An Introductory Guide to Mining Dogecoin
Mining Dogecoin can seem intimidating at first but it works the same way as mining other cryptocurrencies. This article covers everything you need to know to get started while informing you on other important things that you need to know about.
A Brief Overview About Dogecoin
You can invest in and spend dogecoin the same way you would with any other digital currency.
Even though each cryptographic currency is unique, it shares some characteristics with its more well-known peers — for example, its coding is inspired by Litecoin. However, there are a few notable variances.
The total number of dogecoins currently in circulation is 129 billion, whereas the total number of bitcoins is 21 million, and new blocks of dogecoins are made available for mining every year. Dogecoin is currently valued at three dimes, while bitcoin is currently valued at $62,000.
Dogecoin, despite its increasing popularity as a medium of exchange for the purchase of commodities, is still a niche currency in the real world. Dogecoin has a few niche niches, such as tipping online artists with cryptocurrency.
The currency’s biggest selling point is its vibrant online community, which adds to its allure. The Reddit-based collective has generated funds for charity causes using dogecoin, and it was able to crowdfund a sponsorship of Nascar driver Josh Wise in 2014 to promote dogecoin on his car.
This is not a deflationary numismatic tool but rather an inflationary leisured investigation of community-building around a crypto asset,” Usman Chohan, an economist at the University of New South Wales Business School, wrote in a February paper on digital money.
What sparked it?
As a prank, a pair of software engineers invented Dogecoin on December 6, 2013.
At the time Billy Markus began working on a cryptocurrency, bitcoin had an anonymous founder and attracted only a tiny, specialized group of miners. Markus wanted to make his crypto different. According to Chohan, Markus wished for his coin to be accessible to the general public.
Markus sought out Jackson Palmer, a former Adobe employee, for aid in making his bizarre fantasy a reality (ADBE). Purchasing dogecoin.com was a tribute to the “doge” meme that was popular at the time, which Palmer had seen all over the internet.
At the very top, the website makes a jokey homage to its satirical origins: You can see it right away since its mascot is depicted as a Shiba Inu dog surrounded by Comic Sans writing in bad English, just like the meme that inspired it.
Dogecoin’s mascot is described as follows on its website: “Dogecoin is an open-source peer-to-peer digital currency, preferred by Shiba Inus around the world.”
Why has it suddenly become so popular?
In the past, Dogecoin was only a prank. Since the general adoption of bitcoin and other cryptocurrencies, its popularity has skyrocketed.
Elon Musk, on the other hand, is the most outspoken proponent of dogecoin. Cryptocurrency prices can soar with just one of his strange tweets to his massive following of 50 million people. In April, Musk tweeted “Doge Barking at the moon” and posted a photo of Joan Miró’s painting “Dog Barking at the Moon,” which he captioned with the phrase.
Mining Dogecoin: Things To Know Before You Start
Even though Dogecoin is a fork of Bitcoin that has several fundamental variations in its source code, mining Dogecoin is similar to mining Bitcoin. Rather than relying on a single party to maintain its digital ledger, a distributed network of nodes manages Dogecoin as well.
Since there is no single entity in charge of dispersing cryptocurrency, the entire planet is affected. Because of this, the distribution of currency is decentralized.
With no pre-mine, Dogecoin is produced and delivered in a pre-programmed manner, rather than being created in a single transaction before a network’s inception. The so-called miners are the ones who receive the newly issued Dogecoins.
As a result of their efforts, these cryptocurrency miners are paid with digital currency. Miners use the word “mining” to describe the labor- and energy-intensive process of mining precious metals like gold and silver.
Dogecoin miners also suffer costs and energy, although these are not the costs and energy incurred while searching for precious metals. Dogecoin mining uses a lot of electricity, which is then used to run dedicated computers in a global competition to solve cryptographic challenges.
Dogecoin is given to the miner who solves this challenge first and gets to add a new block to the blockchain in what is termed a block reward. Using this technique, Dogecoin miners are rewarded handsomely for their contributions to network security and decentralized peer-to-peer transactions.
Dogecoin does not have a fixed upper coin cap, making it an inflationary currency like Bitcoin and Litecoin. To be sure, it wasn’t always like this. At the time of its conception, Dogecoin’s coin cap was established at 100 billion coins, and the block reward was halved every 100,000 blocks until block 600,000 had been mined.
After then, until the 100 billion coin ceiling is achieved, the block reward will be locked at 10,000 coins. This would have happened about a year and a half after launch, based on the mining timeline.
As a result of this, Dogecoin’s developers agreed to keep its block reward at 10,000 coins per block for the first three months of 2014, three months before the last reward would be handed out. It was thus established as a currency with a steadily decreasing inflation rate (4% in 2022, 3% in 2030, 1.5% in 2065, etc.).
Dogecoin’s price began to fall and the network’s hash rate decreased considerably when the hard cap supply was removed in 2014. To prevent a 51 percent attack on the network, Dogecoin’s developers opted to enable “merge mining,” which allowed the Dogecoin network to receive hash rates from other proof-of-work blockchains running on the same Scrypt-algorithm.
To compete for both payouts, merge mining allows miners to contribute their computing power to two chains simultaneously, without having to split their hash rate between the two networks. Miners may now easily and profitably mine both Dogecoin and Litecoin at the same time.
