The crypto that started as a joke is no longer simply a laughing matter. A globally engaged user base has propelled the viral Shiba Inu “doge” meme coin sensation with a healthy dose of Elon Musk influence to heights the founders never imagined.
Dogecoin’s price has boomed in 2021, establishing it as one of the top 10 cryptocurrencies with currently over a 30 billion USD market cap. Mining previously was substantially easier with fewer miners attracted to mine a joke coin that held very little value. With spiked interest and value, of course, comes the competition. The Australian gold rush happened back in 1851, but companies today are still digging. So let’s not say that you can’t mine now and profit and instead dive in.
Dogecoin mining; how does it work?
Dogecoin operates on a blockchain network, where new blocks are added to a decentralized ledger. Miners are participants in the network who compete to validate the block and its transactions using computing power. It boils down to which participant’s computational mining rig completes the block’s hash algorithm with the winning code. This process is known as Proof-of-Work. For participating in the validation process, miners can earn 10,000 Doge that is up for grabs every minute a block is freshly minted.
So how do you mine Dogecoin?
There are three main ways to mine Dogecoin.
1) Cloud mining, the easiest of routes to take.
You purchase computing power from an already operating network and, in turn, receive a portion of the clouds profits sent directly to you. Beware, however, that some cloud companies have turned out to be scams, so due diligence is necessary when choosing which one to join.
2) Mining Pools
Mining pools are good beginner options as you are adding your computing power to a more extensive network that grants a higher chance of securing the winning block and earning profits. Mining pools have minimal fees to participate and different payout structures but are a secure and beneficial method of collective mining.
3) Individual mining
Individual mining can be more difficult. To have a more significant chance of winning the blocks rewards and running profitable, you must have sufficient computing power. A more considerable initial investment—not recommended for a first-timer just trying to dip his toes in the mining world. But for fun and to better understand the mining process, it is capable even from your computer.
If you’ve decided to go ahead with mining, you will need a few things:
Firstly, a Dogecoin wallet to store your earnings. There are three types of wallets: Online, Software and Hardware wallets. Each one with increasing security in that order. You will need only a wallet if you decide to cloud mine.
Secondly, you will need hardware equipment to run the computational aspect. Again three types are each more potent in this order: computer processing units [CPU], graphics processing units GPU and ASIC which are purpose-built for mining. In all computers, there is a CPU, but these can overheat, another risk to individual miners. So it is recommended to have either a decent GPU that you can also find in most advanced computers or to purchase an ASIC if you are looking to take mining seriously.
Is it still worth it to mine Dogecoin?
While Bitcoin has a fixed supply of 21 million coins, which will leave miners with only transaction fees once thoroughly mined. Dogecoin has unlimited coins, and mining will continue to operate in the future.
Power supply is the main issue of any mining operation cost. The better a mining rig you own, the more power it will use. Miners must run a thorough cost-benefit of the potential profits versus operational costs.
With the prospect of the Dogecoin network still growing in value in the future, it won’t hurt to try your hand at mining. It may not make you massively rich, but prospecting was always a little bit of an adventure.
