Before Dogecoin (DOGE) can become “the future currency of the internet and people”, it needs to undergo some minor changes. At least that’s the view of Vladimir Tenev, CEO of brokerage Robinhood. In a series of messages fired on Twitter on Thursday (14), the executive details how, for him, memecoin can surpass other more popular cryptocurrencies and become the main crypto asset. Tenev doesn’t seem worried that most of the market still sees Dogecoin as a shitcoin or a fun joke. Perhaps he was inspired by the recent demand by billionaire Elon Musk, CEO of Tesla, that Twitter integrate the DOGE as its main operating currency. In his messages, he begins by highlighting how the low fees associated with Dogecoin are higher than the “1-3% charged by major card companies”. The average cost of using DOGE in April, according to BitInfoCharts, is between $0.19 and $0.30. As a comparison, Bitcoin is between $1.35 and $3 over the same period, while Etehreum costs are even higher. Despite the low rates, Tenev says the DOGE’s speed still leaves a lot to be desired. “The processing time for each block is one minute,” he says. “It’s still a little long to make payments. A time of ten seconds would be more appropriate because it is less than the average time spent on credit card purchases.” For Tenev, with one minute to record transactions on the blockchain, Dogecoin is still far from becoming competitive as an effective means of payment when compared to Visa and Credicard, for example. With a minute of registration and a block of its blockchain being one megabyte, the cryptocurrency can process around 40 transactions per second (TPS). Despite being a much higher number than both Bitcoin and Ethereum, it is still weak compared to card issuers. As a comparison, Visa’s network can, in theory, support up to 65,000 TPS.
As a comparison, Visa’s network can theoretically handle 65,000 tps. Doge would need to be able to significantly outperform Visa, which entails increasing throughput by at least 10000x. Fortunately, this is easy to solve simply by increasing the block size limit.— VLAD (@vladtenev) April 14, 2022
Therefore, to stand out in the crypto scene, Dogecoin would have to outperform Visa, which means improving its performance by at least 10,000 times. Fortunately, this can simply be done by increasing the blockchain block size limit. This is the heart of Tenev’s idea. Increasing the DOGE block size or the amount of data stored in each block would also result in increased network speed, says the CEO. He suggests that the developers behind the cryptocurrency should aim to get to 10 gigabyte blocks. However, larger blocks have a counterpart. As crypto networks spread, so too does the burden on the hardware to keep records of blockchain transactions. At any given time, this load becomes so great that it becomes impossible for individual enthusiasts to maintain the network. This can then lead to the centralization of the operation – one of the users’ concerns. This tradeoff of speed versus centralization “would require more sophisticated hardware,” admits Tenev. This would make DOGE mining more expensive for enthusiasts. But for the CEO of Robinhood, “it’s a fair trade-off.” *Translated by Marcelo Cabral with authorization from Decrypt.co.
