Better Millionaire-Maker Cryptocurrency: Dogecoin (DOGE) vs. Zcash (ZEC)

In crypto, two very different types of coins often end up cast as potential millionaire-makers. There are the meme coins, like Dogecoin (CRYPTO: DOGE), for which hope always seems to spring eternal even when results usually disappoint, and altcoins like Zcash (CRYPTO: ZEC), which investors look toward as "the future of finance" or some other aspirational role.

But which one really has the gas to go the distance and make investors richer?

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Dogecoin is fun, famous, and fighting its own math

Dogecoin was launched in late 2013 by two software engineers who wanted a lighthearted alternative to Bitcoin, riffing on a meme rather than trying to solve a monetary problem. It was never designed as a hard-money instrument or as a serious investment. It was a joke that suddenly became a significant line item in some people's net worth overnight when it skyrocketed to the moon.

Today, the coin's market cap is near $26 billion, and it has a circulating supply of roughly 152 billion coins, with no maximum supply cap defined at the protocol level. New coins are issued every day, and on an annual basis, 5 billion DOGE, or about 3.4% of the total supply, is added. That means holders are constantly being diluted unless new demand keeps showing up reliably to absorb the fresh issuance.

In comparison to assets designed around scarcity rather than hype or positive sentiment, that's a tough handicap. Bitcoin's fixed cap of 21 million coins is a core part of its investment thesis, because scarce things that other people want are valuable by definition. Dogecoin's infinite supply makes it much harder for its price to compound over long horizons, unless culture and speculation consistently do all the heavy lifting -- and neither of those are known for their consistency.

On the other hand, Dogecoin has a kind of intangible asset that most crypto projects would kill for: a well-known brand that consistently gets attention despite lacking any real planned catalysts or leadership.

So could Dogecoin make you a millionaire from here? Probably not. Mathematically, most investors would either need a very large initial stake or a truly extreme price move.

Turning $5,000 into $1 million requires a 200X return. At its current market cap, that would imply Dogecoin someday being worth around $5.2 trillion, or more than the combined market cap of all cryptocurrencies, and larger than any single company on Earth. It's not impossible, but the odds are very long.

Zcash has real scarcity, real utility, and real legal questions

Zcash takes almost the opposite approach from Dogecoin, and follows a strategy that's very similar to Bitcoin.

Its protocol enforces a maximum supply of 21 million coins, with a halving schedule that's identical to Bitcoin's. This periodically cuts the block reward and slows new issuance. Roughly 78% of the eventual total possible ZEC supply is currently circulating, so there is not much supply left to be mined relative to what already exists. Scarcity is one of the primary design features here, and Bitcoin has proven that such an approach is conducive to making investors millionaires over a sufficiently long time frame.

On top of that, Zcash adds a privacy feature. It uses cryptographic proofs called zk-SNARKs, which let the network verify that a transaction is valid without revealing the sender, receiver, or amount. That combination of Bitcoin-like scarcity plus industrial-grade privacy is what gives Zcash genuine utility for anyone who cares about financial confidentiality. But it's also a risk.

Privacy coins are squarely in regulators' sights. Around the world, authorities are tightening anti-money-laundering rules. Privacy-focused tokens have faced a wave of delistings from centralized exchanges since late 2023, as well as other waves before that. In Europe, new rules related to anti-money-laundering (AML) legislation are pushing exchanges to remove coins whose transactions they cannot easily monitor, and Zcash has already appeared on watchlists and in delisting votes at major cryptocurrency trading platforms.

Nonetheless, if global regulators can be appeased somehow, Zcash's scarcity plus its privacy utility could ultimately justify a much higher valuation than it has today. There is a chance that a small, patient allocation today could snowball into something very large over five to 10 years, just like early Bitcoin adopters were able to get rich with patience and a splash of foresight. That's a lot more than can be said for Dogecoin.

Thus, between Dogecoin and Zcash, Zcash is the more coherent millionaire-maker candidate. The upside is rooted in fundamentals rather than pure meme power, even if there's a major risk that remains unaddressed right now. With that said, anyone tempted by the millionaire-maker story here should plan to hold Zcash for a long time, accept stomach-churning volatility all the while, and not assume that any outcome involving literal millions is the base case.

Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.