on the crypto
In the aftermath of the merger, Dogecoin (quotation DOGE) is now the second largest proof-of-work cryptocurrency in the world by market capitalization, after just Bitcoin. Of course, that's not much, as there are now only a handful of proof-of-work cryptocurrencies in the top 100 cryptocurrencies in the world.
It has now become apparent to many in the cryptocurrency community that proof of stake is a far superior alternative to proof of work. Not only is proof of stake a faster, more efficient and cheaper consensus mechanism for verifying transactions on the blockchain, it also consumes far less energy. Therefore, if Dogecoin wants to have any chance of remaining relevant in the future, it must follow Ethereum's lead and move on to proof of stake.
Why is proof of stake important?
If you just buy Dogecoin from time to time, this better performance may not matter. But whether you are buying and selling NFTs, using decentralized applications, or playing with the blockchain, they matter a lot. At the moment, for example, Dogecoin can only process 30-40 transactions per second. A proof-of-stake blockchain like Solana can theoretically process 65.000 transactions per second.
The Rise of Dogechain
For too long, Dogecoin has clung to the idea of being a proof-of-work blockchain, especially since it has been modeled after the Bitcoin model. Since Bitcoin was proof of work, at the time (in 2013) it made sense that Dogecoin was also proof of work. But it's been nearly a decade since Dogecoin's original launch. Times change and companies have to adapt.
The good news, for those who invest in Dogecoin, is that a way to turn Dogecoin into a proof of stake has already been explored. This summer saw the sudden emergence of Dogechain, an entirely new blockchain project calling itself a Tier 2 scalability solution for Dogecoin. Although the Dogechain project did not have formal approval from the Dogecoin development team, it showed what would be possible if Dogecoin upgraded its underlying blockchain technology. It would become much easier to build on the Dogecoin blockchain, which means a sudden explosion of value for the Dogecoin ecosystem.
Ethereum's support
A key factor in the transition to proof of stake is the involvement of Vitalik Buterin, the co-founder of Ethereum. Vitalik Buterin is now one of Dogecoin's principal advisors and has stated in the past that he would help Dogecoin make the transition as soon as the merger was complete. Presumably, Buterin knows exactly how to do it, and Dogecoin's transition shouldn't be as technologically complex as the merger for Ethereum was.
In an encouraging sign, Dogecoin's current Trailmap lists the “community staking”As a priority for the blockchain. This would suggest that the Dogecoin Foundation has at least thought about a transition to a proof-of-stake blockchain. However, it is still a proposal (not a project) and it is not clear what is planned for 2023.
The only way to unlock Dogecoin value?
Moving to proof of stake may be the only way to unlock Dogecoin's true value. When the Dogecoin Foundation releases its new Trailmap, which outlines strategic priorities for the year ahead, I will be watching closely if there is progress on this front. If not, it can be said with certainty that Dogecoin is not sustainable even as a highly speculative meme coin.
