DogeCoin mining is becoming more popular day after day, especially as the price of DogeCoin has reached some exciting new levels. Before we get into the details on how to ‘mine’ DogeCoin, I will first explore the history of Doge, Crypto, and mining in general. If you prefer to skip that and get straight into the DogeCoin mining runthrough, use this link here.
What is DogeCoin?
In the ever changing world of cryptocurrencies, it can be hard to keep up with all the new types and distinguish which currencies are worth your time. One of the latest cryptocurrencies is Dogecoin. Dogecoin is one of those to have cropped up on our radar and it may be worth exploring, given it has the 7th largest market cap of all cryptocurrencies.
Dogecoin was created in 2013 by two friends, Jackson Palmer and Billy Marcus. They decided to create their own cryptocurrency, and put their own spin on the overly serious cryptocurrency market, then came the birth of Dogecoin. Dogecoin was a way of creating a more fun and inviting altcoin, to possibly entice and encourage people that would not normally involve themselves in cryptocurrencies.
Their fun antics included naming and using a popular internet meme as their mascot. The Doge, a Shiba Inu dog with a cute but dopey look about him. With this in mind, Dogecoin is not your regular altcoin, and they pride themselves on their charitable acts and donations. Dogecoin have donated to good causes such as building wells in Kenya, and also donating to fun and out there causes such as to the Jamaican Bobsled team allowing them to participate in the 2014 Winter Olympics.
What is a cryptocurrency?
The original cryptocurrency, Bitcoin was first launched in 2009 and is often referred to as the ‘digital gold’. It is the most successful one of the lot, and also the most widely accepted. Whenever someone mentions cryptocurrency, your mind will automatically guide you towards Bitcoin. There are now many other ‘coins’ that have strong followings, but Bitcoin undoubtedly paved the way.
The new collective name for these smaller cap coins is altcoins, or alternative coins. All these altcoins work in the same way as Bitcoin and can be traded, bought and sold. They can operate on different infrastructure or frameworks such as Ethereum.
All coins can also be mined, a means of supplying networks with the ‘nodes’ needed to function efficiently. Mining for cryptocurrency is an alternative way of getting your hands on cryptocurrency without actually buying it yourself. (You will see more on mining below.)
Cryptocurrencies allow the transfer of money between individuals without the need of a bank. They are also known as peer-to-peer digital currencies. These transactions are recorded digitally and stored in a blockchain.
A blockchain is a gigantic digital database, which records every single cryptocurrency transaction. Each time a transaction is made, it is uploaded to the blockchain. It is a secure decentralised network made up of various different computers in multiple different locations.
Crypto mining and DogeCoin mining actually supports the network efficiency
These computers are referred to as nodes. The job of the nodes is to check and agree on each transaction, called a consensus. The more nodes a blockchain has, the more secure it is from hackers. The nodes work together to check each individual transaction, and they come to a consensus, and this occurs during the mining process. The nodes checking process is vitally important to the way cryptocurrencies work, and without them people could inflate their wealth, and the currency would be worthless.
Confirming and reaching a consensus through mining requires a large amount of electricity, computer power and sometimes high powered hardware. All these efforts can be time consuming and costly. Blockchains, unlike banks, do not have paid employees to run the show checking transactions etc etc, consequently, they rely on the nodes (they could be regular people like us) to help confirm transactions. The people/nodes are then rewarded with the cryptocurrency, which is called mining.
To summarise, cryptocurrencies are stored on a large database, known as a blockchain. A blockchain is then made up of different computers which are called nodes. Cryptocurrencies can only function if the transactions are cross checked and agreed by all the nodes, otherwise it would be impossible to keep an accurate ledger of all transactions.
What is Crypto Mining and how do you mine DogeCoin?
Cryptocurrency mining, with it’s apt name is likened to digging and mining for actual gold and precious jewels, but instead of the literal act of digging and panning, you are using your computer (as a node) to uncover crypto coins. Each cryptocurrency, and there are several these days, have their own blockchain, and their own way of checking and confirming transactions. The same block of transactions are being looked at and confirmed (using complex mathematical equations) by many computers all at once, but only 1 can earn the coin, and the winner will receive the prize of a coin at the end of the process.
Crypto mining has different difficulty and reward levels, each crypto currency uses a slightly different method to mine. You can check and compare to see which ones may be the most suited to you, keeping in mind that the altcoins that are easier to mine, may not bring the biggest rewards.
Mining may not always yield results. Some say that mining is similar to playing the lottery since several nodes at a time come together to solve the same block of transactions, and whoever manages to solve it first is rewarded with the coin at the end. There are ways to join together with other miners, in a mining ‘pool’.
