Dogecoin, originating as a humorous addition to the cryptocurrency scene, found itself on the brink of peril in 2014. Its rapid speed of currency issuance led to impending exhaustion of block rewards, threatening a potential attack on its blockchain. It was then that Charlie Lee, creator of the Litecoin blockchain, stepped in, suggesting a “merged mining” agreement which allowed Dogecoin to harness Litecoin’s network security – a move that would ultimately save the beleaguered cryptocurrency.
Fast forward to the present, Dogecoin’s DOGE token is among the world’s leading cryptocurrencies, with a market value of $11 billion. It’s been receiving added attention from Elon Musk who often references DOGE on his X platform. However, without undermining the scale of Dogecoin’s success, it’s important to note the critical role that Litecoin serves in securing Dogecoin’s network.
While some in the blockchain realm may label Litecoin as a “ghost chain”, implying the stagnant nature of its technological development, it cannot be ignored that Litecoin continues to fortify Dogecoin from potential threats. This is particularly pertinent, as Litecoin is slated to undergo its highly anticipated quadrennial blockchain “halving”.
In traversing back to Litecoin’s inception in 2011, it reveals more than just the birth of a new network. It establishes a historical connection between Litecoin, Bitcoin, and Dogecoin. All three blockchains employ a “proof-of-work” system, drawing in “miners” to process transactions and secure the network in exchange for a “block reward”, a mix of fluctuating transaction fees and a pre-established “subsidy”.
Yet, Dogecoin’s issuance model deviated from Bitcoin’s original parameters. Where Bitcoin and Litecoin gradually issue currencies, Dogecoin’s issuance paralleled the immediacy of a ‘100-meter dash’. This rapid pace started to deplete the fixed supply of 100 billion DOGE quickly, causing network security to plummet.
The situation deteriorated to such a point that Dogecoin had to hard fork allowing “merged mining” with Litecoin, enabling miners to secure both blockchains concurrently. Subsequently, Litecoin provided the necessary security to Dogecoin, preventing potential threats.
Fast forward, Dogecoin routinely generates blocks, and the 100 billion DOGE cap has been lifted to allow a continuous 10,000 DOGE reward per block. This change underscores the ability of Dogecoin to adapt in crisis – an attribute intrinsic to the very ethos of cryptocurrency markets.
Source: Coindesk
