Dogecoin is a cryptocurrency that was created in 2013. It is based on the Litecoin protocol and it has a total supply of 100 billion coins. Dogecoin is different from other cryptocurrencies because it was created as a joke. However, it has gained a lot of traction and there are now millions of Dogecoins in circulation. So, is dogecoin something you can or should mine - and if so, do you want to become a Dogecoin miner or mine dogecoin? Let's take a look.
How does Dogecoin work?
Dogecoin works in the same way as other cryptocurrencies. Transactions are verified by miners and added to the blockchain. Miners are rewarded with dogecoins for their efforts.
The coin was originally launched in 2013 and while it was intended as a joke coin at first, it started catching on over time. The crypto community latched on to the idea of a cryptocurrency based on meme. While the coin traded at relatively low values for most of it's life, it underwent a massive pump in 2020 and 2021, soaring to levels just under a dollar. Dogecoin functions similarly to other crypto coins, but there are a few differences. Dogecoin and Bitcoin both have blockchains they run off of, using the solving of blocks to verify transactions. However, Dogecoin uses Scrypt as its base cryptography, whereas Bitcoin used SHA-256.
Dogecoin also has an unlimited number of coins that can be mined, but an algorithm controls how many coins can be mined in a given year, helping control inflation in the ecosystem. Bitcoin on the other hand has a set amount of coins that can ever be mined, making it a scarce resource in the world of cryptocurrency.
The benefit of Dogecoin is that you can get into mining it without significant investment in hardware, unlike the necessary investment needed to mine Bitcoin.
Can you become a miner?
Yes, you can become a dogecoin miner by downloading the appropriate software. You will need to join a mining pool and share your computing power with other miners.
How do you Mine Dogecoin?
So how do you mine dogecoin? Well, the process is very similar to mining other cryptocurrencies. You will need to download some software and join a mining pool. The software will allow you to mine dogecoins and the pool will help you to share the rewards with other members.
To become a dogecoin miner, you first need to download the mining software. Then you need to join a mining pool and share your computing power with other miners.
Here's are the basic steps to start mining dogecoin:
1. Purchase Mining Hardware
The first step in the process is going to be either acquiring or ensuring you have the proper hardware to mine dogecoin. In order to be the most profitable, you're going to want to get an ASI machine that is designed for scrypt-based mining. If you search these terms on google, you'll likely find plenty of options - though due to high demand there are often issues with supply.
2. Installing software and drivers
3. Join a pool
You'll want to join a mining pool next. Again, you do have options here, so you'll want to do a little bit more research on which one seems like the best option for you. The best pools to choose from are:
4. Connect to the Pool
After setting up the account with your mining pool of choice, you're going to want to connect your mining machines to the servers of the pool you just joined. Take a look at tutorials on YouTube for this that are relevant to your specific pool and the hardware that you have aqcuired.
5. Dogecoin wallet
After you've set up all of your mining equipment, the last step is going to be ensuring that you have a place to receive the rewards you'll be getting for mining DOGE. You'll want to set up a Dogecoin wallet and link this with your mining software.
6. Mine away!
After you've done all of this, you're ready to start mining! You'll want to monitor a few things though, like your accounts hashrate, the payout, and your revenue. Some of the mining pools, provide dashboards to help you track all of this with ease. Once you get your rewards from the blocks you mine, you can cash them out into your wallet through your mining pool.
7. Monitor growth and taxes
Did you know the IRS considers mining taxable income? This unfortunately means that you'll need some way to track your mining revenue to ensure you pay as little taxes as possible. Ledgible offers year-round tax tracking for crypto mining completely for free - you'll only pay a small fee to pull necessary paperwork come tax time. You can learn more here.
What are the benefits of mining?
Now that we've learned how to mine dogecoin, we can look at a few of the benefits. Overall, there are several benefits to mining dogecoin. For starters, it is a very profitable activity. Dogecoin is also a very secure cryptocurrency and it has a very low difficulty level. This means that anyone can mine dogecoins without having to invest in expensive hardware like other crypto.
Are there better cryptocurrencies to mine than Dogecoin?
There are many different cryptocurrencies to mine, but Dogecoin is a good option because it is very profitable and it has a low difficulty level. Other cryptocurrencies that are worth mining include Bitcoin, Ethereum, and Litecoin.
Some other cryptocurrencies that you can mine:
- Bitcoin Gold
- Bitcoin Cash
- Ethereum Classic
So, which cryptocurrencies are worth mining? In general, the most profitable cryptocurrencies to mine are Bitcoin, Ethereum, and Litecoin. However, Dogecoin is also a good option because it is very profitable and it has a low difficulty level. Other cryptocurrencies that are worth mining include Bitcoin Gold, Bitcoin Cash, Dash, Ethereum Classic, and Monero.
A summary of Dogecoin and Dogecoin mining
Dogecoin is a cryptocurrency that was created in 2013 as a joke. However, it has gained a lot of traction and there are now millions of Dogecoins in circulation. The process of mining dogecoin is very similar to mining other cryptocurrencies. You will need to download some software and join a mining pool. The software will allow you to mine dogecoins and the pool will help you to share the rewards with other members. There are several benefits to mining dogecoin, including the fact that it is a very profitable activity and it is a very secure cryptocurrency.