Recently there has been a lot of action on Doge Coin. You know, the Coin that has a little dog on it? Yes, Doge Coin is planning, and has executed a successful bridge to Ethereum, but this does not mean things are going to change overnight. In fact, unless you are a developer or an experienced programmer, you will probably not even use the service.
What is it?
The service allows for Doge to be used in a smart contract to be traded with Ethereum Tokens, where the Smart Contract acts as a broker on the ethereum blockchain. It is a somewhat complicated process to explain, so we will let the article explain it over at Ross’s Blog:
Before I start, we have a bit of a naming problem. This happens with decentralised projects, anyone can name anything and… well now’s there’s Dogethereum and Dogethereum and they’re very different projects. Both are made by teams external to the main Dogecoin Core team, but otherwise they’re very different. One is a token issued on the Ethereum chain based on coins held at a fixed point in time, the other (the one we’ll be talking about today) is a smart contract and supporting tools for transferring the value of Dogecoins onto the Ethereum chain and more importantly, back again. I’m going to refer to this as a Doge/Ethereum bridge, or simply bridge.
If you’re ready to jump into the technical details, you can see the team’s own docs at https://github.com/dogethereum/docs . Otherwise lets start with some background.
For Dogecoin, being able to use Dogecoins with Ethereum smart contracts gives us a whole new world of functionality. Any Ethereum smart contract that can use general tokens, can work with the bridge tokens. On-chain multisig wallets, bounty contracts (such as the one for the Doge/Ethereum bridge) etc. are suddenly all available to the Dogecoin ecosystem.
For Ethereum, it provides a long term currency that’s well established, and less volatile, making it perfect for use in transactions.
I dislike casino metaphors, but they’re effective. Think of poker chips. You exchange currency you have for poker chips of equivalent value, can use them within the casino, and when you’re finished at the casino you cash your chips back out to currency. The bridge works in a similar way; you can exchange native Dogecoins for a token on the Ethereum chain, use them as you would any other token, and exchange them back for Dogecoins when you’re done.
What Does This Look Like?
The tricky part is how you do that exchange in a decentralised environment. We can’t have a single party handle the exchange (as you would in a casino), because there’s no trust relationship. Instead we have a smart contract on the Ethereum chain handle issuing tokens for Dogecoins. There’s a similar contract for Bitcoin already, but the Scrypt hashes Dogecoin uses are much more expensive to validate, which has been a challenge. The harder part has been getting the coins back, though.
Hopefully this sheds a little bit of information on why Doge has been bullish lately, and to do some research before jumping on a pump, which could potentially turn into a dump, and that speculation can be a strong motive for price gains. If you like what you see on this site, and this article helped, or any other article, donate some ETH to: