Since its inception as a meme-based cryptocurrency, Dogecoin has made great strides. It started as a joke but soon grew in value and popularity. Today, it enjoys an enviable position among the top crypto assets.
With Dogecoin attracting high-profile investors like Tesla CEO Elon Musk, the coin’s supporters, popularly known as the Doge Army, are growing in numbers. If you want to join them, one way to do it is by mining.
How is Dogecoin mined?
Dogecoin mining is how you earn DOGE coins while helping the blockchain get new data blocks—which contain records of transactions—validated. When a block of data is verified, it is added to the decentralized Dogecoin network.
Dogecoin mining employs the Proof-of-Work (PoW) mechanism so that different computers/nodes (individual users or organizations) can compete to add new transactions to the blockchain.
Miners use powerful computers to compete. Their goal is to create fixed code known as a “hash.” Creating the hash is all about finding the next code in the chain, which often has an equal or lower value than that of the new block. It involves a lot of trial and error.
Miners who successfully create the code get the freshly minted Dogecoin as a reward. The crypto reward motivates miners to participate, making it one of the most popular ways of creating Dogecoin.
An analysis of Dogecoin mining reveals that it’s less competitive, less time-consuming, and burns only a tiny fraction of energy compared to Bitcoin mining.
Types of Dogecoin mining processes
Although Dogecoin mining is often viewed as more accessible and less strenuous than Bitcoin mining, it might not be for everyone. That’s why there is more than one way of mining Dogecoin. The three major types of Dogecoin mining are solo, pool, and cloud mining.
1. Dogecoin solo mining
Solo mining is when a single person confirms blocks of transactions individually. This type of mining requires substantial investments in computers and incurs huge electricity costs.
In theory, solo mining might be the most profitable way to mine Dogecoin since the individual gets to keep the full Dogecoin reward. But, to succeed in mining Dogecoin as an individual, you need high computing power and might even need to run multiple devices. Dogecoin mining is highly competitive, and as an individual miner, you’ll be up against large mining pools with extensive computing power.
2. Dogecoin pool mining
Dogecoin pool mining is an alternative to solo mining. It combines the efforts of multiple small-time miners. As the name suggests, miners pool together their resources to gain the advantage of enhanced computing power and share the energy demands of mining.
Mining pools are useful since they increase the chances of completing transactions and earning block rewards. Pools enjoy consistent returns primarily because they stand a better chance of winning rewards than solo miners. In cases of loss, mining pools also reduce the burden of failures by spreading it across the entire group.
Some of the popular Dogecoin mining pools are AntPool, Prohashing, ViaBTC, and Trustpool. In case you wish to join a mining pool, make sure you research it thoroughly to avoid falling for scams and losing your investments.
3. Dogecoin cloud mining
Another alternative to solo or pool mining is cloud mining. This type of Dogecoin mining is less tedious and more cost-effective since it doesn’t require miners to set up their own Dogecoin mining operations. To start Dogecoin mining through the cloud, the miner can rent out a mining rig as part of a cloud mining program.
Most cloud mining service providers charge monthly or annual fees for their services. The miner benefits from Dogecoin rewards mined as a member of the program.
Popular cloud mining platforms include Shamining, GMINERS, ECOS, Eobot, Nicehash, and Genesis Mining.
How to mine Dogecoin
Dogecoin mining is an attractive venture, but a prospective miner needs some basic things to succeed. The checklist below can help you mine Dogecoin efficiently.
Invest in hardware
To mine Dogecoin, you need three main types of hardware equipment that can make the process quicker and cost-effective. You can choose a Central Processing Unit (CPU), a Graphics Processing Unit (GPU), or an Application-Specific Integrated Circuit (ASIC). As the algorithm for Dogecoin gets more advanced, an ordinary CPU is not recommended since the computer might overheat.
Choose Dogecoin mining software
Once you’ve selected your hardware, identifying appropriate software is the next step. There are multiple software options in the market, and before choosing one, you should do enough research. If you’re using:
- A CPU, we recommend you choose CPU Miner
- A GPU, we suggest that you install Easy Miner, CudaMiner, or CGminer
- An ASIC, then it makes sense to go for MultiMiner.
Set up a Dogecoin wallet
To see where your earnings go, you need to set up a Dogecoin wallet. To choose a Dogecoin wallet, check out options in the marketplace or go for the options maintained by Dogecoin. Proceed to install the Dogecoin wallet on your handset or use the website platform. Once you open the wallet, you can verify your wallet address. After these steps, you’ll be set to mine Dogecoin.
How can I get Dogecoin otherwise? Buying and trading
Dogecoin mining is an attractive and viable path to making profits for many miners. But, before dedicating all your resources to Dogecoin mining, it’s vital to consider whether you can afford it. The power consumption, hash rates, and costs of Dogecoin are significant. If you decide to not go down the Dogecoin mining path, you could purchase it directly from crypto exchanges, peers, trade, or accept it as merchant payment.
Individuals can purchase Dogecoin from crypto exchanges like CoinSwitch in their preferred currency—from INR to USD. Peer-to-peer Dogecoin purchases eliminate intermediaries and make it easy to get coins at good prices.
Trading is another viable way to earn Dogecoin if you understand market dynamics. Buying low and selling high can give you profits, which help you grow your holdings.
If you are a merchant, you could also earn crypto by setting it up as your preferred mode of payment.