecoin's inflationary supply and reliance on meme-driven hype make it a riskier choice for investors. That said, Dogecoin remains a user-friendly cryptocurrency with low transaction fees and fast processing times, making it ideal for microtransactions.

Your choice between Bitcoin and Dogecoin ultimately depends on your investment goals and tolerance for risk. Are you seeking a dependable, long-term asset, or are you drawn to the thrill of short-term gains? The power is in your hands.

How to Buy Dogecoin and Bitcoin

After taking all the above factors into consideration, you may be interested in adding these cryptocurrencies to your portfolio. Both Dogecoin and Bitcoin are available for purchase on popular cryptocurrency exchanges such as Coinbase, Binance, and Kraken.

If you’re ready to get started, here’s how to buy Bitcoin or Dogecoin:

1. Create an account. Sign up for a crypto exchange if you haven’t already. While the account creation process only takes a few minutes, identity verification typically requires 1-2 days.
2. Verify your identity. Once your identity has been verified, you can add a payment method and link your bank account, credit card, or transfer funds.
3. Select your digital asset. Choose the cryptocurrency you're interested in buying, then click "Buy."
4. Review transaction fees. Pay attention to the relevant transaction fees, then confirm the transaction.

Final Words

In the ongoing Bitcoin and Dogecoin debate, it's important to remember that each cryptocurrency offers unique benefits, like two sides of the same coin. Bitcoin is a mature player in the cryptocurrency landscape, with strong institutional backing and viability as an alternative to fiat currency. On the other hand, Dogecoin embodies the unpredictable nature of the Internet but works well for smaller transactions and boasts a loyal, active, and vibrant community following.

Ultimately, your choice of cryptocurrency should reflect your investment goals, risk tolerance, and what you hope to achieve. Many cryptocurrency investors recommend maintaining a diversified portfolio, so take the time to do your research and explore what interests you.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. The cryptocurrency market is highly volatile, with ever-changing market dynamics, and cryptocurrency transactions carry inherent risks. Readers should conduct independent research or consult a financial advisor before engaging in crypto transactions.

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