How to Mine Dogecoin
Providing computing power, more commonly referred to as hash power, to the Dogecoin network is a necessary part of participating in the cryptocurrency’s mining process. Unlike Bitcoin, Dogecoin is an open-source system that allows anyone with the ability to mine to do so.
To mine Dogecoin back in the day, all you needed was a home computer with a CPU and a GPU. Due to the recent spike in popularity of Dogecoin, the network is receiving more and more hash power, making mining more challenging.
Computer processing units (CPUs) are no longer capable of efficiently mining Dogecoin. It is important to have at least a powerful graphics card unit (GPU), or better a mining machine known as an application-specific integrated (ASIC).
Dogecoin mining is now dominated by mining pools in the same way that Bitcoin mining is. It is recommended to connect this mining equipment to so-called mining pools if someone has limited computer capacity. As a result, a smaller miner can team up with a lot of hash power, making it more likely that his mining rigs can produce a consistent stream of block rewards.
For each new block discovered by the mining pool, the smaller miner receives the fraction of the reward that he has contributed. The majority of these mining pools also support merged mining, allowing users to simultaneously mine multiple scrypt-based currencies with no loss in hash rate efficiency.
To summarize you can mine Dogecoin by yourself using powerful hardware or you can join a Dogecoin mining pool.
Which one is Better? Mining Pool or Going Solo?
Join a Dogecoin Mining Pool
Using a Dogecoin pool means paying fees. Also, when the pool mines a block, you’ll only get a little percentage of the whole payout. Pools, on the other hand, mine blocks at a considerably higher rate than do lone miners. As a result (even if it is split), your chances of getting a reward are improved. As a result, you’ll have a regular stream of Dogecoin to spend.
As a newbie, I recommend joining a Dogecoin pool to get started with cryptocurrency. As a result, the time it takes to mine your first block of new cash will be shortened. You’ll also be a part of the Dogecoin community, and that’s what the currency is all about!
Mine Dogecoin Yourself
If you decide to mine on your own, you may have to wait a long period for a transaction to be confirmed because of the high volume of activity. Mine your first block could take weeks or possibly months! However, if you win, you’ll take home the entire prize money. In other words, there are no obligations on your part.
What many fail to notice is that there is a third option which is cloud mining and it may not yield a lot of income compared to the previous two but you don’t need a lot of investment here either. Cloud mining is an easier way to mine Dogecoin than using your hardware. \This hands-off strategy allows you to buy into a mining business without any involvement from you.
To get around the problem of owning your computer and paying for it, you lease the hardware from an established data center. They do the mining for you and charge you for the electricity they use, as well as a percentage of the profits they make.
For those who don’t want to invest in their mining hardware or have the time or inclination to manage it, cloud mining is a viable option. However, because most contracts are time-locked, cloud mining might be dangerous.
In other words, if you sign a one-year contract with a cloud miner to mine Dogecoins and the price of Doge falls below the cost of mining and electricity, your return on investment (ROI) may suffer.
Scrypt cloud mining does have some setbacks. No contracts for Scrypt mining can be found on the most popular cloud mining platforms like Genesis Mining and Eobot.
However, scrypt mining contracts can still be purchased on hashing power marketplaces like Nicehash. NiceHash differs from the other cloud mining pools in that it matches buyers with hashing power. There isn’t a single mining corporation offering hashing power for sale, but rather a slew of individuals. It’s an interesting approach, but the bidding and pricing can be more difficult to manage.
Getting Started With Mining
Get The Right Hardware and Software
Invest in mining hardware or determine if your CPU/GPU is up to the task before making a significant investment. Because Dogecoin is a scrypt-based coin, you need to use ASIC computers that are specifically intended for this purpose.
These can be obtained directly from the manufacturer or a third-party vendor. Make sure you have all of the essential software (for CPU/GPU or ASIC miners) downloaded and installed, and make sure your GPU driver is up to date if it isn’t already. Supply shortages are not uncommon so keep thin in mind when deciding to mine Dogecoin.
Here is some software we recommend:
Make Sure You Have a Wallet
Your pool account must have your payout address registered before you can get paid from the block prizes. If you don’t already have a Dogecoin wallet, now is the moment to download and set up your own. In addition to the official Dogecoin wallets, third-party wallets that support Dogecoin storage can also be used.
Make Sure Your Internet and Power Source is Stable
To begin, you’ll need a fast internet connection if you plan to mine Dogecoin on a laptop or with graphics cards. When mining, a user needs a constant, fast, and uninterruptible internet connection. Your chances of receiving block rewards will be reduced if your internet connection goes down while you are mining, as another miner with a quicker internet connection may deliver the results at the same time as you.
Mining requires a lot of energy. Dogecoin mining requires an electrical system that can manage the cooling and mining equipment you’ll need. Even once the mining is done, you don’t want your electric bill to skyrocket because of it. As a result, lowering the per-unit cost will help you save money on your electricity bill.
To conclude there are different ways to mine Dogecoin, all of them have their fair share of advantages and setbacks, and it’s up to you to decide which one works for you best. Hopefully, this article answered all of your questions when it comes to mining Dogecoin.
* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.