Dogecoin Mining 2022: Everything You Need to Know. Dogecoin’s incredible run-up last year attracted record numbers of miners to its network. But how easy is it to mine dogecoin and what do you need to get involved?
Dogecoin has come a long way since its modest beginnings as a joke cryptocurrency centered around a viral internet meme of a Shiba Inu “doge.” What was once a parody project purposefully created by software engineers Jackson Palmer and Billy Markus to be “as ridiculous as possible,” is now a top fifteen crypto asset boasting a $22 billion market capitalization and a global fanbase.
Dogecoin’s spectacular rise over the first half of 2021, driven largely by internet pop culture and relentless promotion from Tesla CEO Elon Musk, unsurprisingly reignited significant interest in dogecoin mining and sent mining profitability to a new six-year high.
Even with its recent success, mining dogecoin is still significantly less competitive than mining bitcoin (but still difficult). New blocks are also discovered much faster and coin rewards are substantially higher – 10,000 DOGE per block reward vs 6.25 BTC.
How does dogecoin mining work?
Dogecoin’s blockchain network employs the same system for adding new blocks to its decentralized ledger and reaching agreement among its network participants as bitcoin, litecoin and many other cryptocurrencies.
Each hash generated is completely random so it’s simply a process of trial and error until one miner wins.
Here is how dogecoin mining compares to bitcoin and litecoin mining (as of January 2022):
DogecoinLitecoinBitcoinAlgorithmScryptScryptSHA-256Block time1 min2.5 min10 minDifficulty5.05 million11.89 million24.37 trillionReward per block10,00012.56.25Total supplyInfinite84,000,00021,000,000
Unlike a vast majority of cryptocurrencies, however, dogecoin doesn’t have a maximum supply cap.
Despite using the same Proof-of-Work system, dogecoin mining operates slightly differently than bitcoin.
Bitcoin, which is the oldest and largest cryptocurrency by market cap, uses a hashing algorithm called SHA-256. This might sound complicated but a hashing algorithm is simply a function that generates a fixed-length code using a certain technique. Think of it as random code generators, where each hashing algorithm creates random codes in a unique way.
Dogecoin and litecoin use a hashing algorithm called Scrypt, which is less complex than SHA-256. This makes mining litecoin and dogecoin much faster and less energy intensive than bitcoin.
How to mine dogecoin
In its early years, mining dogecoin was much easier because very few people participated in the network. This meant anyone could mine the coin individually. However, as the popularity of DOGE increased, the mining process became more difficult, prompting miners to come together and form “mining pools.”
A mining pool is a group of individual miners who mine the cryptocurrency as a single entity, or node, by merging their computing power. The rewards are then distributed among pool participants proportionally by the amount of computer power committed by each miner.
Today, there are three main approaches to mining dogecoin:
Individual mining/solo miningMining poolsCloud mining
Solo mining vs. dogecoin mining pools
Popular dogecoin mining pools in 2022 include:
Dogecoin cloud mining
Dogecoin can also be earned through cloud mining, which is not really mining per se. Cloud mining basically involves renting computing power from a data center and paying a monthly or annual fee based on an agreed-upon contract. The chosen coin is then mined at the center via a mining pool and then shared with you based on how much computing power you pay for.
The main drawback of cloud mining is that most contracts are time-locked, meaning you can lose money if DOGE prices drop below the operational and electrical costs associated with mining it.
Nevertheless, this can also be just as effective as joining a mining pool and does not require the user to own any specialist equipment. Anyone opting for the cloud mining route simply needs a dogecoin wallet.
Dogecoin mining must-haves
For individuals interested in mining dogecoin solo or via a dogecoin mining pool. there’s a range of equipment needed in order to get started.
There are three types of hardware equipment you can use for DOGE mining:
CPU – your PC’s central processing unit might be an option even today. but it is not really recommended because it can cause damage to your computer by overheating it.GPU – a graphics processing unit is more powerful than a CPU and can be used to mine dogecoin.ASIC – an application-specific integrated circuit is a computing machine built specifically to generate hashes. ASICs are far more powerful than GPUs and, unsurprisingly, more expensive. Anyone planning to buy an ASIC should look specifically for a Scrypt-based ASIC miner.
Once you’ve decided which type of hardware to use, you’ll also need to download software to accompany it. Here are some of the leading software options available at the moment:
A dogecoin wallet is essential for mining and provides a secure place to receive any dogecoin rewards generated from mining. A crypto wallet consists of a public key address for sending and receiving DOGE and a private key to access it. There are several types of wallets, such as:
Online: Anyone mining for fun can opt to use an online wallet such as Coinbase or Binance. These aren’t as secure as other wallet options but are much more convenient to use.Software: Software wallets reside on your PC or mobile device rather than online, which makes them more secure. These are physical devices similar to a USB stick that store crypto offline. Leading hardware wallets include the Ledger Nano S and Trezor Model T.
It’s worth noting, good access to electricity and an internet connection are essential for mining any cryptocurrency.
Is dogecoin mining profitable?
Well, dogecoin mining can still be profitable, especially thanks to the recent price surge. However, don’t expect to become a millionaire. Having powerful hardware and joining a pool will give you the best possible chance of making a profit from dogecoin mining.
After the year dogecoin has had it’s no wonder many have started mining it again. .Read MoreCoinDesk