Bitcoin now has a market capitalization of $1.1 trillion ($1,100 billion), while dogecoin has a market capitalization of $8 billion. The current price of bitcoin is $60,000 per coin, while dogecoin is trading at $0.60 per token.
It is safe to say that the price of Dogecoin will never go above $10/ozh. We also believe that Dogecoin’s market capitalization will one day reach $1 trillion. In short, Dogecoin will never catch up with Bitcoin. Let’s see why.
Technologically, Bitcoin and Dogecoin are the same. Both cryptocurrencies have a block size of 1MB. The only difference between them is this:
- Bitcoin’s blocking time is 10 minutes, but Doj’s is 1 minute.
- Bitcoin has a stock limit of 21 million. Dogecoin has no supply coverage.
- Bitcoin uses SHA-256 and dogecoin uses a hash function based on scrypt.
Total delivery of components:
There are currently a total of 130 billion Dochecoin in circulation. The bitcoin reserve is 21 million, 18.7 million coins have been mined so far and the last bitcoin will be mined in 2140. Compared to Bitcoin, Doge has a 7000 times larger supply.
It is estimated that about 20% of bitcoins are lost forever. So Bitcoin is rarer than you might think.
The following table shows the number of coins offered and their respective market capitalization of the most popular cryptocurrencies.
| Crypto currencies | Power supply | Market prices |
|---|---|---|
| Bitcoin | 18.7 million | 1.1 trillion dollars |
| Ethereum | 115.1 million | 206 billion |
| Cardano | 31.9 billion. | 38.7 billion euros |
| Polka dot | 922.3 million | 34.2 billion |
| XRP | 45.4 billion. | 23.1 billion |
| Dogecoin | 128 billion. | 7.4 billion |
Assuming Dogecoin’s price reaches $1 per coin in the next two years (10 billion coins more), Dogecoin’s total market capitalization should be (130 + 10 ) billion x $1 per coin = $140 billion.
Bitcoin has a market capitalization of about $1.1 trillion. Even if we assume that Dogecoin becomes the world’s largest cryptocurrency, the price will not exceed $10/Doge.
Excluding Dogecoin inflation, each coin would need to have a price of ($1.1 trillion) / (130 billion coins) = $8.46/Dozh for Dogecoin to reach a market price of $1.1 trillion.
However, if Dogecoin takes four years to reach a market price of $1.1 trillion, the price per coin would be $1.1 trillion/$150 billion = $7.33/Doge.
So even if Dogecoin becomes the most popular cryptocurrency in the world, the price won’t rise to $10 per coin.
Inflation:
Everyone has a negative perception of US dollar inflation. Nobody likes our federal reserve printing money.
Unlike Bitcoin, Dogecoin is inflationary and has no supply constraints. Every minute, 10,000 dojas are added to the network. At this rate, miners are adding more than 5 billion coins per year.
The following table shows US dollar inflation from 2010 to 2021.
| Year | Inflation in USD |
|---|---|
| 2021 | 2.24% |
| 2020 | 0.62% |
| 2019 | 1.81% |
| 2018 | 2.44% |
| 2017 | 2.14% |
| 2016 | 1.26% |
| 2015 | 0.12% |
| 2014 | 1.62% |
| 2013 | 1.47% |
| 2012 | 2.07% |
| 2011 | 3.14% |
| 2010 | 1.64% |
Source : https://www.statista.com/statistics/244983/projected-inflation-rate-in-the-united-states/
The following table shows Dogecoin’s projected inflation through 2030.
| Year | Jekons Calculation | Inflation rate |
|---|---|---|
| 2021 | 130 billion. | 3.85% |
| 2022 | 135 billion. | 3.70% |
| 2023 | 140 billion. | 3.57% |
| 2024 | 145 billion euros | 3.45% |
| 2025 | 150 billion. | 3.33% |
| 2026 | 155 billion. | 3.22% |
| 2027 | 160 billion euros | 3.13% |
| 2028 | 165 billion. | 3.03% |
| 2029 | 170 billion. | 2.94% |
| 2030 | 175 billion euros | 2.86% |
The USD has less inflation than Dogecoin. Because of this inflationary model, Dogecoin is not a store of value. Almost everyone in the crypto community, including institutional investors, is buying bitcoin because it is deflationary.
On the contrary, investors are less interested in Doge because the network is devaluing by the minute. When a company issues new shares to attract more funds, it is considered detrimental because it reduces the investment of existing investors.
