Dogecoin’s price is down 13% over the past week, falling 6% to just under $0.07 in the last 24 hours alone, according to CoinGecko data.
The notoriously volatile meme coin is down this week amid speculation about potential changes to the energy-intensive proof-of-work mining model currently powering the cryptocurrency.
Rumors that Dogecoin will undergo a transition to a more energy-efficient proof-of-stake model — similar to the long-awaited Ethereum merger in September — are once again circling social media, prompting one of Dogecoin’s core developers to deny it outright forthcoming.
Michi Lumin, a senior engineer at the Dogecoin Foundation, tweeted on Wednesday that social media influencers who tweeted about the coin and possible upcoming changes “don’t really know what’s going on with #dogecoin”.
However, Lumin said there is a plan to submit a proposal to the community regarding a possible proof-of-stake transition, although the developer has indicated that the proposed approach “would deviate from the traditional one [proof-of-stake] in many ways.”
More information for you. Influencers, even if they have millions of views and followers, even if they speak with authority, don’t really have the inside information on what’s going on #dogecoin. Just because you say a validation method is changing doesn’t mean it is.
— Michi Lumin (@michilumin) December 29, 2022
Lumin also said that it is impossible to enforce this type of move without first having the consent of the majority of Dogecoin’s node validators, and that the Dogecoin Foundation cannot unilaterally enforce such a move.
Ethereum is the most prominent example of a cryptocurrency that, as mentioned, has transitioned to a proof-of-stake consensus mechanism and completed its much-anticipated merger event in September of this year.
While proof-of-stake is a more energy-efficient way to run a decentralized blockchain platform, some believe it is less secure than a proof-of-work model. Despite the hype surrounding the Ethereum merger and energy savings, the price of ETH has fallen sharply after the transition is complete.
Dogecoin remains the second-largest proof-of-work cryptocurrency with a market cap of nearly $9.3 billion, but falls well short of the $316 billion market cap that Bitcoin boasts.
DOGE is down 61% over the past 12 months, but the coin has outperformed some other notable cryptocurrencies over the course of 2022. Solana, for example, is down about 95% of its value year-to-date, due in part to FTX contagion. It briefly fell out of the top 20 cryptocurrencies by market cap on Thursday.
Dogecoin has even outperformed Bitcoin in terms of preservation of value this year, as the top cryptocurrency is down around 65% since the start of 2022.