DOGE Now Second Largest PoW Crypto
All eyes were on the Ethereum merge on September 15th, which concluded flawlessly. Once Ethereum shifted from being proof-of-work (PoW) to proof-of-stake (PoS), Dogecoin took its former place as the second-largest PoW cryptocurrency by market cap. The memecoin that started as a parody of Bitcoin is now the silver medalist to Bitcoin in the top spot.
What is Dogecoin?
Dogecoin (DOGE) is a popular memecoin that has gained much popularity. With a community known for their generosity and acclaim from the likes of Elon Musk, dogecoin has enjoyed a rise in popularity, despite critics who still see it as a joke.
Taking second place in proof-of-work coins does not provide any intrinsic value to DOGE. However, it does raise its profile; and this is crucial for the dogecoin team who earlier this year released their ambitious roadmap to become the “currency of the internet.”
With efficient utility, rapid integration into existing hardware, and its scalable GigaWallet Project, dogecoin is well on its way to becoming a predominant currency that is anything but a joke.
Proof of work coins
The few remaining PoW consensus blockchains are now facing pressure from critics to change to PoS because of climate impact concerns. However, many crypto experts have also found these criticisms to be misplaced. The top five PoW cryptocurrencies are currently ranked within the top 30 of all cryptocurrencies by market cap.
Proof-of-Work cryptocurrency rankings
Bitcoin (#1) – $378 billion
Dogecoin (#10) – $$7.83 billion
Ethereum Classic (#18) – $4.69 billion
Litecoin (#22) – $4.01 billion
Monero (#27) – $2.65 billion
This signals that the market demands the highest form of security and decentralization that crypto can provide, and that can only come from PoW consensus mechanisms. However, in terms of efficiency and cost effectiveness, PoS is the clear leader.
But to think that Ethereum’s merge will successfully pressure other PoW coins like DOGE to merge as well is fantasy. PoW has its own inherent advantages that PoS cannot afford. The market will decide which is the best consensus mechanism.
PoW consensus mechanism
The disadvantages of PoW consensus mechanisms are only improved to some degree by PoS. Climate impact arguments notwithstanding, the pros and cons of PoW put it squarely in contrast to PoS.
Pros of PoW
Most decentralized method of transaction verification
Highest level of security
Miners earn crypto rewards
Cons of PoW
Costly energy consumption
Mining equipment is very expensive
Transactions are slow, inefficient and costly
Despite Ethereum’s merge to PoS, the network still operates a PoW coin, ETHPoW (ETHW). However, the ETH PoS system is providing major blockchains and altcoins more efficiency, lower gas fees, and faster transaction times. It remains to be seen how these factors will impact altcoin prices on the open market.