In the initial days of cryptocurrency and blockchain, it was almost a trend to build your own cryptocurrency. There were several who quickly gained short-term popularity, amassed a market cap of several million dollars and were as quick to shutdown. Billy Marcus and Jason Palmer, two university students decided they will try their hands as well. They planned to make up a random cryptocurrency, which they based on an internet MEME. It was a whole package of pop-culture references, complete with the much hated Comic-sans themed repository/website, catchy slogans and so on. It was devised as a parody, to show the market how easy and manipulative it was to make a project such as this one. Long term enthusiasts remember the likes of Bitconnect, Namecoin and many others.
Apparently the Internet decided to prove all of us wrong.
Both the founders probably did not realize, that, in the unpredictable future, their joke would turn out to be incredibly valuable in monetary terms, with a dedicated community of loyal users, real-life use cases and much more. It didn’t take much time for Dogecoin to shift its marketing and business strategy from being a joke, to being a cryptocurrency with actual cross-border use, maybe even accumulating a demographic broader than Bitcoin.
What is Dogecoin?
Dogecoin was created by Billy Marcus and Jason Palmer. It was initially created as a parody, but soon turned out to be much more than the creators had planned. It became a sensation on its own.
The team behind it are working hard to make the coin more accessible and interesting to the user, so it can reach even more people than Bitcoin. The community are close and always ready to help with any enquiries you might have.
- Market Supply: Started off as 100 billion but forked to accumulate infinite supply
- Current Supply: Approx. 122 billion (November 2019)
- Blocktime: 1 minute
- Block reward: 10,000 per block
- Inflation rate: 5.2 billion doge per year
- Mining Algorithm: DigiShield
- Difficulty retarget: after each block
- Consensus Algorithm: Scrypt
How to Join the Ride?
Dogecoin transactions are fast and the payout time of the pools are usually every 24 hours. The quick payout along with DOGE’s stable gains, makes mining it very profitable, efficient and desirable. It is considered within the community that mining Dogecoin is the least complex of all cryptocurrencies based on the Proof-of-Work Algorithm.
Mining Dogecoin is like a lottery. To play the lottery you have to do some work, i.e., 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.
What is Mining?
Cryptocurrency mining, or cryptomining, is a process in which transactions for various forms of cryptocurrency are verified and added to the blockchain digital ledger. Cryptocurrency mining has increased both as a topic and activity as cryptocurrency usage itself has grown exponentially in the last few years.
Each time a cryptocurrency transaction is made, a cryptocurrency miner is responsible for ensuring the authenticity of information and updating the blockchain with the transaction. The mining process itself involves competing with other cryptominers to solve complicated mathematical problems with cryptographic hash functions that are associated with a block containing the transaction data.
Cryptocurrency mining differs with respect to the consensus mechanism it runs on. For Bitcoin, it is the SHA-256 protocol, which requires
Pre-requisites to Mining Dogecoin
1. Hardware – ASIC or Personal Computers
Having good and reliable hardware equipment is the most important pre-requisite to mining Dogecoin successfully. Because of its relatively indecent nature, the difficulty of mining is not much when compared to other cryptocurrencies. For that reason, it is still feasible to mine Dogecoin on GPUs and Computers with high computation power. Although much cannot be commented on the future of mining on general purpose equipment. It is advisable to consider investing in ASICs such as the ones mentioned below to most profitable mine Dogecoin.
2. Pool Selection:
It takes considerable research to select a mining pool that is best suited to the miner’s interest. Visiting websites such as Multipool and MiningPoolStats will give the readers information about the existing pools available. One can make decision based on the fee charged, total hashrate of the pool, redistribution period and other stats.
3. Trusted Dogecoin Wallet:
For the rewards to distributed to the miners providing computation power to the pool, one needs to have a reliable wallet provider. Since the wallet IDs of the miners are publicly visible, it is recommended that miners choose wallets that are highly reliable, secure and resistant to attacks.
4. Dependable Connection:
For those considering to mine in pools or individually, a dependable internet connection is of the utmost importance. A generator or power backup is recommended so that one does not disconnect with the network in times of power fluctuations.
In the spirit of the community, mining Dogecoin is an accessible way to get into the crypto scene. With new, more affordable options for mining, like USB Scrypt ASIC miners being made, the barriers to getting involved are lower than ever before. The complexity of getting into Mining Dogecoin is considered the lowest among all cryptocurrencies available in the market.
Best Mining Equipment:
The most important comparison criteria for a miner is efficiency, which measures the miner’s hashrate VS. its power draw. Greater hashrate will get you more return but entails more power costs, which can end up eating your earnings. Mining is a risky business, it involves a significant initial investment.The following are two of the best miners available in the market for Scrypt based mining. Since the miners are limited in their manufacturing, it might be extremely hard to get your hands on one.
1. Innosilicon A6+
|Electricity Usage||2100 W|
2. Bitmain Antminer L3+
Based on the BM1485 chip is Bitmain’s Antminer L3+, a newer version of the Antminer L3. The Antminer L3+ is way ahead of the competition when it comes to hashrate vs. power draw and price. Even though great in computation, the Antminer L3++ is not considered as the most efficient miner. Its power consumption ratio with the hash rate is significantly high.
Merged Mining with Litecoin
DOGE shares the same algorithm with Litecoin – Scrypt, since it was initially forked off of Litecoin. It appears to be quicker and more efficient that the predecessor, SHA-256. The Dogecoin mining block time is around a minute and the network difficulty is way smaller in comparison to Litecoin (2.5mins block time) or Bitcoin (10mins block time). It was the first cryptocurrency to introduce scrypt-based merged mining (at block height 371337).
Merged mining refers to the use of the work done for one blockchain (i.e. parent blockchain) on other smaller child blockchains, using Auxiliary Proof of Work (AuxPoW).
In 2014, Litecoin and Dogecoin merged their mining algorithms into a single and unified algorithm. This means they made it possible to mine both coins in the same process, with a single machine and at the same time. The great advantage about this is that you can mine Dogecoin together with Litecoin. Mining them both at the same time could only increase your income and help the development of both cryptocurrencies.
“Given that block mining rewards are halved every four years for both Litecoin and Bitcoin, merge-mining could potentially become a solution to maintain network security in the long-run as newer cryptoassets, with higher block rewards, could be merge-mined within the same pools,” noted a research study conducted by Binance Research
Since Dogecoin’s switch to AuxPoW in 2014, Dogecoin’s hashrate has exhibited an extremely strong and positive correlation (0.95) with Litecoin’s hashrate. As of July 2019, nearly 90% of Dogecoin’s total hashrate comes from large Litecoin mining pools, with its blockchain processing around 30,000 transactions per day.
Alternative to Self Mining – Cloud Mining
The process of cloud mining makes you a participant in a mining pool and involves buying a certain amount of “hash power.” Each participant has a rightful share of the profits in proportion to the allotted hashing power. Since cloud mining is done via cloud, it negates issues such maintenance of equipment or energy costs.
The process is very simple and only requires a person to open an account with a cloud mining company via its website and select certain things like the contract period and hashing power. However, the presence of fraudulent companies or imposters cannot be refuted, and thus one must be sure of the cloud mining company.
One can find many institutions online who engage in centralized cloud mining services. It is much easier for the investor as it requires less work in exchange for a small fee. Although we recommend the reader to thoroughly research about the Cloud Mining institution before committing to any investment.