Dogecoin, as has been repeated many times, has reached stellar heights because it is a mere joke cryptocurrency.
Aside from its rising but volatile value and a loyal, bullish trading community, Dogecoin has drawn a record influx of miners into its network. It is therefore expected that more will follow. But the question is, what do you need to know to start mining Dogecoin? Is it profitable? Is It Really Worth the Serious Crypto Miner’s Time?
Truly, the coin is no longer just a deliberate parody project led by software engineers Jackson Palmer and Billy Markus who wanted cryptocurrency to be as “ridiculous as possible”. Well, that joke turned out to be one of the top ten crypto assets in the world, sporting a market cap of $ 32 billion and a global fan base.
Dogecoin’s phenomenal rise led to increased interest in mining
Its phenomenal rise in early 2021 is attributed to internet pop culture and continued advancement from prominent investors like Tesla and SpaceX CEO Elon Musk and Dallas Mavericks owner Mark Cuban. This has generated significant interest in Dogecoin mining, with mining profitability rising to a new six-year high.
Also Read: Dogecoin Price Goes Up With 400% Increase: How To Mine The Popular Cryptocurrency
DOGE’s blockchain runs similarly to other digital coins like Bitcoin and Litecoin, using a system that adds new blocks to a decentralized ledger and reaches an agreement among network participants.
This is known as the “proof-of-work” mechanism, which involves “mining” where participants compete for the right to add new blocks of outstanding transactions to the blockchain ledger using dedicated and high quality computing equipment, a comprehensive guide on Yahoo! ! Finance said.
The miners would then use these computers to create a fixed length code called a “hash” with a value equal to or lower than the target value of the new block known as the “target hash” . The miner who creates the winning code receives the exclusive right to add new transaction data to the new block in the chain and is thus rewarded with newly minted coins.
The hashes generated are random and therefore follow a trial-and-error process until a miner wins.
How much Dogecoin can be mined in a day?
Unlike most cryptocurrencies, which have a maximum supply cap, Dogecoin supply will grow indefinitely over time as miners receive new coins. These new blocks are found on the Dogecoin blockchain about once per minute, as opposed to Bitcoin which takes about 10 minutes to discover new blocks. In other words, it would only take a minute to mine a Dogecoin, but on average, according to a Dogecoin mining calculator, a miner could mine 95.6245672 Dogecoin per day at a hashrate of 2,200,000 kilos of hashes per second.
Dogecoin uses a hashing algorithm called Scrypt, which makes mining faster and more energy efficient.
In the beginning it was always easier to mine Dogecoin with fewer participants in the network. Everyone in the network could mine the coin individually. As DOGE’s popularity increased, the mining process became more sophisticated and complicated, which resulted in the miners forming groups called “mining pools”.
These mining pools mine Dogecoin as a unit. The rewards are split evenly among pool members based on the amount of computing power each miner commits. In addition, Dogecoin is also earned through cloud mining, with miners or mining pools renting computing power from a data center and paying a monthly or annual fee. The coin is mined in the data center by a mining pool and then shared with each participant based on the computing power paid.
Is Dogecoin Profitable For Miners?
But will Dogecoin make the miners profitable? It seems worth the effort with the recent price hikes, but miners shouldn’t expect to become millionaires in no time. To get the best possible chance of winning, it would certainly be helpful to acquire the most powerful hardware such as an application specific integrated circuit (ASIC) with CGminer or EasyMiner and join a mining pool.
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