What are the advantages and disadvantages of Dogecoin?
Dogecoin is much less valuable than prominent cryptocurrencies.
Despite its soaring popularity and impressive growth streak, Dogecoin falls far behind mainstream cryptocurrencies in terms of price. On 18 May 2021, Dogecoin was priced at less than $0.5, whereas Bitcoin stood at $42,877.42.
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Dogecoin is more susceptible to hacking attempts.
The number of nodes in the Dogecoin network is significantly smaller than in other blockchain currencies making it an easier target for attackers. Dogecoin has only 1090 nodes, while Bitcoin has 10,000 of them distributed across 97 nations.
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Dogecoin can now be mined with Litecoin, leading to a more secure network.
Dogecoin’s developers merged mining with another long-established currency, Litecoin. A case study by Binance Research reveals that the goal of this merger was to improve network security by leveraging Litecoin’s mining workforce.
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Continuous growth has sped up Dogecoin’s tech development.
Dogecoin’s development activities went on the backburner for a while and its co-founder, Jackson Palmer, took an extended leave of absence in 2015. However, the current meteoric rise of Dogecoin has stirred up development activity.
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Dogecoin operates faster than Bitcoin.
Both Dogecoin and Bitcoin have a block size of 1MB. However, Bitcoin’s blockchain takes 10 minutes to confirm, whereas Dogecoin does so in just 1 minute. Hence, Dogecoin is ten times faster than Bitcoin.
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It’s easier to mine Dogecoin than Bitcoin.
Bitcoin utilises the SHA-256 algorithm, and Dogecoin has Scrypt to guide the mining. According to BitDegree, Scrypt requires a lot less power and time, making the mining of Dogecoin much easier than that of Bitcoin.
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New Dogecoins will keep entering the market forever.
Unlike with popular cryptocurrencies, such as Bitcoin and Litecoin, there is no cap on the number of Dogecoins that can be created. This inflationary model of Dogecoin promotes more flow and less hoarding, as people usually do with other cryptos.
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Investing in Dogecoins can be risky since only a handful of wallets contain the majority of available Dogecoins.
Only 100 wallets control the majority of the Dogecoin market. 65% of Dogecoins can be found in only 98 wallets, while the largest wallet contains 28% of all Dogecoins. The supply of Dogecoin is concentrated among few owners.
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Millions of new Dogecoins enter into circulation every day.
Miners get rewarded with 10,000 Dogecoins every minute. This translates to 14.4 million Dogecoins per day and a whopping 5.2 billion per year. While this promotes transactions, it also holds down the price of individual Dogecoins.
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Dogecoin is on a roll and grew over 100% in a day.
In April 2021, following a tweet by Elon Musk, Dogecoin stock prices grew by more than 100% in a mere 24 hours. News reports have attributed this growth to Elon’s followers rushing to acquire the cryptocurrency.