The cryptocurrency trends for 2021 have been interesting. Coins such as Dogecoin have become very popular among investors for reasons such as a sudden spike in the value of Dogecoin. It is no longer regarded only for its meme-based popularity. Now, many people are interested in buying and holding Dogecoin. This means more work for miners who need to meet demands.
The significant increase in the value of Dogecoin has led to higher demand. This is good news for the Dogecoin community, which has been supporting the cryptocurrency for so long. If you are interested in mining Dogecoin, this is the best time to get started. This post covers all you need to know about mining Dogecoin.
Mining Dogecoin is essential to its survival in the crypto market. There is room for everyone to start mining Dogecoin, so no worries about competition because the network allows the creation of over 5 billion Dogecoins every year. Also, you can earn an income as a Dogecoin miner.
Mining Dogecoin is an excellent strategy for everyone who wants to gather some of the coins to hold and sell when the price appreciates. You do not need many resources to start mining Dogecoin, unlike others such as BTC or ETH. However, you should note that Dogecoin mining is not as lucrative as mining BTC.
Dogecoin – The History
Dogecoin concept started as an unserious idea formed by Billy Markus and Jackson Palmer. They must have been astonished by the acceptance of their joke, which has grown into a cryptocurrency with a market cap reaching billions of dollars. Dogecoin was formed in 2013. Since that time, the Dogecoin community has grown steadily into what it is today.
The founders copied the BTC code format to create Dogecoin. That is why Dogecoin and BTC have similar Blockchain networks, and miners use the cryptography platform to develop blocks and confirm transactions on the network. The difference between Dogecoin and BTC is the use of Scrypt for its algorithm. The BTC uses the SHA 256 for its hash rate algorithm.
Dogecoin value has appreciated significantly over the years because the coin has become a favorite chosen by many people for transactional payments and purchases online.
Benefits of mining Dogecoin
Miners have been talking about the benefits of mining Dogecoin. These comments can be seen on popular blogs and online forums about cryptocurrencies. They are enjoying the engagement as miners. One significant benefit is the opportunity to earn more Dogecoin for your work, as mentioned earlier. It is possible to mine other coins and earn Dogecoin as your payment, which means more rewards. Also, as a Dogecoin miner, you can prospect without a limit every day because there is an estimated cap of 14 million Dogecoins created daily. The annual limit for mining Dogecoin has significantly lowered the risks of inflation.
Also, you can keep a large percentage of your earnings as a Dogecoin miner because the mining setup is affordable.
It should be noted that Dogecoin cannot be mined directly since this option was removed to protect the Dogecoin community. Now, miners rely on rewards in Dogecoin for their work mining other coins such as BTC and ETH.
To explain this concept further, you can mine other coins that are compatible with the Scrypt algorithm to earn Dogecoin as your reward. Dogecoin is a fork for Litecoin, which makes it compatible with the auxiliary Proof of Work mining method.
For new readers interested in mining cryptocurrency, it is all about creating new coins, just like the process of minting money. Dogecoin mining is done by performing computing tasks to resolve cryptographic problems using the computing power
Your responsibility as a Dogecoin miner is to resolve cryptographic tasks presented as blocks. The transactions initiated by users are compiled in these blocks, which are presented to you as cryptographic tasks. You use computing power to perform tasks and validate transactions to keep the process moving. Miners are constantly looking out for blocks to work on because they only get paid after successfully validating transactions on the Blockchain.
While you do not need to have as much computing power to mine Dogecoin, compared to other coins in the market, you can have an advantage by using more computing power. This means, if you can generate more computing power for mining Dogecoin, please do so by all means. Computing power determines your hash rate, which in turn determines how many blocks you can handle daily. A higher computing power gives you leverage over other miners because you resolve blocks and validate transactions faster to earn more coins as your payment.
Mining options for Dogecoin
You have two options to choose from to mine Dogecoin. They are the solo mining and pool mining option. Miners leverage these options to validate transactions and get their payment without consuming much computing power.
if you choose to use this method to mine Dogecoin, you will be working independently. This means you provide all the computing equipment, which can be quite expensive. But you keep all the payments received from your mining activities.
