Dogecoin price increased dramatically in 2021 with explosive growth and became one of the best digital currencies in terms of turnover. But how to start Dogecoin mining?
Dogecoin has come a long way since 2013. Developed initially as a joke, the digital currency is now among the top 10 currencies globally in terms of trading volume, with more than $ 32 billion in market volume.
The popularity of this digital currency has increased dramatically due to the widespread advertising on social networks by influencers and celebrities. At the beginning of 2021, it faced a growth of 8000%!
However, currently, the competition for dogecoin mining is much less than for bitcoin. Block discovery in this digital currency is faster, and the reward is 10,000 dogecoin, while the bitcoin reward for each block is 6.25.
Dogecoin mining method
How the dogecoin blockchain works is done precisely by adding new blocks on the nodes and registering transactions on each block, and the procedure for working with bitcoin is the same.
The verification mechanism of its algorithms works with Proof-of-Work, so you can get dogecoin rewards through mining. In this case, the competition of users to discover a new block and address the transactions and place them in each block will increase, and powerful hardware to extract this digital currency will come to the fore.
More precisely, each dogecoin miner must generate a hash code string and compare it to the block hash code string. If the string code is the same, then the block is detected. The power of miner devices is also determined by the amount of hash code generated per second. For example, a device can generate ten triggers per second and compare them to a hash block.
Each hash requires powerful computing hardware because mathematical operations generate it.
The image below shows the mining specifications of dogecoin, bitcoin, and litecoin digital currencies.
As a rule, blockchains that work with the Proof-of-Work algorithm have a certain amount of coins that when these coins are completed, other mining operations will stop. This is exactly like when the earth’s gold reserves run out.
Unlike other major digital currencies in the world, Dogecoin does not have a mining ceiling. The number of coins in circulation is constantly increasing, and new coins enter circulation by mining
One block is discovered on the dogecoin network every minute. Of course, this is the rate for Bitcoin to find blocks every 10 minutes.
Of course, although there are similar algorithms for extracting Dogecoin and bitcoin, the method of working in Dogecoin is slightly different.
Bitcoin is the world’s first and oldest digital currency using the SHA-256 hash algorithm. In this method, the hash length is always the same, so the algorithm is less complex.
Dogecoin and Litecoin work differently and use the Scrypt algorithm, which is less complex than the SHA-256. This algorithm speeds up the process of generating and discovering blocks in Dogecoin, as well as optimizing its energy consumption.
The Scrypt algorithm also allows both dogecoin and litecoin cryptocurrencies to be extracted simultaneously without straining the miner. Dogecoin has the same procedure as litecoin because its codes are based on lucky coin, a sub-token of litecoin.
How to mine Dogecoin?
At the beginning of the dogecoin offering, the mining process was much more straightforward. Each person could personally extract this digital currency and receive a reward. However, as the competition for Dogecoin increased, the difficulty of mining also increased. So now you have to join the mining pools to extract it.
Mining pools are places where people provide their resources and hardware so that a cryptocurrency can be mined collectively, and the profits from the mining bonus can be shared among these people.
There are three general ways to extract Dogecoin.
- Individual mining/solo mining
- Mining pools
- Cloud mining
Can joining a mining pool be helpful?
If you want to do dogecoin mining simply for testing purposes, you can do so with a GPU and connection to software like EasyMiner. The more power your GPU has, the more Dogecoin you can extract.
Of course, even with powerful graphics cards, extracting Dogecoin in person is complex and comes at a high cost to you.
Instead of personal mining, you can join Mining Pools and earn a higher percentage of rewards in exchange for your resources. In each mining pool, between 1 and 3% of the total bonus receive as the cost of the pool.
The best Dogecoin mining pools are listed below:
- Multipool
- Prohashing
- AikaPool
- Cloud Mining
You can also extract Dogecoin through cloud mining. This way, you can rent a powerful computer from a virtual server and use it every month to extract Dogecoin. Maintenance costs for this type of service are also calculated on a monthly and annual basis. The more you spend on renting a computer, the more profit you make.
One of the major problems with cloud mining is that most contracts have a time limit, which means that if the price of Dogecoin goes down in the indefinite future, you will lose a lot in this system.
Of course, its advantages include the lack of need to set up a miner and the lack of consideration for the environment and conditions to meet the requirements for setting up a dogecoin miner. The following are two commonly used cloud mining systems:
- Genesis Mining
- Nicehash
Dogecoin mining prerequisites
To be able to dogecoin mining, you need a series of requirements. The following are the most important things before you start:
Hardware
There are three types of hardware combinations to be able to dogecoin mining:
- Suppose you have a potent processor and can use liquid cooling systems and other professional systems to keep the temperature at a certain level. In that case, you can easily mine Dogecoin with it.
- Powerful GPUs are also essential to start dogecoin mining.
- ASIC Miner devices based on Scrypt algorithms can easily do DOGE mining for you. But there are problems behind these devices, including high prices and high maintenance costs.
Software
Once you have selected your leading hardware for DOGE mining, it is time to install mining software on your system and perform the operation.
- If you want to mine with CPU, you can choose the CPU miner application.
- If you want to mine with a GPU, it is best to use the EasyMiner application. Of course, the CudaMiner app is also compatible with Nvidia graphics cards, and CGminer is a smooth and straightforward application for mining with any graphics card.
- If you have purchased an ASIC Miner device with the ability to extract through the Scrypt algorithm, you can do so using the MultiMiner application.
Digital wallet
After choosing dogecoin hardware and software, you must also use a digital wallet to store the digital currency you extract. Digital wallets include public and private keys and can be sent or received Dogecoin. But what are the best wallets for storing DOGE digital currency?
- Online software digital wallets are one of the fastest options for storing digital currencies like DOGE. For example, Coinomi, Coinbase, or Binance wallets are offered, which are both highly secure and easy to set up, which has led many to use many of these digital wallets.
- Digital wallet software applications are also prevalent and have a lot of security. You can download the original dogecoin wallet or choose one of the wallet apps.
- The safest and best way to store digital currencies, including Dogecoin, is to use hardware wallets compatible with most minor applications. You can connect this hardware to your laptop or computer with a USB connection and use it. The best hardware wallet options are Ledger Nano S or Ledger nano X, or you can buy Trezor T.
All three hardware, software, and wallet mining items are among the main requirements for dogecoin mining. So do not forget that you can start the operation by preparing all three items and joining a mining pool.
Conclusion
Dogecoin mining can still be very profitable. At the moment, the prices are very high, and you can start mining by providing the necessary tools and making the possible profit this way. Of course, keep in mind that your device should be the lowest cost in energy consumption and the most profitable in terms of hash rate generation.