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Dogecoin rose to fame in 2021 by gaining over 18,000% within a few months, grabbing the attention of retail and institutional cryptocurrency investors worldwide. From a mere meme coin designed as a joke, Dogecoin developed to become a famous cryptocurrency and was listed in the top 10 largest crypto assets by market capitalization.
With so much attention and a sudden increase in value, many people are interested in investing in Dogecoin, and mining DOGE is one such way.
So, is Dogecoin mining profitable? The short answer is that you might not get rich mining Dogecoin, but it can be a way to invest in it.
Read on to learn everything you need to know about Dogecoin and how to mine Dogecoin in a few simple steps.
Understanding Dogecoin
Dogecoin was created by software developers Billy Markus and Jackson Palmer in 2013. The Dogecoin network was created to make fun of the speculative nature of cryptocurrencies by adopting the famous Shiba Inu dog meme as the logo of the new blockchain project.
The project was an instant hit and quickly gathered a huge following on Reddit, becoming part of the top 50 largest cryptocurrencies in the world.
In 2021 Dogecoin sharply rose in value after gaining the attention of Elon Musk, Snoop Dogg, and other celebrities. The network benefited from the GameStop short squeeze saga, and its subsequent listing on Coinbase was instrumental in the asset’s rise to fame.
Dogecoin laid the foundation for other meme coins like Shiba Inu and Floki Inu, launched as a parody or inside joke rather than as a digital product that actually has some utility. Although initially created as a joke, Dogecoin has also found utility as SpaceX revealed a rideshare mission to the moon funded entirely by Dogecoin.
Mining Dogecoin
Having gained a brief understanding of the coin, let’s learn how to mine Dogecoin. The Dogecoin network operates based on the Proof-of-Work protocol, meaning the consensus mechanism requires computational processing power to solve a mathematical problem to mine new DOGE. Miners verify and validate transactions and secure the network from potential attacks and malicious entities.
Miners use their devices to create a “hash” that’s randomly generated and has to equal or be lower than the value of the “target hash.” The first miner to generate the hash gets rewarded with newly minted DOGE.
The method of creating new blocks has been employed by Bitcoin (BTC), Ethereum (ETH), and Litecoin (LTC). As miners solve computational problems, they verify transactions, and new blocks are added to the chain. The Proof-of-Work mechanism provides a high level of security and a decentralized method of verifying transactions. It rewards miners for their efforts in securing the network. On the flip side, crypto mining has been criticized for being energy-intensive and requiring high transaction fees and expensive equipment to run.
Dogecoin uses the Scrypt mining contracts for an added layer of security, while other Proof-of-Work networks like Bitcoin use the SHA-256 algorithm. Scrypt allows new Dogecoin to be mined faster and doesn’t require large amounts of energy. Litecoin mining also uses Scrypt, which makes mining Litecoin and Dogecoin much faster and less energy-intensive than Bitcoin. LTC and DOGE use “Merge Mining,” meaning they can be mined simultaneously since they share the same mining algorithm.
Blocktime for the Dogecoin blockchain is one minute, and the reward per block is pegged at 10,000 DOGE. 10,000 DOGE are minted every minute. Currently, the network has a circulating supply of 132,670,764,300 DOGE and has no maximum supply cap, unlike other PoW networks like Bitcoin and Litecoin.
Choosing a Mining Method
The several options available to individuals interested in mining Dogecoin are solo mining, cloud mining, or joining a Dogecoin mining pool.
Each of the methods has its pros and cons, and there are some things about each you need to know to start your mining operation,
Mining Dogecoin solo was an excellent method in the early days because only a small number of individuals participated in the process, making it easy to earn rewards. As more persons joined, the odds of solving the mathematical problem first were significantly reduced.
Joining Dogecoin mining pools is one of the best ways one can mine Dogecoin. A Dogecoin mining pool is a group of individuals that share computational power as a single unit to mine cryptocurrencies. The rewards from mining are shared amongst all the participants according to the proportion of computational power contributed to the pool.
Dogecoin cloud mining is another method to start mining Dogecoin without spending money to buy equipment. Instead, individuals rent the computing power by paying a subscription fee, and DOGE is mined via a mining pool with rewards shared based on the amount of computational power hired. Top cloud mining services like Genesis Mining and Eobot have fewer contracts for Scrypt mining., but you can get contracts on hashing power marketplaces like Nicehash. NiceHash is different from other cloud mining pools since it pairs hashing power with buyers, i.e., the hashing power for sale isn’t from one mining company but many sellers.
Dogecoin Mining Equipment
To mine Dogecoin as an individual or through joining a mining pool, there are certain prerequisites to fulfill. The requirements include getting Dogecoin mining hardware and software equipment for successful mining. Below are the hardware requirements to start mining DOGE.
1. CPU
Any laptop’s or desktop’s computer processing unit (CPU) can be used to mine Dogecoin. However, the computing power of CPUs may not be enough to gain a competitive edge in mining Dogecoin today. Furthermore, constantly running mining software on computers or desktops might have the unintended effect of overheating, leading to damage.
2. GPU
Graphics processing units (GPUs) are a step up from CPUs. GPUs like the ASUS RX VEGA 64 or the Nvidia GeForce GTX can be used to mine Dogecoin, but they still can’t compete favorably with an application-specific integrated circuit. Also, they are generally not suited for larger mining operations.
