Dogecoin (DOGE), which was previously founded as a meme token, has now become one of the most popular digital currencies.
Just how decentralized is DOGE?
Although Dogecoin is portrayed as a decentralized network, the opposite seems to be happening in practice. Based on data coming from CoinMarketCap, the top 10 Dogecoin addresses currently control 48.02% of the meme token’s supply. In fact, the largest holder controls 25.28% of the supply, which currently stands at 132,670,764,300.
In total, the Dogecoin network has 4,508,886 addresses. The top 20 of these currently manage about 54.76% of the total supply. The top 50 currently manage about 62.96% of the total supply. That the top 10 manages so many coins is not a good sign for the decentralization of the network.
When you compare this with a cryptocurrency like Bitcoin (BTC), you see that the top 10 Bitcoin addresses control ‘only’ 5.38% of the total supply, while the total supply of coins is also lower.
Price manipulation is so relatively easy
A major danger of such a centralization of supply is the sensitivity to price manipulation. When you own as many coins as the top 10, it is relatively easy to significantly influence the price of the coin.
Despite the meme token’s centralization concerns, more and more members in the DOGE community are asking for the coin to switch from the Proof-of-Work (PoW) mechanism to the Proof-of-Stake (PoS) mechanism . Earlier this year, Ethereum (ETH) did the same, successfully. However, it is not yet known whether the network will actually make the switch.