How to distinguish between cryptocurrency mining methods
Block Time: Block time is how long it takes the for a group of nodes to come to a consensus and agree and checked through a block of transactions. Different cryptocoins are mined at different rates, some are more complicated to check and require extra time.
Difficulty: As mentioned above, different coins have various levels of perceived difficulties. Often, the easier it is to mine a crypto coin, the easier it will be to receive the crypto coin at the end of the mining process.
The difficulty is measured numerically, the higher the number, the more difficult it is to mine. For example mining Bitcoin is much higher than mining Dogecoin. You should see some correlation between the value of a cryptocurrency, and it’s mining difficulty. The more nodes, miners that are actively mining for a certain cryptocoin will raise the difficulty levels, as there are more players in the game making the probability of completing the checking of the transactions sooner than other miners.
Reward: The reward is how much of the cryptocurrency is given to the miner after completing a block of transactions. Rewards vary from currency to currency, for example, the reward for completing one transaction block for Bitcoin is 12.5 coins, and for Dogecoin is 10,000.
Algorithm: Cryptocurrencies use complicated algorithms for mining, different algorithms are used for different cryptocoins. Some are easier to use then others, making mining easier and more accessible to the masses. The easier algorithms require less processing power to cross check transactions and come to a consensus. Computers that aren’t as powerful are able to participate in mining.
How to Mine DogeCoin? Is a Mining Pool Preferable?
Mining DogeCoin is simpler than mining Bitcoin or Litecoin. Litecoin and Dogecoin run on the same algorithm, and they have recently merged mining which allows both currencies to be mined concurrently. Bitcoin is worth a lot more than Litecoin and Dogecoin at this time. Dogecoin is still the cheapest of the 3, but the ease of mining Dogecoin makes it easier to harvest a lot more coins of the Shiba Inu themed currency.
Dogecoin can be mined in two different ways, either on your own or in a group, or what is known as a ‘mining pool’.
A mining pool is a group of people who pool together their computer processing power to raise the chances of being the first to complete the checking of a block of transactions and get the ultimate reward of some coins. Mining as part of a pool can have its advantages and disadvantages.
With the added processing power of several computers this could help speed up the mining and getting to the reward quicker. Sharing the workload also means sharing the prize, meaning a smaller portion of the coins earned. Mining solo on the other hand can make sure the end prize is all yours.
Dogecoin miners that are just starting out may find it easier to join a mining pool rather than going it solo. After gathering up valuable mining experience you can consider mining solo.
Mining your first DogeCoin
To start mining DogeCoin, you will need a few things, probably things you already have like a computer with a good operating system, good hardware, and a solid internet connection.
Although technically, you can mine dogecoin using any computer, you are advised to make sure that your hardware can withstand the heavy duty usage often incurred with mining. Overheating is a common problem related to underpowered computers.
A graphics card (GPU) can be used to enhance your computer’s graphics, but can also be used to help increase your computer’s performance so you can mine dogecoin without the worry of overworking your hardware. Popular cards, SAPPHIRE Pulse Radeon RX580, ASUS RX Vega 64 and the Nvidia GeForce GTX can be used for this very purpose.
Another important item for your inventory is a wallet to keep your hard earned coins in.
There are different types of wallets you can keep your DogeCoin in, an online wallet, a software wallet, or a hardware wallet. Wallets enable you to keep all your cryptocurrency safe and also allows you to send and receive the coins securely.
Hardware wallets include, Trezor Model T and Ledger Nano S. Coinbase is an example of a well established software wallet.
Mining DogeCoin without equipment?
Cloud mining is an alternative way to mine DogeCoin.
Cloud mining differs from physical mining as you are able to rent a computer to do your mining rather than using your own hardware. Mining can work your computer quite hard and sometimes cause overheating and damage to your software. Via cloud mining, this gives you an alternative option to join in with cryptocurrency mining without using your own set up.
This option can be helpful for beginners and for people that do not have an adequate set up for mining. Cloud mining can be risky as you are often tied into a contract, and you may be stuck paying rent for something that may not give you the best return.
Mining Dogecoin may not be as profitable as mining bitcoin in pure Coin value terms but you should be able to gather more coins in your wallet than BTC. You may spend more money on upgrading your PC, paying for electricity, or rent for a cloud mine than the rewards you gain but there are many professional cryptocurrency miners that turn this activity into a fully fledged business.
DogeCoin mining may not bring the instant profit and successes like those you may associate with Bitcoin, but there is another way to make money from Dogecoin. The most common way still to speculate on DogeCoin is buy buying and trading cryptocurrency either via CFD trading or Spot. If this is something that you are interested to know more about, see our related article here Cryptocurrency CFD – the pros/cons of CFD vs Spot