Can Dogecoin’s pop-culture appeal and celebrity backing rival Ethereum’s technical capabilities and DeFi dominance?
Given the meteoric rise of DeFi over the last year or so, there are some voices from the cryptocurrency industry suggesting that the time of the simple value-exchange token is coming to an end and smart networks will soon dominate the industry.
It might be true that Ethereum dominates the DeFi space but given the market cap of projects like Bitcoin and the unparalleled popularity of Dogecoin, it is hard to see how they will ever simply fade into obscurity anytime soon.
In this article, we’ll be taking a closer look at Ethereum vs Dogecoin to find out how the projects differ from one another. This will of course involve a technical overview of each token, but also consideration of how they each fit into the wider cryptocurrency sector.
We’ll also take a look at what leading cryptocurrency analysts are predicting for both Ethereum and Dogecoin, to help you decide which token presents the better investment opportunity.
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Dogecoin vs Ethereum - The Key Differences
When it comes to technical capabilities, then there’s really no competition between Ethereum and Dogecoin. The former is, despite its scalability and congestion issues, one of the most advanced blockchains on the market and the network of choice for the majority of leading DeFi projects.
Conversely, Dogecoin is pretty much a one-trick pony. The blockchain cannot support functions like smart contracts or Dapps and on the surface, there isn’t much to mark it out from other value-exchange tokens. However, there’s no denying the so-called meme coin’s enduring popularity.
Ethereum
Background
In terms of notoriety, Ethereum is second only to Bitcoin and has entrenched itself as the number two cryptocurrency in terms of market capitalisation, behind the original cryptocurrency. When it was launched in 2015, Ethereum was hailed as the next generation of cryptocurrency and one that would revolutionise the industry.
Whereas the first wave of cryptocurrencies offered little more than a means of value exchange, the Ethereum platform offered a sophisticated blockchain ecosystem wherein developers could use smart contracts to build far more complex projects.
Fast-forward to 2021 and Ethereum became the go-to platform for building DeFi projects. Compound, SushiSwap and Maker, for example, are all built on Ethereum, along with hundreds of others.
Surging demand for Ethereum-based DeFi projects has caused a few problems, however. The network’s high GAS fees and lack of scalability have been laid bare and there have been instances of significant congestion.
However, at the time of writing, Ethereum is by far the biggest of the smart networks and its Ethereum 2.0 upgrade is expected to have resolved many of its previous shortcomings.
Transactions and Speed
When it initially launched, Ethereum boasted an impressive block creation time. Whereas Bitcoin took up to 10 minutes to add new blocks, Ethereum could get it done between 10 and 20 seconds.
However, the Ethereum 2.0 upgrades will see Vitalik Buterin’s network move to a proof-of-stake consensus mechanism and it has been claimed that Ethereum’s transaction processing speed will increase exponentially. This should ensure its continued viability as a platform for DeFi on a commercial scale.
It’s worth bearing in mind that, due to its hosting of numerous DeFi projects, transaction speed is potentially a much bigger issue for Ethereum. DEXs and liquidity protocol will process transactions in potentially huge volumes, if Ethereum fails to deliver adequate speed, then it's possible that many DeFi projects will jump ship to networks that can.
Supply and Demand
Ultimately, the price of any asset is driven by supply and demand. Different cryptocurrency projects have different mechanisms for releasing tokens, whilst some projects are inflationary by nature, such as Bitcoin, others, like SHIB are deflationary.
There is no total supply cap for Ether, but the number of tokens released into the ecosystem is controlled and limited to 18 million per year. This ensures there is never an overabundance of ETH and helps to stabilise the value of the token, to some extent.
It's worth bearing in mind that the Ethereum project has different objectives to digital currencies like Dogecoin and Bitcoin. ETH is required to support numerous projects running in the Ethereum network, so it is important that there is adequate supply.
Read Also: Is Now the Right Time to Buy Ethereum?
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Dogecoin
Background
Most people know that Dogecoin was originally set up as something of a joke and a way for developers Billy Markus and Jackson Palmer to satirise the hype that surrounded the cryptocurrency market at the time. When the coin launched in 2013, it adopted the image of a popular meme at the time as its mascot - the now-iconic Shiba Inu dog.
Although it wasn’t considered a serious project, Dogecoin was nonetheless a legitimate cryptocurrency with a robust if unremarkable infrastructure that was largely lifted from Litecoin. The Doge blockchain uses the Scrypt algorithm for its proof-of-work mechanism, relying on miners in a similar way to Bitcoin.
Of course, Dogecoin proved to be something more than just a crypto parody when its price skyrocketed by 300% in just a few weeks. The meme coin soon established a loyal following of die-hard supporters and was boosted by several comments from Tesla CEO, Elon Musk.
Transactions and Speed
Dogecoin has a much slower block-creation time than Ethereum, though it is faster than many of its contemporaries, including Bitcoin. New blocks are added to the Doge network in around one minute.
