Thread by @vladtenev

Can #Doge truly be the future currency of the Internet and the people? As we added the ability to send/receive DOGE on Robinhood, I’ve been thinking about what that would take.

First off, transaction fees have to be vanishingly small. We’re already there. As of last Nov’s 1.14.5 update, typical transaction fees have been ~$0.003 - which you can experience on @robinhoodapp - compared to the 1-3% network fees that major card networks charge.

Ideally, the block time (time between successive blocks being added to the chain and to verify a transaction) should be fast enough that the transaction can be recorded in the next block in less time than it takes to pay at a point of sale terminal.

But it shouldn’t be so fast that miners start building up too many competing chains and waste excessive amounts of energy establishing consensus.

Doge’s current block time is 1 minute. This is a bit on the long side for payments – a ten second block time would be more appropriate as it would be less than the typical time spent completing a debit card transaction.

Currently, with a 1MB block size and 1 minute block time, Dogecoin’s throughput is about 40 transactions per second (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.

Moving to a 1GB (and later 10GB) block size limit would provide all of the throughput a global currency would need for the foreseeable future. L2 solutions are not necessary to solve this problem.

Now, critics will claim that this will come at the cost of enthusiasts being able to run a full node on a Raspberry Pi at home. Processing 10GB in blocks per minute will require more sophisticated hardware. And I think that’s actually a fair tradeoff.

Another criticism of Doge is that it’s inflationary and the supply is infinite, as opposed to Bitcoin’s finite supply of 21M coins. ~5B new Doge are created every year, and the current supply is about 132B. This results in a current inflation rate of <5% – less than USD!

Moreover, the fixed issuance means that the inflation rate actually declines over time, and in a couple of decades it will be below 2%.

Dogecoin core devs, I would focus on one thing: coming up with a good process for increasing the block size limit over time. Let me know what you all think!