If you are unaware of the cryptocurrency world and how it works, the question ‘how to mine Dogecoin’ will either seem half gibberish or a meme to you at best. To understand the cryptocurrency market, all it will take is one Google search. But those search results can be utterly complicated at times. To simply explain what it means, cryptocurrency is a fully digital form asset that can be used as a medium of exchange just as cash or money in your bank can be. In other words, it’s a form of currency that is not tied to any one country or area. It is recorded and maintained in a computerized online ledger with cryptography rules.
There are different types of cryptocurrencies out there and Dogecoin is one of them. Moving on to mining in terms of cryptocurrency, it is basically the process of analyzing, circulating, and maintaining cryptocurrencies. People who mine, become critical auditors that make sure the transactions being made are legitimate and no fraud has occurred. And it pays to do so, which is what attracts people towards this work.
The process of mining includes both physical/hardware support as well as software and intellectual support from the miners. Let’s look at what really is involved where mining is concerned:
Building on what we started this guide with, there is no way of knowing how much knowledge, you as a reader, have about mining Dogecoin. Dogecoin is what happens when you create an idea as a joke but then somebody is like, ‘wait a minute, that could actually work?’ There’s no way to know whether an idea will work or not until you try it and that’s exactly what the Dogecoin founders did. After this cryptocurrency type was introduced in 2013 as a joke, it quickly found popularity among the crypto market.
The mining process seems easy in theory but is a little more complicated than that, especially considering more popular options such as Bitcoin. As Bitcoin becomes further complicated to mine, people are moving over to Dogecoin.
Dogecoin witnessed amazing growth and its value surged to 0.6014 as of May 6, 2021. A similarity that the cryptocurrency market has with the stock market is how people make money through it. You can either choose to keep a Dogecoin if you think it is further going to see growth, or you can sell for the profit. The trade occurs just as the stock market only the investment is not as long-term focused. People who are in the market often ask whether Dogecoin is still worth spending money on since it’s old news. The answer to this is a simple yes because 2021 brought it further towards growth, which makes a potential investment option.
Now onto how it works. Mining basically helps you earn money on every transaction you help power through a smooth process. You earn something called tokens on each successful transaction. There are many ways to commit false and fraudulent transactions, especially with something that was initially considered as fragile as cryptocurrency. There is an entire system of how the cryptocurrency world works and mining is the process of proofing the transactions are actually taking place.
The network of the cryptocurrency world handles all these procedures with exact precision. Another comparison that can be made with the stock market is the time-bound nature of the crypto market. The miner who ends up cracking a transaction, securing the procedure before anyone else, gets paid in the tokens mentioned earlier.
It is indeed a difficult and complicated technical procedure, which becomes more complicated as the number of miners increases every day. The network depends upon mining to keep the entire system secured and protected from hackers or intruders from doing anything unauthorized. This is why there is a need to decentralize the process as to make sure the collective efforts of miners defy any activity that is not authorized.
The procedure includes miners creating an energy barrier that blocks any intruders from reaching the network to ensure transactions are separated in a block from those activities. The miners sacrifice hashing power in order to complete the task set by the network and that helps them earn their revenue.
Mining is characterized by three different types according to functions. Each type has its way of mining and one is considered fishier than others. Let’s have a look at each:
- The most basic way of the mining is solo mining. The name tells you what there is to this type of mining, the team flies solo and you are the driver of the ship. The machine you use is known as the node in crypto terms that helps you achieve your task. Going solo with this complicated task can be difficult to take on, but it is more financially rewarding as you do not have to submit any fee to join a pool. On the other hand, the entire profit is yours to take, there is no other partner to split it with. However, people got skeptical after the rise in Dogecoin, and therefore taking a collective risk is preferred.
- The second type is pool mining. The pool is stronger than solo because joining a Dogecoin pool enables you to combine your machine’s processing power with that of the rest of the pool members. This increases your chances of reward because you basically have heightened processing power to perform the task faster than other solo miners. The issues many complain about with pool-mining are the pool fee you have to pay when you join a pool and having to split your rewards. This makes the profits really thin, considering pools have a considerable number of members.
- The third type is cloud mining and it is the least credible type. This type refers to outsourcing your work completely, instead of going through the entire process yourself. All you do is invest money and the third-party miners put it to power the machine and finish the task. You earn a profit according to the amount you invest, it seems pretty simple. But the disadvantage of this type is that sometimes you don’t earn any profits at all. People started taking advantage of this type of mining, they take investment money through mining contracts but do not send out any paybacks or profits. This has left the cloud-mining category in a strange place because there are still good and credible service providers out there to choose from.
Requirements & Process
Like every other technical job, this requires certain equipment (hardware) and the internet, through which the work gets done.
The process of mining Dogecoin can be done through any computer. But professional mining demands hardcore mining equipment that requires a certain amount of energy and involves a complex process. There are a couple of options, a Dogecoin miner is one and another one is a mining rig.