If you use the U.S. dollar or your local currency to buy Dogecoin, your investment is negated on two fronts:
- Your Dogecoin is devalued every minute.
- The US dollar is also being devalued by our government.
So if you sell the doge against the US dollar, not only is the doge devalued by the close, but our US dollar is also devalued by the Federal Reserve, unless it’s a swing trade or a short term trade.
Transmission speed:
Since the Dogecoin blockchain time is 1 minute, a Doge blockchain can technically process 10 times more transactions than a Bitcoin blockchain in a given unit of time. So Doge is faster than Bitcoin. However, that is not the whole story.
Bitcoin has begun to replace the dollar. People have had enough of the 2008 housing market collapse and the government bailout of the big banks. They wanted a decentralized financial system, free of the Federal Reserve. The creator of bitcoin set a limit of 21 million bitcoins because he didn’t like the idea of unlimited supply. The Federal Reserve prints money and causes inflation in the economy.
Initially, everyone thought of bitcoin as a digital currency. In 2010, Laszlo Haniez bought two pizzas with 10,000 bitcoins. At the current price of bitcoin, $600 million for two pizzas. But it quickly became clear that bitcoin is more interesting as a store of value than as a currency. Bitcoin is considered digital gold.
Let’s compare the transfer rate of USD, Bitcoin and Dogecoin.
We can use USD both offline and online, while we can only use Doge online. There is no argument for offline operation.
For online use, we can transfer USD through various network mechanisms such as ACH and bank transfer. We also have VISA, Master Card, Amex, Discover, Paypal that handles our online purchases with a debit or credit card.
VISA alone can process 65,000 transactions per second. Each operation is deleted in a few seconds. Let’s compare that to Dogecoin’s transaction speed.
The Dodge lockdown time is 1 minute. This means that the network takes at least one minute to clear the transaction. However, if the network is overloaded, this time increases significantly, sometimes to several hours.
We can determine the theoretical number of Dogecoin transactions per unit time using the following formula:
- (Block size limit) / ((minimum possible transaction size) x (block time in seconds))
According to this formula, the Dogecoin network can handle 70 transactions per second:
- (1024x 1024) / (257 x 60) = 68 (block size 1 Mb, block duration 1 minute)
However, due to network sprawl and other reasons, the Dogecoin network can actually handle 40 transactions per second. Bitcoin is worse. In reality, it can process 4 transactions per second. But no one treats bitcoin as a currency anymore.
According to the U.S. Census Bureau, 330 million people live in the United States.
In one day Dogecoin can process 40 x 60 x 24 = 3,456,000 transactions (in practice 40 transactions per second).
So, if all Americans adopt Dogecoin, each person will be able to make a transfer every 330,000,000 / 3,456,000 = 95 days (3 months) on the Dogecoin network. In the case of Bitcoin: If everyone in America starts using Bitcoin, everyone will be able to transfer money every 950 days.
No matter how many computers we add to the Dogecoin and Bitcoin networks, the transfer rate will not improve unless we change the underlying protocol.
However, Bitcoin is no longer trying to be a currency. It is now considered digital gold. So this low data transfer rate is not a problem.
Cogecoin is not considered a store of value. The transfer rate is also very low to be practical in real currency.
Lighting system:
There are only a handful of part-time Dogecoin developers. There is no active development. On the other hand, many developers and organizations are actively developing Bitcoin.
Although bitcoin is slower than dogecoin, developers have already created a light network that improves bitcoin’s transaction time and lowers costs. By comparison, even the creators of Dogecoin have abandoned the project.
Lack of institutional support
According to the Federal Reserve, the richest 1 percent control $36 trillion, or 31 percent of U.S. wealth. The richest 10% control 70% of the wealth ($80 trillion). In contrast, the poorest 50% of the population control 2% ($2.36 trillion) of U.S. wealth.
It is the rich, the hedge funds and the institutions that move the market. Just a few years ago, bitcoin had only a few billion dollars on the market. However, its market capitalization has recently passed the $1 trillion mark, thanks to institutional investments. Goldman Sachs, Tesla, JPMorgan and several other companies have bought billions of dollars worth of bitcoins.
However, due to inflation, institutional investors are not interested in investing in Dogecoin. Without their support and money, the price of Dogecoin would never have risen.
Conclusion:
If we compare all the features between Bitcoin and Dogecoin, we can see that Dogecoin is not virtuous. It is not a store of value, and the transfer rate is not high enough to form a functional digital currency. Ethereum, Cardano and Polkadot have more uses than Dozhi. This is why Dogecoin will never overtake Bitcoin.
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