9/20/2022 | Go Banking Rates
How To Mine Dogecoin: A Full Guide for Beginners
If you are interested in earning extra income from your home, mining cryptocurrencies is one way to do it. While you’ll need to make an upfront investment in a mining computer and you’ll also have the ongoing costs of electricity to power your miner, mining crypto can create passive income over time.
t is easy to get started mining dogecoin and you can earn significant profits over time. If the price of DOGE increases, each coin you have mined gains even more value. Mining can be fun and profitable as you set yourself up to earn passive income for years.
You can get started mining dogecoin in just four steps.
Set up your wallet
Choose a mining pool
Set up your hardware and software
What Is Dogecoin?
Dogecoin began as, quite frankly, a joke. In 2013, IBM software engineer Billy Markus and Adobe software engineer Jackson Palmer met on Twitter and decided to combine two hot trends at the time — “doge” and Bitcoin.
At that time, a meme of a Shibu Inu was circulating, used to share thoughts on anything from fad diets to naps. Playing on that, Palmer tweeted, “Investing in Dogecoin, pretty sure it’s the next big thing.” The tweet received an unexpectedly positive response, so Palmer quickly bought the domain Dogecoin.com.
Markus, who was working on programming his own crypto, apparently agreed with Palmer. He stumbled across the site and reached out to Palmer to form a partnership. And dogecoin was born.
In early 2021, long after the doge meme crossed the Rainbow Bridge only to appear sporadically on Facebook, dogecoin took off thanks to a series of tweets between Elon Musk and Snoop Dogg. In January 2021, as GameStop stock started to skyrocket thanks to the Reddit subthread /WallStreetBets, dogecoin hitched a ride and climbed 600%. In May 2021, it reached a high of $0.7376.
Highs and Lows
At its peak, the coin achieved an $80 billion market cap. It is an open-source, peer-to-peer cryptocurrency that is considered an alt-coin — bitcoin is the original crypto, and all other coins are considered alt-coins. Dogecoin, in spite of its humble beginnings as a joke, is one of the top 10 cryptos, according to CoinMarketCap.
Although the coin dipped as low as $0.053 during the crypto winter, it’s slowly starting to climb again. If you begin mining DOGE now, and crypto continues to climb, you could create a small nest egg to reinvest, spend or save.
This guide will show you everything you need to know to mine dogecoin, including how long it takes and what you can expect to spend.
How Do I Start Mining Dogecoin?
You’ll need to do a little research at each step to make sure you choose the right hardware and software and understand how your wallet and mining pool work, but getting started takes just four steps.
1. Set Up Your Wallet
When you first start mining dogecoin you’ll need a crypto wallet that is compatible with dogecoin. Cold storage wallets are the safer option, as they store your crypto off-line, where it is not susceptible to hackers, until you are actively using the wallet to trade and connect it to the internet.
If you prefer to have quicker access to your wallet, you can opt for a hot storage wallet, which stays online — but be aware that this comes with additional security risks.
After you have your wallet, you’ll want to choose a mining pool to join.
2. Choose a Mining Pool
This step is optional — while you can mine solo instead of joining a pool, the expense of a solo mining rig and its associated energy usage can be cost-prohibitive. It may be a better option to start in a pool and switch to solo mining later, if your mining is going well and you’ve made enough to justify the cost.
To start, search online for a mining pool. DOGE is different than many other alt-coins because you can mine for litecoin and then get paid in DOGE if desired.
Some popular mining pools include Aikapool, which controls 7% of the dogecoin mining hash rate market share. Litecoinpool allows you to mine LTC and DOGE. Zpool is another popular dogecoin miner, controlling 2% of the mining hash rate share.
When you compare mining pools you’ll want to consider the following:
Percentage of fees
Type of payment system
Pool hash rate
Estimated time per block
3. Set Up Your Hardware and Software
You’ll need dedicated hardware for mining dogecoin. You can choose to rent someone else’s hardware through cloud mining — a good option if you don’t have the space or money for your own rig — or you can set up your own CPU, GPU or ASIC rig. If you’re joining a mining pool, you can probably manage with a less expensive setup, but if you’re mining solo, you might find you need one of the more expensive options, like an ASIC rig, to make it worth your while.
