Bitcoin is not only the first blockchain cryptocurrency; it’s also the most popular crypto in the world. Bitcoin started in 2009, whereas the Dogecoin project began in 2013. However, in 12 years, Bitcoin reached a market cap of around $1,000 billion, whereas Dogecoin has a market cap of about $10 billion. In contrast, the world’s second most popular crypto Ethereum started in 2015, has a market cap of $200 billion.
Dogecoin and Bitcoin are similar; both are a cryptocurrency, whereas Ethereum is a platform for decentralized applications, and Ether is the currency of this platform. Honestly, we can’t compare Ethereum with Dogecoin or Bitcoin. We can, however, compare Dogecoin with Bitcoin because both are cryptocurrencies with a minor difference.
Can Dogecoin’s market cap explode from $10 billion to $1000 billion and become the next Bitcoin? We believe Dogecoin can become the next Bitcoin, and in this article, we explained the reasoning behind it.
Let’s first examine why Bitcoin’s market cap is more than $1 trillion, and can it grow indefinitely in the coming years? We will also compare it with Dogecoin.
Bitcoin is the first crypto in the world and has the first-mover advantage over other cryptos. It has the largest community and gets media attention all the time. Various high-profile financial and tech companies have bought Bitcoin, such as Tesla, Square, Paypal, Micro Strategies, Goldman Sachs, etc. Millions of retail investors also invested in this coin. Moreover, Bitcoin is the most widely accepted cryptocurrency in the world.
If you search and count on Facebook and Reddit, you can see that Dogecoin has the second-largest crypto community in the world after Bitcoin. However, there are several notable differences between Bitcoin and Dogecoin adoption.
- Dogecoin is entirely driven by retail investors. No big banks or companies have publicly bought or invested in Doge. The market cap would not rise unless big banks and Wall Street jumps into Doge.
- Dogecoin is not as widely accepted as Bitcoin. It has a minimal use case.
- Every crypto exchange in the world allows the buying and selling of Bitcoin. In contrast, only a handful of exchanges support Dogecoin.
Looking at the above points, it may feel like Dogecoin can’t become as big as Bitcoin. Dogecoin, however, has some benefits over Bitcoin.
Miners (powerful computers) are the backbone of any blockchain network. People spend tens of thousands of dollars to rig and operate these computers. Miners process all the transactions in the Bitcoin and Dogecoin network. As a result, they get paid in two ways:
- Transaction fees.
- Block rewards by the network in native cryptocurrency.
Bitcoin has a coin supply limit of 21 million. So far, 18.5 million coins have been rewarded (mined). When all the coins (21 million) are mined, there will be no more block rewards. At that time, miners’ sole income will be from transaction fees.
Nowadays, it’s hardly profitable to mine Bitcoin. When the block reward goes away, Miners either have to move out to more profitable crypto or increase transaction fees. We already see this phenomenon. Nowadays, Bitcoin transfer fees are prohibitively high.
Dogecoin’s creators anticipated this issue. That’s why they never put a hard cap on this crypto and have a 5 billion/year coin supply for eternity. Miners get to keep these coins as block rewards. Thus, Dogecoin has the lowest transaction fees in the crypto world.
The high transaction fees will make Bitcoin an unpopular cryptocurrency in the future.
In the US, we have two types of bank transfers. ACH and Wire. ACH takes 2 to 3 business days to clear, whereas a Wire transfer is instant. Still, ACH transactions have taken over the US. It’s because ACH is free, but Wire has a $20 to $30 fee. Doge not only has lower fees compared to Bitcoin, but it’s also faster. Bitcoin takes 10 minutes, but Doge takes 1 minute to complete transactions.
Bitcoin is deflationary, but Dogecoin is inflationary crypto. Thus, psychologically people are attracted to Bitcoin because of monetary incentives. People are buying and hoarding Bitcoin because of the artificial scarcity, hoping that its price would go even higher.
Dogecoin has all the characteristics to become mainstream crypto, whereas Bitcoin has all the elements to become digital gold. It’s why Elon Musk says, “Doge is people’s currency.”
The situation is similar to the “Banana Art.” An artist duct-taped a Banana to a wall for sale. Someone bought the art for $120,000. Another artist went to the exhibition and ate the banana.
There was no difference between a banana for sale at Walmart and the banana of that “Banana Art.” Similarly, though Bitcoin and Dogecoin use the same technology, we consider it worth more than Dogecoin. However, it could all change if, in the future, people believe Doge to be more valuable than Bitcoin.
Moreover, Dogecoin is not widely accepted as Bitcoin does not mean it will remain this way in the future. Each day, new merchants are accepting Dogecoin as a form of payment. Many crypto exchanges do not support Doge does not mean it will stay this way forever. Wall Street has not invested in Doge does not mean they will never invest in this coin.
In short, Doge can overcome all the adoption-related shortcomings, but Bitcoin can’t overcome its technical challenges. It’s why we believe that Dogecoin can become the next Bitcoin and explode in the market cap.