People often assume that they are the same thing with different names, but that is not true. Imagine a PC that is built to just mine, that is a mining rig. A CPU’s processing power works fine for the task, but GPU power works differently for mining. If this is the option you choose as a miner, your equipment will have comparatively cheaper accessories and systems, except for the expensive GPUs. But you invest in what matters; if enhancing one part of the equipment aids your process positively, you should go down that road.
A CPU comparatively to GPU can take on much less power and the processing becomes slower. This is why you need the GPU’s ability to process power in order to perform the mining properly. You also need to make sure the motherboard will be able to take multiple GPUs as plug-ins. The good thing about this type of hardware system is that you can start small, with an appropriate GPU level and then upgrade as you go and make progress. This is considered smart since GPUs can be expensive, thus, you spend when the need for more powerful processing arises.
The second option you have for the equipment is the Doge miner. ASIC or application-specific integrated circuit miners are the two versions recommended for doge miners. Many people think that used mining rigs being sold are also a good option, but that would not be a smart choice to make. Unlike mining rigs, these devices are built already and you don’t need to put any more effort into it before you start your mining Procedure. The ASIC devices used for Litecoin are good for Dogecoin as well because both those currencies use a similar Scrypt algorithm.
Regardless of the choice, you make in terms of devices, there are some profit equations you need to balance in order to make sure your cost is being recovered in the profits you make. For that, you need to determine what the hash rate for your choice of hardware will be. Moving on, make sure the profits from your rewards cover those monthly costs you will need to maintain or upgrade your equipment in any case.
There are websites/online services and something called a mining profitability calculator that can help you make an estimate of your cost and profits from rewards. We already mentioned how a mining rig consumes more power than a CPU does, which is why you need to prepare accordingly. Benchmark services provide you an estimate on what your rig’s processing power is so that you can use it to consider your plan.
If you choose the pool-mining method, some pools offer these services along with them. The electricity costs and hash rate combine to give you the figure you need from any profitability calculator. The number you get will really determine whether you should choose that equipment or find an alternative because the cost is not matching up. Lastly, the storage issue with mining equipment needs to be addressed if you see yourself doing this for a considerable amount of time in the future. It can get loud and the systems tend to overheat due to the use of power constantly, therefore choose a separate space that keeps it cool and protects you from the loud noise.
The type of software you need depends on your equipment. Since we have largely focused on GPU mining throughout this guide, let’s look at software from the same perspective. Nvidia or AMD are the two mining software that stands out from the list of innumerable others. Your decision regarding the software depends on which GPU you have in possession, even if the list of options is long. For the new miners, EasyMiner, CGminer or CuraMinder are highly recommended due to their great user interface that makes it easy to use. Another option for Nvidia is the CUDA Miner that makes the process smoother for the system. And ASIC-miners can take aid from MultiMiner which is already considered one of the best for Dogecoin mining.
We’ve already talked about how risky cloud mining can be if you do not do your homework regarding the subject you are getting involved with. This is a type of mining that requires only investment from your end, and the rest of the work is done by a mining company. This is usually preferred by interested folks who do not want to invest any effort into the process.
Considering how it takes all the pressure away from a person and all you have to do is invest your money, this seems like a good choice for many. The only catch is that people exploit it to commit fraud. We have already discussed how this is a grueling process since you do not know what you might be getting yourself into. Therefore, having informed about the risks, there are a couple of credible options that you can go for if you choose cloud-mining:
- Launched in 2013, Eobot is one of the first mining companies. With a 33% rate of maintenance, it is quite expensive for the entire process. But sources vouch for its credibility. Moreover, its compatible system is stable enough to carry you through with profits. It offers 20+ cryptocurrencies in its system, and Dogecoin is one of them. There has been a notice that they might be shutting down operations, therefore if you want to take advantage of their service, now might be the best time.
- On the other hand, we have NiceHash, which is a renting and leasing platform for hashing power. The Slovenian business has an integrated system that connects buyers and sellers. This makes it incredibly easy for you to rent hashing power whenever you like and use it for Dogecoin mining. It is by far considered the most transparent platform to do so.
A fair question many ask is what are the chances of making a considerable profit through mining. The answer to this question might have been different a year back, 2020 was not a profitable year for Dogecoin investors. But in 2021, it has seen considerable growth and stands at a relatively profitable rate. It has reached a record high and if there ever was a clear profitability vision, it is now. Some people have used this moment to bring back the original meme the currency is associated with. But the truth is that the boost has given many people an idea on how well it could do considering the circumstances. Since the value has already crossed the 50 cents mark, many speculators have hoped it will cross $1 which is a huge deal for the crypto market.
Considering all this, it makes perfect sense that investing in Dogecoin and mining would be profitable for the stakeholders involved.
For a long period of time, Dogecoin continued being in the sidelines due to its low profitability rate and unpredictable nature. But the positive change this year has brought into Dogecoin makes investing worth it. Cryptocurrencies are all different in their own ways, therefore if you have dealt with others before, you will still need to learn about Dogecoin before you get into it. Take everything into consideration and then decide what your move is going to be.