Dogecoin vs Litecoin — Comparing Two Early Bitcoin Alternatives

Discover the key differences between Dogecoin and Litecoin, two early Bitcoin alternatives. Explore their origins, use cases, tokenomics, and what sets them apart.

Introduction

Bitcoin (BTC) started the cryptocurrency movement, but other tokens are also important in the history of the crypto industry. Litecoin (LTC) was one of the first altcoins, intended by founder Charlie Lee as the lighter and faster version of BTC, often referred to as the ‘silver to Bitcoin’s gold’. Forked from Litecoin, Dogecoin (DOGE) launched with a focus on fun and community. Today, DOGE is considered the first meme coin. 

Litecoin and Dogecoin are distinct cryptocurrencies with different tokenomics but maintain a symbiotic relationship. Merged mining, or mining both LTC and DOGE simultaneously without compromising performance, is the most prominent example. Let’s explore the history of these tokens and what may lie ahead for them. 

Key Differences Between LTC and DOGE

Litecoin Overview

LTC, amongst the oldest cryptocurrencies, is Litecoin’s peer-to-peer (P2P) internet currency that enables instant, near-zero cost payments to anyone in the world. Former Google software engineer Charlie Lee founded Litecoin in October 2011 through a copy of the Bitcoin source code fork, so Litecoin shares many traits with BTC. However, LTC has a faster payment confirmation schedule and a different cryptographic algorithm for lower transaction fees. It is more suitable as a medium of exchange thanks to these adjustments. 

Lee used the Scrypt hashing algorithm instead of Bitcoin’s SHA-256 to prevent large operations from utilising Application-Specific Integrated Circuit (ASIC) rigs to centralise mining. This initially proved effective, but the ASIC-resistant setup did not last long, and the first Litecoin ASIC rigs were released in 2014. 

Litecoin’s ecosystem has substantially evolved since its launch. Its blockchain launched a Lightning Network comparable to Bitcoin’s in 2018 to expedite transaction processing. 

In addition, a software upgrade released on 20 May 2022 involved Mimblewimble extension blocks (MWEB) to allow confidential transactions, where the amount transferred is known only to the participants. MWEB is the largest upgrade to the Litecoin network, with the aim to provide fungibility for all while improving Litecoin’s scalability. OmniLite is a layered protocol built on Litecoin’s blockchain that adds smart contracts, blockchain-based crowdfunding, and non-fungible token (NFT) support. 

Check out LTC’s current value and recent price trends. 

Dogecoin Overview

Cryptocurrencies like Litecoin appealed primarily to software engineers and technology buffs in the early days, and that audience would need to grow if crypto would change the world. IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer forked Dogecoin (initially created as a hard fork of the now non-existent Luckycoin — a fork of Litecoin) from the Litecoin blockchain in December 2013 to create a fun token that novices to enthusiasts could find engaging. The project is based on the popular DOGE internet meme, and Dogecoin is known as the first meme coin. 

Utility was never a priority for Dogecoin’s currency, DOGE, but advocates quickly started using it to tip content creators on social media platforms like Reddit and X. This spread awareness of the token, and cryptocurrencies in general, facilitating widespread interest and acceptance. Dogecoin is also characterised by its community’s commitment to ‘Do Only Good Everyday’ (DOGE).

Merged Mining

Dogecoin’s network didn’t have the hashrate to validate the cryptocurrency’s transactions, making it susceptible to a 51% attack. Charlie Lee proposed merged mining Litecoin and Dogecoin in April 2014, since both tokens use the same hashing algorithm (Scrypt), effectively combining their hashrates to increase security. The offer sparked heated discussion in the Dogecoin community but was eventually accepted, and merged mining began in September 2014. 

Check out DOGE’s current value and recent price trends. 

Ecosystem Comparison: LTC and DOGE

LTC and DOGE’s Consensus Mechanisms

Litecoin uses a Proof of Work (PoW) consensus mechanism, where cryptocurrency miners use powerful computers called ‘mining nodes’, competing to solve complex mathematical puzzles. The miner who solves the puzzle first claims a set block reward and adds a block to the blockchain.

Litecoin’s network originally offered block rewards of 50 LTC, but this number is cut in half approximately every four years through halving events. The first three halving events occurred on 25 August 2015, 5 August 2019, and 2 August 2023, reducing the block reward to 6.25 LTC. Miners also receive transaction fees.

Litecoin mining is less complex than Bitcoin mining, increasing network throughput. The puzzles have a dynamic difficulty adjusted after every block, striving for average block times of about 150 seconds (or 2.5 minutes) compared to Bitcoin’s target of 10 minutes. The network performs approximately 54 transactions per second (tps) on average. 

Dogecoin also uses a PoW consensus mechanism and is merged mined with Litecoin, allowing miners to claim LTC and DOGE rewards. Dogecoin had halving events every 100,000 blocks, or every 69 days, since its inception in 2013, but these ended in 2015 in favour of a permanent block reward of 10,000 DOGE. Dogecoin processes up to 33 tps. 

