DOGE's long-term survival demystified

DOGE's long-term survival demystified

By felipejoys | felipejoys nongaming | 4 Jun 2021


Dogecoin, the most iconic meme blockchain ever created, still prints tokens worth money. It is all the way up there in the top 100 cryptocurrencies, ranked today as #6. The question is: why? If it offers nothing new and everything is already being done better, if it is constantly being ridiculed, why would it survive? Everyone knows it is inflationary, so how can it survive? In this article, I bring you the answer.

DOGE was supposed to be distributed entirely during only one year, because it was not even meant to last longer than that. It really was designed as nothing but a meme coin. However, some people bought in hard, and when the end came, they were angry. Those holders expected... More. They wanted to turn it into a secondary BTC, following a similar deflationary printing process. The dev said no, but instead of disabling block rewards completely as originally intended, he decided to just let them keep coming non-stop. Thus, it was set that Dogecoin would have no supply cap.

Like I said, people bought in! They still had a popular, finished product in their hand, so it could still be useful. They just had to find a use case for it. But a second problem soon arose: miners were leaving because block rewards were too low, so a race against time began, as the blockchain became exposed to a 51% attack. That's where merged mining came in. Dogecoin became an auxiliary proof-of-work blockchain, particularly to Litecoin.

Merged mining means being able to mine both tokens in the same process without impacting performance, or using the proof-of-work on one chain to help another. Dogecoin adopted the same method used for Litecoin, which was not hard, since both of them were already based on the scrypt algorithm. Since miners could now earn both coins without impacting their performance, Litecoin pool workers started earning Dogecoins as an added bonus.

Major mining pools hold a lot of control in a proof-of-work blockchain. It is very hard to compete with an already trusted pool. So when their workers were asked to adapt to these changes, they did. As a result, a lot more people suddenly had access to Dogecoin rewards. The same guys who already earn Litecoin tokens. Both of which would be easily tradable on exchanges.

It became very easy to spend some profit made in Litecoin only to pump DOGE, which helps its circulation, attracting public attention, and finally increasing its speculation value. Why would somebody not do it, considering they already get DOGE tokens from their LTC farms anyway? All of their unspent DOGE will be worth more, wherever they're spent. And that's how Dogecoin is still alive to this day.

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felipejoys
felipejoys

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felipejoys nongaming
felipejoys nongaming

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