Any time you’re looking at investing in cryptocurrencies, it also helps to find and analyze any competitors. In Dogecoin’s (CRYPTO:DOGE) case, that means finding cryptocurrencies that are predominantly used for making payments, such as Ripple (CRYPTO:XRP). So, here’s what to consider if you’re wondering which is the better cryptocurrency to buy in 2022.
Right now, there are more than 16,000 tokens and coins in existence. And not every cryptocurrency has been made for the same purpose. Some are used strictly for making payments, while others are used to pay for transactions on a blockchain, such as making an investment in a DeFi project.
So, it’s important to understand what you’re buying and what the primary use cases are for it. Just like when analyzing a stock, you want to find out what the business does. It’s the same thing when investing in cryptocurrencies.
And because we know Dogecoin is primarily used as a digital currency for making payments, we can now analyze all the other competitors to Dogecoin, one of the biggest of which being Ripple.
If you’re looking to invest in a cryptocurrency in 2022 that can grow significantly over the long haul, as investors demand more digital currencies, here’s the better buy between Dogecoin and Ripple.
Is Dogecoin worth a long-term investment?
There are a few reasons why many investors would agree that Dogecoin is not the best long-term investment. First off, and most importantly, its technology is nothing special. In fact, the proof-of-work (PoW) algorithm that it uses to validate transactions is known to be more energy intensive than a proof-of-stake model, which is why so many other cryptocurrencies with this newer technology have been gaining in popularity.
Dogecoin’s older technology shouldn’t be surprising, though. After all, Dogecoin was created years ago, before some of the biggest technological improvements had been made in the industry. Furthermore, it was created as a joke. So, there are certainly cryptocurrencies out there that were made for a purpose that have a tonne of potential over the long run to see mainstream adoption.
Nevertheless, though, Bitcoin (CRYPTO:BTC) also uses PoW technology. While a cryptocurrency’s technology is important, it’s not the only factor in determining success.
One of the benefits of Dogecoin is that you can spend it at over 1,900 businesses. That means only four other cryptocurrencies can be spent at more businesses. And Ripple, one of Dogecoin’s main rivals, is below it on the list, with over 1,500 businesses accepting XRP as payment.
Without many other use cases, the number of places you can spend Dogecoin is one of the biggest factors in determining its value. Often when you see a new business announce that it will accept Dogecoin, you can soon see a bump in the price.
The fact that its supply is unlimited, though, and the fact that it’s been in a significant downward trend for months shows it’s not really a great store of value. In addition, it’s well known that Dogecoin is one of the cryptocurrencies that sees the most speculation from investors, which can make it highly volatile.
So, if you’re looking for a cryptocurrency for payments, in my view, you can do better, and one of those is Ripple.
Why Ripple is a better cryptocurrency to buy than DOGE in 2022
The two biggest reasons Dogecoin doesn’t offer as much long-term potential as Ripple is due to its PoW algorithm and unlimited supply. So, if there were only one of these cryptocurrencies to buy for the long haul, I’d have to choose XRP.
However, one of the main risks of Ripple, the company that created the XRP token, is that the company is currently being sued by the United States Securities and Exchange Commission. The SEC is accusing Ripple of selling its tokens to investors through a non-registered offering.
So, if you’re bullish on Ripple as one of the better cryptocurrencies to buy in 2022, that’s a risk to keep in mind.
While the two aren’t perfect competitors, they are both primarily used as digital currencies for making payments. If I had to choose one cryptocurrency to buy and hold for the long haul, in my view, Ripple offers much more potential.