Dogecoin faces criticism for its PoW consensus mechanism, however, and some support changing it to Proof of Stake (PoS) to speed up transaction processing while reducing energy consumption. 

Ethereum (ETH) co-founder Vitalik Buterin suggested using Ethereum code to facilitate the switch and joined the Dogecoin Foundation’s advisory board on 19 August 2021. As of this writing, there is no official announcement or further news regarding a Dogecoin PoS transition. 

LTC and DOGE Scalability

Litecoin and Dogecoin are more scalable than Bitcoin, but their PoW consensus mechanisms mean their performance isn’t as quick as other, newer coins. Network congestion, slow processing times, and increased transaction fees result. 

Tokenomics Comparison

Litecoin Use Cases

Used for transaction fees, LTC also has uses for smart contracts, crowdfunding projects, and purchasing NFTs through the OmniLite protocol. Furthermore, traders can swap LTC for other cryptocurrencies or fiat currencies on trustworthy exchanges like Crypto.com. LTC’s history as one of the oldest cryptocurrencies provides strong liquidity and recognition throughout the crypto community. 

Acceptance as a Payment Method

Litecoin is accepted by more than 4,000 vendors worldwide. Some examples include Travala (travel booking platform), RE/MAX (global real estate company), and Sheetz (convenience store chain). LTC holders can also convert tokens into gift cards for some of the world’s biggest brands. 

Dogecoin Use Cases

DOGE is also used for transaction fees, and many crypto platforms support it, making exchanging DOGE for fiat currency or other cryptocurrencies easy. 

Acceptance as a Payment Method

Despite its meme coin origins, 2500+ merchants accept DOGE, including Tesla, Microsoft, and AMC Theatres. Notably, some vendors accept DOGE only for specific types of transactions. For example, customers can only use DOGE to purchase products on Tesla’s website with a DOGE logo. 

Key Pricing Moments

Litecoin and Dogecoin are established cryptocurrencies, and their histories include significant price volatility. Below is a quick timeline for each.

LTC — Key Price Events

DOGE — Key Price Events

Performance and Market Metrics

Litecoin ranks 20^th by market cap at about $5.25 billion at the time of writing. It has a circulating supply of approximately 75 million LTC, with a hard cap of 84 million LTC coded into its protocol. New tokens are released to the ecosystem through mining rewards, and those rewards decrease over time with halvings. Once the 84 million LTC are minted, miners will be compensated exclusively through transaction fees. Many crypto traders consider LTC a safe, inflation-proof store of value due to its scarcity. 

Dogecoin ranks eighth by market cap at around $20.6 billion at the time of writing. DOGE has no max supply, with over 146.4 billion tokens in circulation. DOGE is also inflationary, with 10,000 new tokens added through block rewards every minute. 

Developments and Roadmaps: LTC and DOGE

Litecoin’s Roadmap

A decentralised community manages Litecoin, which doesn’t have a set roadmap for future developments. That said, there are several ongoing projects. Litecoin Space is a block explorer providing info on ‘mempool transactions’, or transfers that haven’t yet been confirmed. Atomic swaps will expand Litecoin’s interoperability with other blockchains. There is no set timeline for the implementation of any of these upgrades. 

Litecoin’s Community

Social media buzz can be a great way to gauge the community’s interest in cryptocurrencies. Litecoin has over one million followers on X and more than 360,000 on Reddit at the time of writing, indicating a relatively large and passionate community. 

Dogecoin’s Roadmap

A decentralised community also governs Dogecoin, but the Dogecoin Foundation offers a trailmap detailing the token’s future. Highlights include a makeover of Dogecoin.com, including a wiki named ‘Dogemedia’, improved developer documentation called ‘Libdogecoin’, and expedited payment processing for businesses called ‘Gigawallet’. Dogecoin’s underlying code hasn’t been altered since 2015, with most projects geared towards raising awareness. 

Dogecoin’s Community

All cryptocurrencies depend on an active community, but meme coins fade into obscurity if they cannot maintain engagement. Dogecoin enjoys a robust social media following with over 4 million X followers and 2.5 million Reddit followers at the time of writing, giving DOGE one of the largest and most passionate communities of any altcoin. 

Conclusion: Litecoin vs Dogecoin

Litecoin and Dogecoin are tied together through their shared history and mining protocols, but the tokens serve different purposes. Litecoin is intended to complement Bitcoin with real-world utility as a virtual store of value and unit of exchange. Dogecoin started as a joke that spawned a powerful community dedicated to doing good while teaching the world about crypto. 

Crypto traders might prefer Litecoin for its utility or Dogecoin for its greater accessibility. Merchants might like Litecoin’s impressive reliability or Dogecoin’s relatively narrow price range. Miners don’t have to choose since one node can contribute hashrate to both networks without compromising performance. 

Before considering a purchase, always review any crypto token in accordance with a sound risk tolerance strategy.

Due Diligence and Do Your Own Research

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