Dogecoin proves it is a serious blockchain, reverses the number of Ethereum transactions
Dogecoin is experiencing an increase in network spam so dramatic that it is now processing more transactions than the Ethereum blockchain.
Over the past week, the memecoin network handled more than 7.9 million transactions, up almost 11% on Ethereum’s 7.2 million and more than double Bitcoin’s number.
Not bad for a chain that has handled just 30,000 daily transactions on average since 2015 – less than 5% of Ethereum’s.
The culprit is Bitcoin Ordinals. Or more precisely, opportunistic crypto fans eager to take advantage of the inscription hype.
Bitcoin Ordinals are not exact the same as the NFTs you can find on Ethereum or Solana. These non-fungible tokens are minted via smart contract and adhere to their own token standards enforced by wallets, marketplaces and other key infrastructure across the Web3.
Ordinals are instead defined by data “inscribed” in individual satoshis (rate of cards). Rate is BTC’s smallest denomination: 0.00000001 BTC currently worth $0.00027. A craft developer recently figured out how to forever fill batch with special properties, such as enough data to render a JPEG or DOOM clone.
BRC-20 tokens – a play on Ethereum’s ERC-20 standard for run-of-the-mill tokens – quickly followed Ordinals. Hype for Bitcoin-powered altcoins and collectibles sparked a renaissance for blockspace demand, driving up fees while pushing transaction numbers and mempool backlogs to record highs.
If we consider Ordinals in the same genre of digital assets as Bored Apes, Bitcoin is now the number two blockchain for NFTs behind Ethereum.
Doge see, Doge do
Due to similarities between Bitcoin and Dogecoin (a code fork of a code fork of Bitcoin), it didn’t take long for developers to code methods to mint Dogecoin tokens in much the same way as Ordinals and BRC-20s – except with a “D ” instead of a “B.”
But Bitcoiners have several platforms where traders can exchange Ordinals and BRC-20s, including crypto exchange wallets. Dogecoin does not.
Bitcoin’s BRC-20s in particular have been aided by an experimental token standard, similar to Ethereum’s ERC-20s.
The standard set enough technical parameters so that infrastructure (wallets, marketplaces and the like) can facilitate trading and other things without getting headaches, like duplicate entries and blatantly broken code.
BRC-20 and Ordinals alone have recently accounted for more than half of all Bitcoin transactions, and it is unclear how many DRC-20-related transactions are flowing through Dogecoin right now. No tool has been built to sort DRC-20 outputs from others, making it difficult to quantify exactly how many Dogecoin tokens are minted every minute.
In any case, it is certainly an impressive part. Multiple DRC-20 token transactions exist in practically every single block right now (which happens every minute on average). They are easy to spot as they usually come with a fee of 0.001 DOGE ($0.000071).
Pseudonymous Dogecoin developer inevitable360 told Blockworks that they classify DRC-20 transactions like these as spam because anyone can clone or replicate the exact same token.
Unlike Bitcoin and Ethereum, there is no DRC-20 token standard for Dogecoin. So many tokens are being minted under the same name, making it virtually impossible to form a legitimate market around them.
There is still legitimate Dogecoin activity along with speculators minting Dogecoin tokens via one or two wallets that support them in their current form (which has been caught raising fees to apparently capitalize on the hype).
The median transaction value is almost 77 DOGE ($5.46). If the DRC-20s were truly the overwhelming majority, that number would be far lower.
It may be spam, but it is honest work
For what it’s worth, much of the recent Bitcoin activity has also been flagged spam: effectively worthless transactions with no reason to exist but to exist; abundant simply because the creation is cheap and the potential gain is great.
Given: Ethereum layer-2 networks like Arbitrum and Optimism each process tons of transactions. More than a million per day for the former, in fact. If we add them with Ethereum, the Dogecoin blockchain dominates by far.
Ethereum fees are also high right now. High enough to apparently discourage some useless trading, especially NFTs. But there is something to be said for Dogecoin in this case.
Many deride Dogecoin as a joke carefully crafted to trap crypto newbies into gambling on memecoins during bull runs.
There may be an element of truth in that. But historically, Dogecoin has served as a lucrative alternative for bitcoin miners at times when mining BTC simply wasn’t profitable. An unsung hero, in those cases.
Dogecoin can also be merged with Litecoin, allowing miners to share hashrate between the two to provide some element of flexibility to support a multi-chain future. It just so happens that right now there seems to be more activity related to DRC-20 speculation today than that related to the use of the Ethereum mainnet in general.
And Dogecoin still has lower median fees: $0.00096 compared to Ethereum’s $3.13 – no doubt an unpleasant fact for many ETH fans.
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