A prominent Dogecoin core developer has recently voiced concerns over the potential transition of Dogecoin from its current Proof-of-Work (PoW) consensus mechanism to Proof-of-Stake (PoS). In fact, he has gone so far as to suggest that such a move might lead to their departure from the project.
It all started on 20 August 2023 when Marshall Hayner, CEO of blockchain startup Metallicus, posed a question on Twitter regarding the potential staking of Dogecoin ($DOGE). The poll results indicated a split opinion, with 39.9% of the 2,200 participants expressing interest in staking Dogecoin, while 60.1% were against it.
Mishaboar, identified as a Dogecoin core developer, weighed in on the topic, providing a nuanced perspective. Here are the key takeaways from his response:
- Definition of Staking: Mishaboar clarified that if by “staking” Hayner referred to a lending-based model, he would be against it due to the associated high risks. He mentioned that such models are particularly risky unless one has insider information.
- Switching to Proof of Stake (PoS): Mishaboar expressed skepticism about Dogecoin transitioning to a PoS consensus mechanism. Based on his observations over the past two years, he indicated that he might prefer to shift to another Proof of Work (PoW) cryptocurrency, albeit with a customized dog logo in his wallet.
- Research on Consensus Mechanisms: While Mishaboar is not against researching alternative consensus mechanisms, he emphasized the importance of responsible research. This entails relying on solid data and steering clear of undue hype. He expressed concerns about many PoS chains, stating that they often:
- Underdeliver on their promises.
- Exhibit high levels of centralization, often controlled by wealthy developers with significant holdings.
- Have faced catastrophic failures.
- Offer a user experience that can be frustrating, drawing a comparison to Ethereum which he likened to “highway robbery”.
- Concerns with PoS: Mishaboar raised concerns about the feasibility of PoS, especially when a significant portion of a cryptocurrency’s supply is held by exchanges. He also highlighted potential regulatory challenges associated with PoS.
- Advantages of PoS: Despite his reservations, Mishaboar acknowledged some benefits of PoS, such as reduced energy consumption and potentially faster transactions. However, he argued that:
- Many transactions don’t require the speed that PoS offers.
- Faster transaction speeds can be achieved through other means, like payment channels or integration with payment providers. However, he also noted that these solutions might come with their own centralization issues.