DogeCoin network congestion raises growing concerns.
Dogecoin (DOGE), a cryptocurrency inspired by a widely-loved meme, is facing technical hurdles as its network becomes increasingly congested due to "scripting." Scripting involves data messages being directly stored on the blockchain. This has raised concerns about issues occurring on the network.
Network congestion of Dogecoin raises concerns
According to a tweet by Timothy Stebbing, a developer and member of the Dogecoin organization, the network is currently experiencing issues due to a large number of scripts. He describes the situation as "Dogecoin is currently sick," emphasizing the urgency of finding solutions.
The congestion issue stems from the dual purpose of this blockchain: facilitating financial transactions and storing scripts, similar to NFTs on other blockchains. However, unlike NFTs, many in the DOGE community view scripts as having no real value or practical use, labeling them as "bloatware" or "spam."
According to Stebbing's report, the data overload is causing the network to become "stuck/unresponsive." Some exchanges have reached out to the Dogecoin Foundation expressing concerns about the network's sluggishness.
Dogecoin Foundation and its core team are actively researching solutions for this issue.
Stebbing mentioned exploring options ranging "from friendly to extreme," suggesting that moving data off-chain at the protocol level could be a potential solution. This would free up space on the Dogecoin network for core functions like financial transactions.
Network congestion issues are not entirely new. Dogecoin contributor Tdogewhisperer had previously flagged an increase in the number of transactions, reaching a peak of 1.9 million within a 24-hour period. However, he clarified that these transactions were primarily for creating scripts rather than transferring funds.
Adding to the complexity is the recent movement of 100 million Dogecoins (about $7.8 million) to Robinhood, a popular cryptocurrency platform known for attracting retail investors. This has sparked concerns about potential speculative activities and its impact on the already volatile price of DOGE in recent days.
Brief overview of DOGE price
DOGE is currently trading around $0.07, up 1.4% over the past 7 days but down 1% since the beginning of February. Other major memecoins like Shiba Inu, BONK, and PEPE are all in the red with losses ranging from 4% to 9%. This downward trend is casting a shadow over the once-booming memecoin market.
Despite the prolonged downturn, Dogecoin has shown remarkable recovery potential. Its price drop is the smallest among memecoins, signaling that it may weather the storm better. Are whales the secret weapon here?
Whales Join the Game
Meanwhile, on-chain data suggests strategic moves by whales, indicating significant buying activity from large investors in DOGE. Estimates indicate that whales have purchased around $27 million worth of DOGE in the past two weeks, potentially accumulating over 40 billion coins. This substantial buying spree suggests that whales see long-term value in Dogecoin.