In most pools, you’ll need to create an account that includes your crypto wallet address, download the mining software and configure it to mine for DOGE. You may also have to choose your payment method. For instance, in the case of Zpool you can choose to mine bitcoin and get paid in DOGE, or the reverse.
4. Start Mining
Once you have your wallet, mining pool and equipment set up, you can start mining.
Is It Expensive To Mine Dogecoin?
It’s important to remember that most businesses or investments have some startup costs, and DOGE mining is no different. Working as a solo miner or in a pool will affect your costs.
When you’re a solo miner, you’ll face several considerations you won’t encounter if you begin with pool mining. You’ll need a powerful computer — preferably an ASIC miner with extensive cooling systems to avoid damaging the machines. ASIC miners can be costly.
In a series of reviews of various crypto miners, Software Testing Help shares a simple miner that costs $2,500 and uses 950W of power. The review states that you’d earn $5.53 per day, after subtracting the cost of the machine and the electricity to run it.
You can try mining with a Windows or Linux PC with a Graphics Processing Unit (GPU), otherwise known as a gaming computer. However, the power consumption, coupled with the costs of the GPU-based computers and the cooling systems required, makes solo mining of DOGE fairly costly and, most experts say, unprofitable.
The Dogecoin website says using a GPU for solo mining will probably not be profitable due to the slow mining rate and high energy bills.
Unless you can afford one — or, better yet, many — ASIC mining computers, pool mining is a far better option for startup miners without the support of a big corporation behind them.
You will still get better results with an ASIC miner than a GPU, even in a pool. But if you can’t afford the startup costs of an ASIC machine — and you have access to affordable electricity — you may be able to use your GPU to get started and learn the basics, with the intention of ultimately upgrading to a better rig.
How Long Does It Take To Mine One Dogecoin?
It currently takes 0.004 days to mine one dogecoin at the hashrate of 9,500 MH/s, according to CoinWarz. However, you can’t actually mine a single DOGE at a time. Dogecoin is mined in blocks of 10,000, and it takes roughly one minute to mine a full block.
Of course, the speed it takes to mine a block varies based on the mining pool you chose and the power of your miner. If you are mining with a GPU instead of an ASIC, you will not be able to mine that quickly and your profitability will drop. The rate of mining and profitability also change depending on the total computer power available at any one time to mine blocks and generate hashes.
It’s important to check your profitability to determine if it’s worth continuing, or decide if you need to switch mining pools, upgrade your mining computer or even sit it out for a while until profitability increases.
CoinWarz calculated the profitability of mining DOGE on Sept. 15, 2022, using the following parameters:
Mining difficulty: 4,542,503.70
Mining hashrate: 9,500 MH/s
Power consumption: 3,425 watts at $0.10 per kWh
Block reward: 10,000 DOGE at $0.05
After deducting mining fees and power costs, miners can earn $16.67 in one day.
This figure will vary daily, however, and is just an example. Likewise, the value of dogecoin to USD will also change. At the rate above, you could earn an extra $112 per week and an extra $448 per month mining DOGE.
Keep in mind, the costs of your electricity and your mining rig, as well as fees you pay, may be tax deductible. You’ll want to speak with a tax accountant to determine your tax liability based on your crypto mining income and what you can deduct to reduce your bottom line.
How Many DOGE Can You Mine Per Day?
Based on CoinWarz’s research and statistics, at the current hash rate of 9,500 MH/s, you can currently mine 420.7 dogecoin per day, which would probably make Elon Musk very happy. Again, this number will rise and fall based on the number of miners and the difficulty of mining.
Dogecoin is one of the easiest coins to mine, beating out litecoin, bitcoin, ethereum and many others to top the list with the lowest difficulty score based on computational requirements. That means you will get more bang for your buck, even if you don’t have the best ASIC miner available, mining DOGE.
Mining dogecoin can be a fun way to earn passive income. The easiest way to mine DOGE is in a mining pool. You may still want an ASIC mining computer rather than a GPU to mine with the greatest efficiency and maximize your profits.
To reduce electricity costs, you may want to consider using solar power or another clean, affordable energy source to power your mining computer. Make sure to have the proper cooling systems in place, as mining computers heat up quickly.
Remember to assess your profitability daily and make adjustments to keep earning DOGE. Of course, the more miners you can invest in, the more money you can make. #DogeExchange www.doge.exchange