What is Dogecoin Mining?
Dogecoin mining is the process of being rewarded with new Dogecoin for checking transactions on the Dogecoin blockchain. Simple, right? Well no, it’s not quite that simple, nothing ever is!
Mining Dogecoin is like a lottery. To play the lottery you have to do some work. Well, actually your computer (or node) has to do some work! This work involves the confirming and checking of transactions which I talked about in the last section.
The node that solves the mathematical problem first wins! It can then attach the newly confirmed block of transactions to the rest of the blockchain.
Most cryptocurrency mining happens this way. However, Dogecoin mining differs from other coins in several important areas. These areas are:
- Algorithm: Each cryptocurrency has a set of rules for mining new currency. These rules are called a mining or hashing algorithm.
- Block Time: This is the average length of time it takes for a new block of transactions to be checked and added to the blockchain.
- Difficulty: This is a number that represents how hard it is to mine each new block of currency. You can use the difficulty number to work out how likely you are to win the mining lottery. Mining difficulty can go up or down depending on how many miners there are. The difficulty is also adjusted by the coin’s protocol to make sure that the block time stays the same.
- Reward: This is the amount of new currency that is awarded to the miner of each new block.
How to Mine Dogecoin
There are two ways to mine Dogecoin, solo (by yourself) or in a Dogecoin mining pool.
Note: A Dogecoin pool is a group of users who share their computing power to increase the odds of winning the race to confirm transactions. When one of the nodes in a pool confirms a transaction, it divides the reward between the users of the pool equally.
Dogecoin Mining: Solo vs Pool
When you mine as a part of a Dogecoin pool, you have to pay fees. Also, when the pool mines a block you will only receive a small portion of the total reward. However, pools mine blocks much more often than solo miners. So, your chance of earning a reward (even though it is shared) is increased. This can provide you with a steady new supply of Dogecoin.
If you choose to mine solo then you risk waiting a long time to confirm a transaction because there is a lot of competition. It could be weeks or even months before you mine your first block! However, when you do win, the whole reward will be yours. You won’t have to share it or pay any fees.
As a beginner, I would recommend joining a Dogecoin pool. This way you won’t have to wait as long to mine your first block of new currency. You’ll also feel like you’re part of the community and that’s what Dogecoin is all about!
What You Need To Start Mining Dogecoin
Before you start Dogecoin mining, you’ll need a few basics. They are:
- A PC with either Windows, OS X or Linux operating system.
- An internet connection.
- A Shiba Inu puppy (just kidding!).
There are two different types; a light wallet and a full wallet. To mine Dogecoin, you’ll need the full wallet. It’s called Dogecoin Core. Now that you’ve got a wallet, you need some software and hardware.
Dogecoin Mining Hardware
You can mine Dogecoin with:
- Your PC’s CPU
- A GPU
- A Scrypt ASIC Miner
Dogecoin Mining Software
Whether you’re mining with an ASIC, a GPU or a CPU, you’ll need some software to go with it. You should try to use the software that works best with the hardware you’re using. Here’s a short list of the best free software for each choice of mining hardware;
- Scrypt ASIC miner: MultiMiner- Great for mining scrypt based currencies like Litecoin and Dogecoin. It can also be used to mine SHA-256 currencies like Bitcoin. CGminer and EasyMiner can also be used with ASIC miners.
Dogecoin Cloud Mining
Cloud mining is mining without mining! Put simply, you rent computer power from a huge data center for a monthly or yearly fee. The Dogecoin is mined at the center and then your share is sent to you.
All you need to cloud mine Dogecoin is a Dogecoin wallet. Then choose a cloud mining pool to join. Eobot, Nice Hash and Genesis Mining all offer Scrypt-based cloud mining for a monthly fee.
There are pros and cons to Dogecoin cloud mining.
- It’s cheaper than setting up your own mining operation. There’s also no hot, noisy hardware lying around the house!
- As a beginner, there isn’t a lot of technical stuff to think about.
- You get a steady supply of new currency every month.
- Cloud mining pools don’t share much information about themselves and how they work. It can be hard to work out if a cloud mining contract is a good value for money.
- You are only renting computer power. If the price of Dogecoin goes down, you will still have to pay the same amount for something that is worthless.
- Dogecoin pools have fixed contracts. The world of crypto can change very quickly. You could be stuck with an unprofitable contract for two years!
- It’s no fun letting someone else do the mining for you!
Now you know about all the different ways to mine Dogecoin we can ask the big question, can you make tons of money mining Dogecoin?
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