The meme-based cryptocurrency, Dogecoin, created as a joke in 2013, has risen to the second-largest proof-of-work (POW) cryptocurrency after Bitcoin. The growth comes from the Ethereum Blockchain completing its change to the energy-efficient proof-of-stake (POS) mining model.
Dogecoin only trails Bitcoin in terms of its market value. However, the firm meme coin is securely above the third-placed PoW crypto, Ethereum Classic (ETC), Litecoin (LTC), and Monero (XMR).
PoW vs. PoS Consensus Mechanisms
PoW is mainly a mechanism that needs network members to expand efforts in solving random mathematical puzzles. They especially prevent anybody from having a particular way to the system. The consensus mechanism is usually used in crypto mining, allowing transactions and mining new tokens.
On the other hand, PoS comes as another consensus mechanism, giving network control to token owners. PoS works as a boost of PoW as it does not need to consume energy. As a result, PoS has security guarantees that are weaker than PoW.
Bragging Rights Among the Top Cryptocurrencies
Since its creation in 2013, Dogecoin has been among the top 10 cryptocurrencies for a while now. The joke coin now ranks 10th on Coingecko’s list of leading cryptocurrencies. Like Bitcoin, the mining of DOGE uses PoW, requiring miners to use stable computers and a significant amount of energy to validate transactions and earn DOGE.
“DOGE has now flipped Polkadot. According to the current market cap data at CoinMarketCap ranks Dogecoin as the 10th largest crypto.”
The Ethereum network has been operating by PoW as the only altcoin ahead of Dogecoin. Following the Ethereum Merge, the platform changed to a PoS consensus mechanism. The mechanism, thus, is an opening to raise efficacy by enabling the addition of splinter chains to help in-network processing.
Thus, the change of Ethereum to PoS consensus inevitably meant Dogecoin would take over as the second-largest PoW crypto.
The Results of Grabbing Second Place
Becoming the second largest PoW cryptocurrency was received well by some individuals. On the other hand, the move also had some negative thoughts from some individuals. The concern was how deep the crypto space would be, with a meme coin nearly at the top. Many had the idea of removing “useless coins” from the public.
“What happens if everyone decides one day to go to an even more useless but scarce coin like Dogecoin….”
As a result, Dogecoin may also be in a step where it competes with ETHPoW (ETHW), the Ethereum PoW hard fork. The hard fork chain will continue mining, priced at $13.64 on CoinMartketCap. Ethereum’s change to PoS may pressure PoW-powered crypto networks to change toward a more bearable consensus mechanism.
Additionally, the Dogecoin Foundation considered a move for Dogecoin to be a proof-of-stake. The Dogecoin Foundation later gave its Dogecoin plan, proposing to shape Dogecoin’s ‘community staking’ version, similar to PoS.
The version enabled Dogecoin users to stake their DOGE and get extra tokens for supporting the network. However, little progress has happened since then. Therefore, we expect to see if PoW consensus will remain visible to investors in the crypto world.