Dogecoin uses the proof-of-work system, which means it relies on miners to verify new blocks and unlock new Dogecoins. Anyone familiar with the cryptocurrency market will know that the PoW mechanism has faced steep criticism for its huge resource consumption and lack of scalability - which could harm DOGE’s longevity. However, Doge’s Scrypt is much more viable than Bitcoin’s SHA256 when it comes to sustainability.
Realistically, Dogecoin isn’t winning any speed records when it comes to transactions and the token’s future success largely depends on its community.
Supply and Demand
Dogecoin is actually an inflationary token, which means its supply increases as time goes on and there is no established cap. The rate at which new DOGE is released is said to be limited to 5 billion tokens per year.
The fact that new Dogecoin can be continually minted means that miners on the network can always receive adequate reward for their work, which in turn means the network will continue to function as it should.
As it is an inflationary coin, Dogecoin, in theory, better emulates fiat currency and this could make it a more viable retail payment means later down the line. It does not necessarily mean that DOGE will not increase in value.
Check Out: Where Will Dogecoin Be In 5 Years?
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Dogecoin vs Ethereum: Which Is The Better Investment?
Few people would argue that Dogecoin can compete with Ethereum from a technical standpoint. However, the bottom line is that investors are concerned with each token’s value and not which platform offers greater functionality.
So does being technically superior make Etherem the better investment? Not necessarily. Realistically, there are projects out there that have surpassed the capabilities of Ethereum, yet have failed to take the number two spot. In fact, Bitcoin remaining the number one cryptocurrency demonstrates that technical particulars aren’t everything when it comes to token price.
Dogecoin, on the other hand, has shown us just how important community can be when driving up the price of an asset. Whilst this might be a slightly more tenuous hold on value, it can and has led to significant bull markets in the past.
Ethereum Vs Dogecoin: Price History
All things considered, the best way to start building an idea of how Ethereum and Dogecoin measure up is to consider each token’s price history and how they have responded to certain market forces over the years.
Ethereum
Like most cryptocurrencies, ETH had a pretty low trading price for the first few weeks of its existence and gradually built its way up to reaching parity with the US dollar. Throughout 2015, Ethereum was trading at anywhere between $0.40 and $1.80.
The first major price upswing occurred in 2017 when ETH surged to $10 in January. However, this was just the start and that year proved to be hugely successful for the token, as it stormed to $341 in the summer then hit $1,345 going into January 2018.
Ethereum was then hit hard by the market downturn that struck in 2018, with its token price plummeting to just $89 by December. It then took all of 2019 before ETH regained the $200 mark going into January of 2020.
Of course, 2021 is when things really started to take off again. Ethereum has seen several remarkable price runs throughout the year. It went as high as $1,941 in February, before reaching the high of $4,356 in May.
After a market-wide downturn across much of June, there were bulls in September, but it was the beginning of November that saw ETH reach its new all-time high of $4,891. At the time of writing, the token is trading above $3,700.
Dogecoin
As you might expect, Dogecoin’s previous price movement looks somewhat different to many other cryptocurrencies. The token was virtually worthless upon launch, but after two short weeks its price surged by around 300%.
Of course, this price hike proved to be short-lived and DOGE more or less slipped back into fiscal obscurity until January 2018, when Dogecoin reached a price of $0.013 - up from $0.0002 the year before.
Things continued to be pretty uneventful for Doge over the course of 2019 and 2020, whilst the token did experience some volatility, it was rarely outside of $0.0025 and $0.0030, with no significant breakouts.
It wasn’t until 2021 that Dogecoin started to hit the headlines. Following the Gamestop saga, a group of Reddit users decided to push Dogecoin and inflate the price. A timely comment from Elon Musk gave the campaign a boost and prices surged to $0.082 in February.
Musk and the Reddit campaign did a fantastic job in raising Dogecoin’s profile and the coin was then onboard for the subsequent market upswings, reaching its all-time high of $0.73 in May 2021. This was before the market took a downturn and DOGE tumbled to $0.18.
At the time of writing, DOGE appears to be on the up again, trading at $0.18 per token.
Ethereum Vs Dogecoin: Future Predictions
Looking at Ethereum vs Dogecoin, we can see that each token has had a different experience when it comes to price history. However, investors are not concerned with what has gone before, rather than how prices are likely to move in future. As such, it’s worth taking a look at some price predictions from leading cryptocurrency analysts.
Ethereum
Looking at Ethereum price predictions, it seems that big things are expected of Buterin’s behemoth. DigitalCoinPrice sees ETH hitting $6,000 in 2023, before continuing to grow over the next few years. Most notably, the platform expects Ethereum to break $10k during 2026 and continue on an upward trajectory into 2027 and 2028.
Elsewhere, WalletInvestor has Ethereum breaking $5k by 2023 and increasing steadily as the months go by, reaching over $7,000 per token by December that year. The upward trend is expected to continue well into 2024 and by the end of 2025 ETH is expected to have gone past $10k.
Finally, Longforecast is also optimistic with its Ethereum price prediction. According to its technical analysis, ETH will close 2023 at an average trading price of $6,983 - a 87% increase on today’s price. Ethereum is expected to be trading over $10,000 across 2024, which equates to growth of 170%.