3. ASIC
An application-specific integrated circuit (ASIC) is an improvement from GPU mining and is considered the best option for individuals serious about mining Dogecoin. ASICs are hardware devices custom-built to generate hashes, making them perfectly suitable for mining. ASIC mining is expensive, but you can use the Bitmain Antminer L3+ miner, one of the cheapest in the market.
4. Android
You can mine Dogecoin on Android devices through the Dogeminer application. The app is lightweight and easy to use but has the downside of overheating your mobile phone or tablet.
Dogecoin Mining Software
After choosing your hardware device, you need software to begin cryptocurrency mining. For CPUs, the CPUMiner from Pooler is an easy-to-use mining software to get started on Dogecoin mining.
For GPUs, software options include EasyMiner, CudaMiner, and CG miner compatible with a broad range of GPUs.
For ASIC, CGMiner and EasyMiner are highly recommended, and many miners use the MultiMiner software to mine Dogecoin.
Storing Your Dogecoin
Now, you need to create a wallet to store your mined Dogecoins. Several Dogecoin wallets with various functionalities are available to miners:
1. Hardware Wallets
Hardware wallets (cold storage) are the safest way of storing digital coins. These are non-custodial wallets in the form of USB sticks that don’t require connectivity to the internet. Hardware wallets for storing Dogecoin include the Ledger Nano S and the famous Trezor Model T.
2. Software Wallets
Software wallets (hot storage) are connected to the internet at all times and store your crypto assets online. They can be downloaded to your smartphone or computer and may be custodial or non-custodial. Software wallets are more convenient but less secure than hardware wallets, meaning they’re better suited to inexperienced users with smaller amounts of DOGE. One of the most secure software wallets is the CoinStats Wallet, where you can store all your assets safely and track their growth in real-time. Other examples include the Trust Wallet, ZenGo, Guarda, and Exodus.
3. Online Wallets
Online wallets are often provided by cryptocurrency exchanges and are a quick but less secure way for users to start storing their Dogecoins. Leading exchange wallets include Coinbase Wallet, Binance Wallet, and Gemini Wallet, amongst others.
Mining Dogecoins With ASIC
Now, let’s explore mining Dogecoin with ASICs, specifically the Bitmain Antminer L3++, the most popular hardware to mine the cryptocurrency.
1. Set up the ASIC Miner
Connect the ASIC miner to a power unit and insert the Ethernet cable into the miner’s provided port to connect the device to the local area network.
2. Find the Miner on Your Network
After plugging in and running the connection, the next thing is finding the network’s mining rig. Miners can use software to accelerate the process and should ensure that the IP range and local IP range are a match before clicking scan.
3. Access Antminer
Now, you must find the Antminer option upon completing the scanning process and click it. Input your user name and password to sign in to the Antminer page on your browser.
4. Join a Mining Pool
Join a suitable mining pool by creating an account. Mining Dogecoin will be more efficient by joining a mining pool due to the increased hashrate it offers. A mining pool lets you mine Dogecoin effectively if you don’t have enough computing power to compete with mining farms. Leading Dogecoin mining pools include Zpool, Zergpool, Alkapool, and MultiPoolMiner.
5. Connect Your Devices to the pool
Once you have an account with a mining pool, you must use this account to connect your mining machines to one of the mining pool’s servers.
6. Set up a Dogecoin Wallet
Register your payout address with your pool account. If you don’t have a Dogecoin wallet, you must set up your personal wallet.
7. Start Mining
Most mining pools provide a dashboard or an app to keep track of your mining activities. Once you have mined some Dogecoin and received your block rewards, you can cash them out to your wallet.
Compared to Bitcoin and Ethereum, Dogecoin uses smaller amounts of computational power to mine new assets. This attracts first-time miners who don’t have enough capital to buy expensive hardware. Block rewards are 10,000 DOGE serving to incentivize miners to secure the network.
Tracking Dogecoin on CoinStats
After mining Dogecoin and storing it in a cryptocurrency wallet, you can keep an eye on all your holdings from one platform. CoinStats is a crypto portfolio manager and DeFi wallet supporting a wide range of wallets and exchanges, allowing you to track the performance of Dogecoin and other assets easily.
Users can customize CoinStats to their preferences without worrying about security breaches because the portfolio manager uses the industry’s best practices and military-grade encryption to protect user data. With CoinStats, monitoring your assets across various platforms is now a straightforward process.
Also Check: How to Buy Dogecoin and How to Buy Dogecoin on Coinbase.
Conclusion
Dogecoin started as a joke but developed to become a leading blockchain in the cryptocurrency industry. In its wake, DOGE spawned a generation of meme coins and attracted big names like Elon Musk to the network.
The network became attractive to individuals interested in mining DOGE. Whatever your reasons for mining Dogecoin may be, you may choose between the methods described above.
You can decide to mine solo or join a pool to maximize your odds. For individuals who don’t want to splurge on mining machines, joining cloud mining pools is a viable option.
To securely store your coins acquired from Dogecoin mining, you must select a Dogecoin wallet. If you follow the mining process described above, you’ll have all the chances to become a successful Dogecoin miner.
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