Dogecoin (DOGE) celebrates its tenth anniversary in December, making it one of the oldest major cryptocurrencies in the world. To guarantee future viability, the community is discussing fundamental issues.
Almost 9 billion US dollars of capital are behind Dogecoin (DOGE), the world’s best-known meme coin is no longer the gimmick it was in the early years after 2013. For investors, technological details are therefore also important for Dogecoin, which could become price-relevant. On X (formerly Twitter), the discussion is increasingly popping up these days as to whether Dogecoin should not tackle a fundamental evolution after the example of Ethereum (ETH).
Specifically, it is about the protocol in the network of DOGE. Like almost all cryptocurrencies from the early years of Bitcoin and Co., Dogecoin is based on a protocol called Proof-of-Work. This could be replaced by a more modern alternative called Proof-of-Stake, parts of the Dogecoin community suggest. Ethereum, the number two cryptocurrency by capital and importance, had made such a protocol change in September 2022 under the title “The Merge.”
One of the arguments in favor of Proof-of-Stake as a technological protocol is the enormous savings in energy requirements for the network, which was 99 percent for Ethereum. For Dogecoin, the prospect of being considered a “green” project would arise accordingly. Elon Musk, one of the five richest people in the world, is a huge fan of Dogecoin, but does not like anti-climate technologies. That’s why he had stopped accepting Bitcoin (BTC) as a means of payment again in the short term at his company Tesla in 2021.
Should Dogecoin, for example, also dare the technological evolution for possible application purposes as a means of payment at Musk projects such as Tesla or the renamed X platform Twitter? The community seems deeply divided on the question and one of the Dogecoin chief developers, Patric Lodder, makes it clear: Technologically, the change of direction would not be a piece of cake; Ethereum needed many years for the project.
Conclusion: Momentum for Dogecoin through protocol change?
For you as an investor, the topic of protocol in Dogecoin may sound abstract – but it holds explosive power. The question of energy consumption in cryptocurrencies is well-known and complex due to Bitcoin. There are also good arguments for guaranteeing decentralization with Dogecoin, leaving everything as it is. What remains foreseeable is that Dogecoin wants to decide – and Elon Musk could throw his hat into the ring.
Leave a Reply