Read More: Ethereum Price Predictions
Dogecoin
Despite its lack of technical credentials, many analysts are also optimistic about Dogecoin’s future. Coinpedia, for example, believes it could reach as high as $2.38 by the end of 2023 - which would represent growth equating to growth of 1200% in a year. Of course, this is hugely optimistic, but a vote of confidence nonetheless.
Meanwhile, DigitalCoinPrice is also expecting DOGE to perform well in the coming years. It has the token doubling in value by halfway through 2023. The token is then expected to sustain its growth rate and reach an estimated average trading price of $0.50 by the end of 2026.
Finally, WalletInvestor also sees a bright future for DOGE. According to its projections, the meme coin will reach a potential high of $0.4 by the end of 2023, but sees that growth being sustained across 2024. By the end of 2025, WalletInvestor believes that DOGE could be trading at a potential high of $0.9.
Don't Miss: Dogecoin Price Predictions
Dogecoin Vs Ethereum: What the Experts Say
When looking for expert opinions, you’re likely to find that there are two distinct schools of thought. Any cryptocurrency and blockchain experts are likely to laud the limitless capabilities of Ethereum and see little comparison with Dogecoin. However, those from the world of business and investment see a different side of things.
Elon Musk, for example, appears to appreciate the power of community in driving up an asset’s price. He has previously dubbed DOGE the “people’s crypto” and later called for the community to “release the DOGE” - comments which instantly sent Dogecoin’s price up by about 4%.
DOGE has also proven to be popular with celebrities, with rapper Snoop Dog and KISS legend Gene Simmons both appearing to express support for the coin - and both have been known for having investment savvy in the past.
Inevitably, Ethereum also has plenty of supporters. Galaxy Digital’s Mike Novogratz, for example, suggest that ETH has become a “currency of culture” and appears to believe the NFTs are likely to continue to be a big deal in the world of cryptocurrency, presumably with Ethereum being best placed to facilitate the emerging industry.
Elsewhere, Ryan Selkis of Messari has previously said that “Ethereum that has taken flight as crypto’s most important platform… one that could power an entirely new financial system, and a more open, resilient internet.”
Is It Better To Invest In Ethereum Or Dogecoin?
Both Ethereum and Dogecoin are high-risk investments, so before you invest in any crypto asset, make sure you are willing to take the high level of risk and volatility.
While neither of these cryptos is considered as a safe investment, Ethereum may carry less risk than Dogecoin because it has a longer track record and better name recognition. However, Dogecoin may have more opportunities for growth over time.
Dogecoin Vs Ethereum: Conclusion
On the surface, there is very little to compare Dogecoin vs Ethereum. The former is one of a group of so-called meme coins, which owes its success largely to its popularity amongst a certain demographic. As for the latter, it remains the leading smart network that hosts some of the world’s top DeFi projects.
But Dogecoin has demonstrated its resilience on more than one occasion and, given that it is still argued that cryptocurrency has “no intrinsic value”, DOGE is as well placed as any other tokens to see its token price soar in the coming years. In fact, it’s possible that the DOGE community could build enough momentum to permanently establish it as a leading means of digital payment.
It’s probably true that Ethereum represents a safer bet, by comparison. Online communities can be capricious and trends come and go. It’s also very difficult to predict when community-driven price runs might occur. All things considered, investors may want to consider hedging their bets by adding both Ethereum and Dogecoin to their portfolios.
How To Invest In Dogecoin And Ethereum
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Ethereum Vs. Other Cryptocurrencies:
Ethereum Vs Dogecoin - FAQ
Dogecoin vs Ethereum - which one should I buy?
Whilst Ethereum is undoubtedly the superior blockchain when it comes to technical credentials, Dogecoin shouldn’t be underestimated. It has arguably the most loyal following of any cryptocurrency and its successes in 2021 could have established it as a mainstay of the top 10 cryptocurrencies by market cap.
Can Dogecoin double my money?
Dogecoin is hugely popular at the moment and saw some truly impressive price growth in 2021. Whilst it may not double your money this year, there are analysts out there who are predicting 100% growth as early as 2023.
Where can I buy Ethereum?
Ethereum is one of the most famous cryptocurrencies in existence and, subsequently, most exchanges will list the token for trade. However, if you’re in the market for a new platform, then we’d highly recommend eToro as the ideal place to start building your cryptocurrency portfolio.
Which crypto should I invest in?
It has been an interesting year for the cryptocurrency industry, as NFTs and DeFi have really come to the fore. Platforms like Ethereum, Binance Smart Chain and Cardano are currently the go-to places for the more advanced projects, but it’s worth bearing in mind that value exchange is still big in the world of digital currency, so it’s always worth considering Dogecoin, Litecoin and Bitcoin.
Can Dogecoin support NFTs?
One of Dogecoin’s apparent shortcomings is that it cannot support smart functions, such as the minting of NFTs or smart contract exchange. However, in simplicity there is often strength and DOGE is often pegged as the most suitable cryptocurrency to mimic fiat currency.