(Updated 14. September 2022)
Both XRP and Doge have strong communities and almost fanatic fans. In this article, I’m trying to figure out which is the best investment between XRP and Dogecoin.
DOGE performed forty times better than XRP in the previous bull market, but Ripple’s XRP might be a better long-term hold due to Dogecoin lacking a clear use case. Ripple has an ecosystem of banks and institutions using their services, supporting the long-term case for XRP token.
Let’s get deeper into this, and really figure out which is better of the two coins:
Join the free newsletter of Solberg Invest, where you get technical analyses on Bitcoin, Ethereum, Cardano, and others. Also, you’ll get some free guides and reviews. Sign up for free below:
A Deeper Look Into The Projects Of XRP and DOGE
XRP was incorporated in 2012, and its primary objective was to provide “safe, fast, and almost free worldwide money transactions of any amount without recurring billing.” The system accepts payments in fiat money, cryptocurrency, commodities, or any other units such as reward points or cellular calls.
Ripple is a coinage that solely exists in its own infrastructure. One XRP is made up of a million pieces known as drops (just like 1BTC = 100 million sats). Ripple’s activities began with the issuance of 100 billion XRP, and system restrictions prevent additional issuances.
Dogecoin advertised itself as a “fun” variant of Bitcoin, complete with a Shibu Inu (Asian dog) as its symbol. The informal appearance of Dogecoin fit the atmosphere of the emerging cryptocurrency world. Its scrypt algorithm and limitless supply made it an appealing candidate for a quicker, more flexible, and more consumer-friendly counterpart of Bitcoin.
Ripple (XRP) aims to improve the banking sector and make all sorts of payments, from micro to cross-border, more effective. Dogecoin is more of a meme and provides people an efficient way to buy stuff online, tip content creators, send money peer-to-peer, or mine.
Similarities between XRP and Dogecoin
- Markets. Each of these coins may be purchased, sold, traded, and staked on reputable cryptocurrency exchanges across the world.
- Native token backed. Dogecoin and Ripple have their native tokens named DOGE and XRP respectively.
- Expandable and autonomous. Both of these projects deal with the issue of transaction value in a decentralized and safe manner.
Differences between XRP (Ripple) and Dogecoin
- Usability. Where Dogecoin is a virtual currency designed to be used to pay for products and services, Ripple is a financial settlement and repatriation system designed for banks and financial networks.
- Goals. The goal for XRP is to create a method for straight transfer of ownership (e.g., money, gems, assets etc.) that resolves in near real-time and is a faster, more transparent, and safer option to transmit methods used by banks today, such as with the SWIFT billing system. However, Doge is used as a store of value or means of transaction.
- Coin Fundamentals. Verifying and updating the Dogecoin blockchain is done by decentralized and competitive miners, but Ripple utilizes a consensus mechanism run on databases owned by banks to verify transactions.
- Funds Management. Ripple has implemented a new feature in which the firm releases $1 billion of its XRP holdings to itself each month using a smart contract mechanism (escrows) to assist fund business operations, incentivize consumers, and sell to approved investors. Any leftover bits will be returned to escrow. Doge has no such features, as it is more decentralized.
- Maximum Supply. XRP has a max supply of 100 billion coins whereas Doge does not have any theoretical supply limit.
- Mining. Ripple cannot be mined, however, Doge can be mined for rewards of 10,000 DOGE for every block.
- Ripple is more than simply a cryptocurrency; it is a corporation. Ripple Labs Inc employs approximately 500 full-time people worldwide. Ripple’s team comprises advertising, public relations, and other industry specialists. Some people argue that this is a strength and a competitive edge. Others, think it’s going to be the death of Ripple, as it is a highly centralized model. Dogecoin has none of this, except for a strong community and the best memes in the crypto space.
Tokenomics and Price History Of Ripple (XRP) and Dogecoin (DOGE)
DOGE is inflationary: The yearly issuance of 5 billion Doge equates to an inflation rate of 3.87 percent, which is quite modest when compared to other inflationary cryptocurrencies. As time passes by, that percentage will fall even more as the new 5 billion Doge will represent a decreasing proportion of the entire supply.
XRP is more inflationary than DOGE: According to Messari, XRP has inflated by 25% since last year. (source) This is a huge downwards pressure on the price of XRP, and a significant contributor to the negative price development of the coin.
Let’s take a look at how well they did in the previous bull market, and the following bear market (that we’re still in):
Ripple (XRP) Historical Performance:
XRP surged by over 60,000% in the bull market of 2016 and 2017. In the following bear market, it crashed by 95%.
In the most recent bull market from 2020 to 2021, it performed badly. It “only” 10x’ed and didn’t even hit a new ATH. It is currently down 84% from its cycle high in 2021:
Dogecoin (DOGE) Historical Performance:
DOGE surged by roughly 16,000% in the bull market of 2016 and 2017. In the following bear market, it crashed by 90%.
In the most recent bull market from 2020 to 2021, it performed even better, surging 40,000%. It is currently down 92% from its cycle high in 2021:
The lackluster performance of XRP can be blamed on the lawsuit from the SEC, the high inflation, the centralized nature of the project, or any number of other reasons. But the simple fact that XRP performed terribly in the previous bull market is still true.
Conclusion: Dogecoin has performed best, but XRP might win in the end
Dogecoin has outperformed XRP with a factor of 40x in the previous bull market. However, XRP has a fundamentally stronger case than the meme coin. This fundament might be enough to kickstart a new rally as we saw in 2016 and 2017 of XRP, sending it into the double-digit range.
Do You Invest In Crypto?
When investing in traditional markets like stocks and bonds, there’s not too much you can do to increase your ROI significantly.
This is NOT the case in crypto markets.
There ARE ways you can significantly increase ROI. I’ve created a free guide on 4 easy ways to do it.
I do all four of them myself and know for a fact that they can increase ROI by hundreds of percent.