Manhandled, can Dogecoin bounce back thanks to a reduction in fees on the blockchain? This is what Elon Musk and the creators of DOGE come up with.
The DOGE course is in sharp decline in terms of value. Its price is now around $ 0.22. Since the cryptocurrency crash, Dogecoin has therefore lost more than 60% of its capitalization. And one analyst estimates, with charts supporting it, that it could fall another 67%.
The solution to make DOGE sustainable is to strengthen its uses. The latter remains today mainly a speculative crypto-asset. This is its strength, but now also its weakness.
Reduce fees from 1 to 0.1 DOGE per transaction
Many other crypto-assets, like SHIB, compete in this sector. Their advantage: a lower price and therefore greater upside potential. To be sustainable, Dogecoin must develop new uses, such as payments.
This is precisely the path advocated by its developers, once again with the support of Elon Musk, a great promoter of Dogecoin. To succeed in making DOGE a payment asset, they are therefore proposing a radical measure.
The creators of the cryptocurrency offer an update to the blockchain. This would have the effect of drastically reducing the fees applied to transactions. These are 1 DOGE at the moment.
The developers propose to reduce them to 0.1 DOGE. Enough to encourage the use of Dogecoin as a viable means of payment, likely to compete with other more traditional payment solutions.
Minors receive income other than fees
However, a crucial step is necessary to achieve this reduction in fees. Dogecoin being a decentralized blockchain, developers must rally miners and node operators to their proposal.
At least two-thirds of the network must adopt the update. However, for minors, such a measure would mean a 90% drop in transaction fees. Acceptable, provided that the volume of transactions increases strongly.
However, ensures DOGE lead developer Michi Lumin, unlike Bitcoin or Ethereum, fees are not the main component of miners’ income. They receive 10,000 DOGE per block. As for the fees, they are 20 to 30 DOGE.
Elon Musk agrees with the update, calling it ” significant improvement “. However, to come to fruition, this drop in fees will have to convince far beyond just Musk’s person. And the trend followed by the price of DOGE may not encourage miners and operators to take risks.