When the people behind dogecoin, the famous dog-depicting cryptocurrency worth $39 billion, announced last month a reboot of the Doge Foundation with the addition of Ethereum inventor Vitalik Buterin and Tesla representative Jared Birchall as advisers, it got tongues wagging in the crypto space.
The reinstatement of the foundation is great news for DOGE lovers because it formalizes development work on the cryptocurrency. But the inclusion of Buterin and Birchall also suggests a specific future-proofing of the dogecoin roadmap when it comes to crypto mining.
Dogecoin, like bitcoin and the current iteration of ethereum, relies on energy-intensive proof-of-work (PoW) mining. For now, at least.
“DOGE is going to be exploring proof-of-stake (PoS), probably with some kind of parallel chain,” a source with knowledge of the matter told CoinDesk. “But there’s no ETA and some internal friction.”
Buterin is overseeing Ethereum’s transition from PoW to PoS, a consensus mechanism that is not reliant on accumulating specialized mining computers.
Buterin recently voiced his feelings about a possible “switch” for dogecoin:
Much convincing to do
CoinDesk asked dogecoin core developer Ross Nicoll and community leader Gary Lachance for their views on the idea that DOGE might add the more environmentally friendly consensus system to its roadmap.
“Personally, I would love to see [PoS] explored,” Nicoll said in an interview. “But I couldn’t tell you when that would be, and I’d have to convince some other people. So you can certainly say, for me personally, absolutely. For the foundation, there’s a lot of people to convince.”
Dogecoin launched in late 2013 as a fork of litecoin (LTC), and therefore uses the same consensus mechanism, PoW and the same hashing function, Scrypt. In 2014, dogecoin’s developers decided to adopt merged mining, leveraging litecoin’s mining pools, the technical term for which is Auxiliary Proof of Work (AuxPoW).
Prior to dogecoin rallying in price, it was viewed as a byproduct of litecoin mining (today DOGE has a market cap of about $39 billion, versus LTC’s $12 billion, according to CoinMarketCap).
Dogecoin’s move to merged mining can be viewed as a concession to the energy efficiency argument that has become a central theme in crypto today.
However, Lachance, who also runs popular community efforts like Doge Disco, believes PoW and bitcoin energy usage is more nuanced than some of the reports suggest.
“There have been a lot of assertions made about how bitcoin burns as much electricity as Argentina or whatever,” said Lachance. “I mean, it’s a nuanced discussion, whether or not that much energy is being burned. I’d love to see a transition to systems that are not depleting the environment. But I think it’s definitely important to have a stable foundation. To me, that’s the most important thing.”
It’s also worth noting no single cryptocurrency that has chosen to adopt merged mining has ever shifted away from AuxPoW. A look at Ethereum’s transition to PoS shows the level of complexity involved and raises all sorts of questions, said Nicoll, such as how that migration might look for dogecoin.
“There has to be some sort of path,” especially for the network’s current miners, Nicoll said, adding:
Back to the fun stuff
For now there are other priorities to consider, such as completing an important reduction in the cost of transaction fees, and simply getting the foundation to a point where funds for development work can be disbursed.
The intent is to make the Dogecoin Foundation’s treasury fully transparent, said Nicoll, and current discussions include using a developer “tips jar,” which started out as “beer and pizza” money, but is now worth about $6 million. For now, some 250,000 DOGE (approximately $75,000) has been moved from the tip jar to pay for setting up the foundation, he said.
Of paramount importance, said Lachance, is to reinforce DOGE as the people’s currency: easy, fun and versatile.
“So this is where the lowering of the fees is huge. For other currencies, it might not be that big of an event,” Lachance said, adding:
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