In the pool mining system, you join a community of miners who share computing power and earn rewards for mining together. Pool mining is recommended for new miners, and it allows more people to participate in mining Dogecoin. You can also start your mining experience with significant earnings because you are working with experienced miners who complete blocks faster and earn more.
Requirements for mining Dogecoin
There are particular requirements you will need to start mining Dogecoin, regardless of the mining method you choose. Please continue reading to know these requirements.
First, you must have a Dogecoin wallet before you start mining. The wallet is your virtual purse, where you store coins paid to you for mining Dogecoin.
There are different types of wallets for storing Dogecoin; however, there are some recommendations for the Dogecoin, which you can find on the official website. You can choose to use the hardware or software wallets, simply select what you want from the list.
A suitable computer
As mentioned earlier, you need computing power to be a successful Dogecoin miner. The basic computer specifications can be used to earn few coins from mining. You can use computers that run on Windows, macOS, or Linux. Computers that use a CPU can also be used. However, you will pay huge bills for power consumption.
Your computing system should have an impressive graphics processing unit, for example, computers made for hardcore gaming or editing videos. You should also set up your computing system in a cool room to prevent overheating.
Application Specific Integrated Circuit (ASIC)
This is another essential tool needed for mining Dogecoin. The ASIC has been particularly developed for mining cryptocurrency. Its primary function is to boost your computing power to meet the demand of your mining activities. ASIC machines are quite expensive, so you may want to consider starting with a mining pool where it already exists.
What you need to do is to connect your ASICs arranged accordingly to boost your computing power and feed the computers in your mining setup. This is quite an expensive mission. However, if you can afford it, solo mining is a good plan.
Minimal electricity consumption
Many miners find and relocate to cities that have the lowest energy rates. Electricity bills can quickly erode your income from mining, even if you are doing it on a small scale.
In addition to powering your computing system, you also need to invest in a cooling system to protect your equipment. The heat generated while mining can ruin your computers. The costs of cooling systems will increase your expenses significantly.
Again, you can lower your expenses by choosing to join a mining pool. The shared computing power in a mining pool reduces your energy consumption.
How to get started
As a beginner, there are many mining pools to choose from. It is a personal choice, so you should research properly. Your mining pool can determine the experience you have as a miner. You can find information about mining pools on their linked websites or blog. You should also compare the fees charged by different mining pools. You pay a fee to be a part of the mining pool. It is a normal procedure. But some mining pools charge higher fees than other platforms. Once you find a good fit, it is time to get started.
Download the software
Visit the mining pool’s website, where you will find a link to download the software. You may need to set permissions to allow your browser to download the zipped software file.
After your download is complete, unzip and extract the files you need. You can download free extractors to complete this part of the process. Please ensure you choose the location where you want the extracted files pasted.
Leveraging administrator privilege on your computer, you can now run the files to install on your computer. You need to do that with administrator privileges because the firewall or malware installed on your computer will stop the process.
At this point, you should be able to view the options on your mining software. The options depend on the category of your computing system. There are different options for people using GPUs or CPUs. Also, it would be best if you looked out for the right choice that matches your computer’s operating system, for example, Windows, macOS, or Linux. Select the right option, and the software download should be completed. If your firewall flags the software, you may need to add it to your whitelist to prevent a recurrence.
After you have downloaded and extracted the files for your computer’s operating system, it is time to confirm whether your computer has granted the mining app the necessary permissions to function properly. You can make this confirmation by checking the dashboard to view the hash rate. It should be displayed on your dashboard. If you cannot view your hash rate, you need to troubleshoot the system. Ensure that the mining software version you have installed is compatible with your computer. Here’s a solution, install an older version, and everything will be good, with your hash rate visible.
Now, you can proceed to set up your wallet on the mining app. You will be required to copy and paste your wallet address in the space provided. This is the wallet where you will receive all your earnings from mining activities.
After setting up your wallet, it is time to click the ‘Start button.
You will start mining in the pool with other miners, and your reward is based on the computing power you contribute to validate transactions.
It is considerably easier to start mining Dogecoin compared to other cryptocurrencies in the market. And the profit is not that much, but you will enjoy the experience.
When you have gained experience as a Dogecoin miner, you can start exploring how to mine other cryptocurrencies to have more experience. As always, we advise you to hold as many coins as possible because the price could rise in the future.