Long Live Dogecoin: Why Developers Won't Let the Joke Currency Die
Is dogecoin dying? Can a cryptocurrency truly be killed? CoinDesk explores the so-called joke currency in a new feature piece.
'Such crypto. Very currency. Wow.'
So went the enthusiastic, disjointed dialogue of the 'Doge', the cute Shiba Inu dog turned internet meme that was later adopted by cryptocurrency users in search of a less serious twist on the tech.
From 2013 to 2014, dogecoin carved its place in the crypto world, in part because its community used it more as a currency at a time when rivals bitcoin and litecoin were typically held as (serious) assets. At its height, hundreds or thousands of dogecoins would zip around Twitter and Reddit, sent back and forth between users who collectively dubbed themselves 'shibes'.
That momentum then expanded out into more serious endeavors, with the community raising money to fund a bobsled team and water wells in developing countries, among other charitable initiatives.
But as the cryptocurrency protocol closes on 18 months without an upgrade, is the fun-loving dogecoin finally dying? And what does dying even mean for a distributed software currency?
According to Jackson Palmer, the cryptocurrency's founder (who departed the community amidst growing acrimony in 2015), dogecoin has seen a broad decline on the development side – a state of affairs that doesn't bode well for its longevity.
Palmer, who continues to maintain his distance although he checks in on the parody currency every so often, told CoinDesk:
State of affairs
A look at the dogecoin GitHub page bears out this perspective to some degree.
According to data available, no changes have been made to the code since 20th October, 2015, and since a burst of activity in the middle of that year, contributions have essentially ceased.
Perhaps more telling is that trade volumes have also declined sharply since the cryptocurrency’s peak in popularity, according to CoinMarketCap.
The reason? People are moving on, said Palmer.
"A lot of people that cut their teeth on dogecoin have moved on to bigger and better things," he said, adding that most of those people have migrated to platforms like ethereum.
On the other hand, the currency looks quite healthy compared to others, since new mining power continues to come online and dogecoin's hash rate keeps on climbing, according to data from BitInfoCharts.
Yet Max Keller, lead core developer of dogecoin, confesses that metric probably doesn’t hold much weight since the altcoin is merge mined with litecoin, meaning that litecoin’s hashing power provides security to the dogecoin network as well.
Keller suspects most new miners to dogecoin come in from litecoin (since dogecoin mining is not profitable anymore) – not only because the price of dogecoin has dropped, but also the mining reward for adding a new doge-block has fallen to 10,000 coins, or about $2 in US dollar terms.
And this low price point (dogecoin's all-time high price was around 200 satoshis, equal to about $0.002), is one of the reasons many cryptocurrency enthusiasts don't see it as being worthy of attention.
Yet the cryptocurrency continues to provide value to a group of people that together trade anywhere between $50,000 and more than $200,000 per day, data shows. And its three-person volunteer development team continues to keep tabs on the project, albeit when they have the spare time.
"It's a DIY project for us, a hobby just to pick at every now and then," explained Ross Nicoll, a 37-year-old dogecoin developer.
In brighter news for the shibes, though, Nicoll told CoinDesk that he’s likely to take some time off from his day job as a software developer at blockchain consortium R3 to work on a dogecoin upgrade soon.
Keller too, hasn't given up on dogecoin, adding:
According to Keller, who’s also a mobile app developer for German Railroad, the only way he’d abandon his role as a dogecoin developer would be if everyone stopped using it.
Therein lies the true question as to whether or not a cryptocurrency protocol – like other kinds of software – can experience a true kind of 'death'.
According to Nicoll, that’s no easy task. Even the old dogecoin client (current until a February 2014 fork) could still be used today if two nodes began running the client and were able to connect with one another.
With the right software, they could mine each other’s transactions, pocketing thousands of albeit valueless tokens.
Cryptocurrencies are "a bit zombie-like", Nicoll said. "It's very, very hard to kill a cryptocurrency."
Some might call a valueless cryptocurrency 'dead', but that would be missing any educational or entertainment value the token might provide. For instance, Nicoll said even after the 2014 fork, shibes were moving the old version of the coin around for about five or six months.
"It was a functional currency, but you couldn’t use it at shops or on exchanges. We don’t know why they were doing it, but they were having a whale of a time," he said.
But how do you really kill it? The proverbial headshot for a 'zombie coin', according to Nicoll, would require removing the original code from GitHub, making it exceedingly hard to recreate it since very few people keep copies of source code material. Yet the nature of open-source software means that, in that rare instance, copies of the code could still be floating out there somewhere on the internet.
According to Gideon Greenspan, founder and CEO of Coin Sciences, there’s another way to inhibit these crypto zombies that would be just as detrimental as outright death.
"When there’s a spiral of decreasing value and decreasing mining until [the cryptocurrency] becomes very insecure in terms of proof of work, at that point someone attacks the cryptocurrency with a 51% attack, possibly reversing a long period of seemingly confirmed transactions," Greenspan said.
At that point, he said:
And even without being attacked, a coin can be discounted.
That, according to Greenspan, happened to mastercoin. When the price of the cryptocurrency began to drop, the developers stopped believing they were working on a project that would enrich them in the future, he said. As a result, they dumped their mastercoins, only worsening the effect, he said.
The result is more of an economic death, said Keller, rather than a technological one.
Long live dogecoin
As it stands today, dogecoin likely won’t see a technological death.
The current core devs are adamant about keeping the network running for the community – as long as there are people that want to learn about cryptocurrency via experimentation, or more serious users that still purchase digital goods and items on Steam, a marketplace for PC games.
Nicoll said an update for dogecoin will likely come very soon, since bitcoin has gone through two or three upgrades focusing on performance and user interface improvements since dogecoin was last updated in 2015.
"That all tips an upgrade towards more reward than risk," said Nicoll.
One update that dogecoin is unlikely to integrate is Segregated Witness, a proposed scaling upgrade for the bitcoin network. The core team doesn’t see SegWit as potentially beneficial to dogecoin, which doesn’t have the same constraints as bitcoin, since its release rate is much faster.
As for the long period of inactivity on the development side, Keller pointed to the version 1.7 release of the altcoin, released in late 2014, by which the dev team sought to abandon legacy code in an effort to bring technological stability over a longer period of time.
While performance improvements will likely soon come through a soft fork, no major changes through a hard fork are planned without an impelling reason, such as a security threat.
"There’s that saying, 'Never change a running machine'," Keller said. "That kinds applies here. If dogecoin is running well, and is well-tested, I don’t see many reasons to fiddle with it."
Stan Higgins contributed to this feature.
Image via Shutterstock
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