THIS Is Why Doggy JPEGS Are Pushing Dogecoin to Evolve
A new technology called Doginals has brought the Dogecoin blockchain to a crossroads.
Doginals allows people to inscribe NFT-like images onto units of Dogecoin. The rise of Doginals has caused a geometric rise in the number of Dogecoin transactions, straining the network’s capacity.
Let’s take a look at the debate around Doginals, and how pushing Dogecoin to evolve.
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A dilemma has swept across the Dogecoin community.
A relatively new technology called Doginals, which is a variation of Bitcoin ordinals, has caused an explosion of transaction on the Dogecoin blockchain.
Doginals allow people to inscribe information onto the smallest individual unit of Dogecoin, sometimes known as a Shibe
In the case of Doginals, people are inscribing NFT-style images onto units of Dogecoin to create digital collectibles.
As with NFTs, most of the the behavior around Doginals is done by speculators.
These speculators are looking to profit by selling the collectible images in the future, rather than using Dogecoin as a currency.
The use of the Dogecoin blockchain for something other than money has caused controversy, with some in the community calling for an update to Doge’s core protocol to prevent people from inscribing images into blocks.
Doginals first appeared in mid-2023 and briefly caused daily Dogecoin transactions to surge into the millions.
This month has witnessed another explosion: activity has approached two million transactions on several days.
The latest surge in Doginal transactions has spurred a debate in the Doge community, especially among developers, about the future of the Dogecoin blockchain.
In particular, reports have claimed that crypto exchanges are experiencing difficulty settling transactions, which at least theoretically could cause them to pause selling Dogecoin.
The main problem is that the number transactions creates network congestion, leading to higher transaction fees.
Higher fees detract from Dogecoin’s utility as a currency and have led to delayed transactions.
The growth of Doginals has also made it difficult for regular folks to run a Dogecoin node on older computers as the size of the Dogecoin transaction database has increased.
Dogecoin developers have been discussing changes to the protocol, including the possibility of storing Doginal images somewhere besides the Doge blockchain.
The dilemma is an interesting test of decentralization: any solution can’t be imposed from a top-down entity, but has to be reached through community consensus.
Increased transactions due to Doginals doesn’t appear fatal to Dogecoin, but it’s pushing Doge to evolve now, in anticipation of a day when it is used as a worldwide currency.
No matter what happens, it’s probably a good thing that the Doge community is facing the problem of surging transactions now, rather than, for example, after 𝕏 adopts it.
What do you think: should Dogecoin blockchain include the ability to inscribe images and other digital collectibles, or should Doge be optimized as a currency?
Dogey Treats: News Bites
The Dogecoin Foundation released a new blog post including an updated developer library (libdogecoin 0.1.3), a 2023 retrospective, and hints of plans for 2024.
Elon posted “gm” the same minute that Bitcoin hit $50k on Monday afternoon.
Memes of the Week
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Disclaimer: This is not financial advice and I am not a financial advisor. The article above references an opinion for entertainment purposes only and it is not investment advice. Always assume that the author of the article is actively trading and that the opinions expressed may be biased towards the author’s holdings. Do your own research and consult with a licensed financial adviser before making any investment decision. Do not treat any opinion expressed in this newsletter as a specific inducement to make a particular investment. Content, news, research, tools, and securities symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or cryptocurrency or to engage in any particular investment strategy. The information provided is not warranted as to completeness or accuracy and is subject to change without notice. The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, are not guaranteed for accuracy or completeness, do not reflect actual investment results and are not guarantees of future results. All investments involve risk, losses may exceed the principal invested, and the past performance of a security, industry, sector, market, cryptocurrency, or financial product does not guarantee future results or returns. Dogecoin is a speculative and highly volatile asset susceptible to pump-and-dump schemes.
At the time of publication, Dogecoin is around $0.08 per coin.