How is it possible to mine Dogecoin?
Dogecoin is a minable cryptocurrency, based on Proof-of-Work, but does not use the same algorithm as Bitcoin.
In fact, similar to Litecoin, it uses scrypt, which is a mining algorithm that requires different equipment and software, which allows Dogecoin miners to mine LTC as well.
On average, a new block is mined about every minute, with a prize of 10,000 DOGE for the miner who manages to validate a block. High computing power equipment such as ASICs are not required to mine DOGE.
There are now over 128 billion DOGEs in circulation, and they are increasing at a rate of about 5 billion per year. There is no upper limit to its supply, so this is inflationary in nature.
However, Dogecoin mining is less decentralized than Bitcoin mining, as the largest mining farm holds about 20% of the total computing power, while the top three hold over 52%.
What it takes to mine Dogecoin
Since it is much less difficult than Bitcoin mining, Dogecoin can be mined individually if desired.
Furthermore, since nearly 1,500 blocks can be mined in one day, it is more likely to succeed in mining one block with DOGE than it is with BTC.
However, given the concentration of hashpower in relatively few large pools, a lot of computing power is required to be able to mine alone.
This requires dedicated hardware, in particular GPUs and ASICs. On top of that, dedicated software is obviously needed, such as Pooler’s cpuminer, EasyMiner for GPU mining, or CGMiner or MutliMiner for ASIC mining.
For those who do not have much computing power, it is possible to participate in a mining pool. In this way, users pool their computing power with that of other miners and share any proceeds in proportion to the computing power made available.
It has to be said, however, that there is a certain amount of competition within the mining pools themselves, so that in order to achieve significant earnings, it is necessary to use a considerable amount of computing power.
In order to participate in these mining pools, it is necessary to register, download, install, configure and run the appropriate software.
There is actually also a third option, namely cloud mining, which allows renting the equipment for mining on special platforms, but in this case a certain amount of caution is required, as unfortunately cloud mining offers often conceal attempts at fraud.
In this case, only those that do not promise any profit and leave the user responsible for configuring the rented machines can be considered theoretically reliable. As for the others, they are often only lending money to companies that promise to use it for mining, but without giving any certainty.
Despite Dogecoin‘s claim to be the ‘currency of the people’, Dogecoin mining is in fact not for everyone, although it is much easier than for instance Bitcoin. Moreover, the competition is such that it is very difficult to mine DOGE with non-dedicated equipment, which is not insignificantly expensive.