On the 30th of December, the price of Dogecoin, the leading meme coin of the industry and Elon Musk’s favorite cryptocurrency, decreased by more than 7% over the past 24 hours. According to data from CoinGecko, DOGE, the eighth-largest cryptocurrency by market cap, is currently, as of this writing, trading at around $0.07. And over the past week, the price of the leading meme coin plummeted by more than 13%.
The reason behind this hefty decrease in the price of the famously volatile meme coin is related to speculation over potential changes to the energy-intensive proof-of-work mining model, the model that currently powers the meme coin. And rumors that Dogecoin will undergo a transition to a more energy-efficient proof-of-stake model are circulating again on social media. These social media posts led the core developers of Dogecoin to deny that any major move was imminent.
On the 29th of December, in a tweet, Michi Lumin, a principal engineer at the Dogecoin Foundation, said that social media influencers that have tweeted about the coin and potential changes ahead do not have the inside knowledge on what’s going on with Dogecoin. Michi said that there is also a plan to provide a proposal to the community regarding a potential proof-of-stake transition. However, Michi also suggested that this approach would differ from traditional proof-of-stake in multiple ways.
According to Michi Lumin, it would be impossible to enforce this type of shift without first having the approval of the majority of Dogecoin’s node validators. Michi claimed that the Foundation of Dogecoin could not unilaterally force such a move. While Ethereum, the second-largest cryptocurrency in the market, is the highest-profile example of a cryptocurrency that transitioned to a proof-of-stake consensus mechanism in September this year.
Although proof-of-stake is a more energy-efficient way of powering a decentralized blockchain platform, some from the industry believe that it’s less secure than a proof-of-work model. And this is the reason why the price of DOGE decreased as much over the past week.