Dogecoin to be Integrated in Ethereum’s Smart Contracts
In a recent discussion on Reddit, Vitalik Buterin said that “joke coin” Dogecoin would be moved onto the Ethereum network. In particular, it covers usage of DOGE coins in Ethereum’s smart contracts.
DOGE employment in Ethereum will use two-sided pegging (sidechains), which, according to Buterin, will free the Dogecoin community from possible risks associated with Ethereum. The only obstacle for the integration is in peculiarities of the scrypt algorithm underlying Dogecoin operation. Earlier, Ethereum started developing similar solution for Bitcoin.
“Basically, the approach would be on the ethereum side to modify btcrelay into dogerelay (the hardest part there being implementing scrypt in EVM code […]), and then create an ethereum contract where you can burn 1 DOGE to create 1 E-DOGE,” Buterin said.
To perform a reverse conversion, a user will have to undertake similar procedures, i.e. burn 1 E-DOGE and get 1 DOGE. The converting employs subsequent blockchain voting. Ethereum miners will be voting +1 or -1, thus confirming or rejecting the receipt’s vailidy. As soon as it obtains +100, the user gets DOGE coins. According to Buterin, this scheme requires a softfork (small alterations to the code) at Dogecoin side, and a smart contract at Ethereum side.
Notably, Buterin said Dogecoin was his second favourite cryptocurrency. The Dogecoin community reacted positively to the integration.
Dogecoin was introduced on December 8, 2013 as a “joke coin”, however, shortly after it gained its own circle of followers, and as early as in January 2014 its market cap reached $60 million. Currently, Dogecoin with its cap of just under $16 billion is the fifth most important cryptocurrency in terms of market cap.
The sidechain technology offered in the integration project allows for adjusting interaction between blockchains of different currencies. The underpinning algorithm thereof is of minor importance. Apart from obvious convenience of value converting, sidechain also offer issuance of coloured coins, cryptoshares, and other assets without “contaminating” the basic asset’s blockchain.
One of the sidechain industry leaders is Blockstream, which has launched the first exchange-focused app employing the technology in October.
Meanwhile, Ethereum hype continues gaining momentum. In October, Microsoft integrated the option of using the platform’s blockchain in development activities on Azure. Several days ago, German startup Slock.it announced development of computer for operation in the Ethereum network.
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