How to Mine Dogecoin

But what does it take to mine Dogecoin? 

Let’s delve into that in this overview to find out.

Mining

For those of you who are new to the game, the word mining doesn’t mean much. So, here is what it is all about in a nutshell. 

In the crypto-verse, mining refers to the process of verifying new transactions to the digital currency system by involving third parties known as miners who solve intricate complex computational math problems.

Those performing them for the network to function properly and receive the newly minted crypto are miners. These people are critical to the system as without them the whole decentralized system would be unable to function.

Miners tend to compete with each other by solving complex puzzles. Whoever does it first, gets to add a new block to the blockchain and as well as receive coins. 

Dogecoin mining

A distant Bitcoin fork, Dogecoin’s mining process is similar to that of BTC.

Dogecoin’s advantage, however, is that the difficulty score, the standard measure used to estimate the computational requirements for mining a coin, is among the lowest. 

Also, it is often the case that Dogecoin pools offer mining coupled with Litecoin. 

Before you start

Mining is most certainly an attractive way of making a profit. However, there are several things to bear in mind that you need to be aware of before seizing on the opportunity. 

• Potentially higher electricity bills

Depending on which mining method you opt for, your electricity bills may significantly go up as the process is energy intensive. Make sure to run your numbers to understand whether it is worth doing it in your case.

• Need for equipment

If you decide to commit to the opportunity, ensure that you know which equipment you need and whether you’re ready to spend money on it as using your computer’s processor, which we discuss below, is not the optimal way of making money.

• Fluctuating profits

Regardless of which mining method you use, your profits are unlikely to be stable. You need to be ready for that and understand that you’re entering a space of high uncertainty. 

• Environmental concerns

Mining isn’t exactly a very environmentally friendly endeavor, so if you think green, then you might want to refrain from it. 

• High competition

In mining, competition is high and has likewise been growing over the years. So, don’t expect to enter the domain and start making thousands in the blink of an eye. 

Creating a Dogecoin wallet

If you want to mine, it is essential that you create a Dogecoin wallet, which will enable you to get Dogecoin rewards from mining. 

You can create one on a crypto exchange of your choice, for example, WhiteBit that has rigid security checks. 

If you prefer to do it offline, then download the original Dogecoin wallet. Alternatively, use third-party software wallets or hardware wallets that are physical devices similar to a USB stick that store crypto offline such as Ledger Nano S.

How to mine Dogecoin

There are three main ways to do so: solo mining, joining a mining pool, or using a cloud mining provider. 

Solo mining

To mine solo, you need to join the Dogecoin network (go to their official site to find out more) as an individual node and use your mining rig to solve transaction blocks. If successful in adding a new block to the chain, you’ll receive a reward all to yourself. 

Yet before you get all excited, keep in mind that this method of mining might become too challenging because of the infrequency and inconsistency of rewards as you compete with large mining pools who by default have an upper hand. So, you really need to make sure that the electricity bills will not exceed your budget.

Besides, if you want to mine this way, then you’ll need certain equipment: central processing unit (CPU), graphical processing unit (GPU), or an application-specific integrated circuit (ASIC) machine.

The first option, due to high competition, has effectively a very little chance of success since you won’t be able to make much money that way. 

The second option is more realistic profitability-wise, even though the intense competition among miners has already made profitable GPU mining quite difficult as well. For example, one of the most powerful mining GPUs on the market, the AMD Radeon VII, will only allow you to break even.

ASIC is the optimal choice, which has been popular in Bitcoin mining for many years. However, keep in mind that you won’t be able to use the Bitcoin ASIC for that. It is also an expensive one.  

Dogecoin mining pools

Dogecoin mining pools are a solid alternative to solo mining as they represent a joint effort of several miners, which increases the chance of solving a block of transactions. The reward directly depends on how much hash power each miner contributed. 

Even though you won’t earn a lot by joining one, you’ll at least have some funds as without a high-end rig your solo endeavors will likely be rendered futile. You will also be required to pay the pool for its services (between 0.5% and 4%).

While there are dozens of large or medium-sized pools mining Dogecoin, just a few large pools solve the majority of the blocks on the network, such as ViaBTC and LitecoinPool.org.

Also, keep in mind that you will need equipment for this type of mining described above. 

Dogecoin cloud mining

Dogecoin cloud mining is another way of mining the meme coin that requires you to pay a monthly or yearly fee to a service provider that “leases” you computing hash power and gives you a share of the mining profit corresponding to your hash power.

This approach means that you don’t need to own any mining equipment, however, keep in mind that Dogecoin cloud mining offers fluctuating returns and there are not too many reliable services to choose from as Dogecoin remains to be a less enticing option than Bitcoin or Ethereum. Among the more well-known companies that offer Dogecoin, cloud mining are NiceHash and Genesis Mining. 

Final remarks

Dogecoin remains to be a popular coin that has a solid future, according to many crypto big shots like Ethereum’s co-founder Vitalik Buterin and investor Mark Cuban. 

It also has a robust community, which is important as you can always get advice and learn some insights from others.

Do your research carefully and happy mining!