How to Mine Dogecoin

OVERVIEW

Dogecoin can be mined similarly to Ether (ETH) and Bitcoin (BTC).
Mining Dogecoin (DOGE) is the process of computers solving mathematical puzzles and adding blocks to the Dogecoin blockchain.
A GPU (Graphics Processing Unit) or an ASIC mining machine is recommended to mine DOGE.
Joining a mining pool is an easy way to start mining Dogecoin.

WHAT IS DOGECOIN MINING?

Dogecoin is a distant Bitcoin fork with several significant differences in its source code. However, its mining process works similarly to Bitcoin mining. Like Bitcoin, Dogecoin is a decentralized cryptocurrency whose digital ledger is maintained by a decentralized network of nodes instead of one single party. As a result, there is no central entity to distribute the cryptocurrency out into the world. Thus, the distribution of coins has been designed in a decentralized manner.

Instead of a pre-mine, where the entire stack of Dogecoin would have been created in one fell swoop before the network’s launch, Dogecoin is issued and released by the protocol in a pre-programmed way — similar to Bitcoin. The receivers of the newly issued Dogecoins are the so-called miners. These vital network participants are the ones that grow the Dogecoin blockchain and are, in return, rewarded with DOGE. The term mining is an analogy borrowed from extracting precious metals from the ground, as they also need to be mined at the cost of labor and energy.

Costs and energy are also incurred for Dogecoin miners, but they are not the result of digging the ground in search of precious metals. The energy used to mine Dogecoin is going to dedicated computer machines, powering processors in a global competition to solve mathematical puzzles. Whichever miner successfully solves this puzzle first and thereby outcompetes his contenders gets to add a new block to the blockchain and is rewarded with Dogecoin in what is called a block reward. This mechanism handsomely rewards the miners for providing computational power to the Dogecoin network, thereby securing the network for the decentralized handling of peer-to-peer transactions.

DOGECOIN’S TOKENOMICS

Unlike its big brother, Bitcoin, and Litecoin, Dogecoin doesn’t have a fixed upper coin limit and is an inflationary currency. But this wasn’t always the case. When created, Dogecoin originally had a fixed coin cap of 100 billion coins, and the block reward was set to halve every 100,000 blocks until block 600,000 was mined. After that, the block reward would be at a fixed rate of 10,000 coins until the 100-billion coin cap was reached. According to the mining schedule, this would have been the case approximately one year and 160 days after launch.

However, at the beginning of 2014, three months before the last block reward would have been paid out, the developers decided to give Dogecoin a constant tail emission by keeping the block reward at a flat 10,000 coins per block. Dogecoin became a disinflationary currency with a slowly declining inflation rate (3.6% in 2024, 3% in 2030, 1.5% in 2065, …).

As a result of removing Dogecoin’s hard cap supply, its price began to decrease, and the network’s hash rate declined significantly throughout 2014. To protect the network from 51% percent attacks, the developers decided to enable ‘merge mining,’ which allowed the Dogecoin network to receive a hash rate from other proof-of-work blockchains running on the same scrypt-algorithm. Merge mining will enable miners to contribute computing power to two chains at once and compete for both rewards without splitting the provided hash rate between the two networks. As a result, miners today can make mine both Dogecoin and Litecoin simultaneously.

PROCESS AND REQUIREMENTS

Mining Dogecoin requires the provision of processing power, also known as hash power, to the Dogecoin network. Because Dogecoin represents an open, permissionless system like Bitcoin, anyone with access to computer-processing power can participate in mining. In the early days of Dogecoin, it was very well possible to mine the cryptocurrency using home CPU and GPU computer hardware. Due to Dogecoin’s surge in popularity, ever more hash power is being provided to the network, making mining increasingly more difficult. Dogecoin can no longer be mined efficiently with a computer processing unit (CPU). At least a powerful graphic card unit (GPU), or better, a so-called application-specific integrated (ASIC) mining machine, is necessary to provide relevant hash power to the network.

Like the Bitcoin mining industry, Dogecoin mining today is dominated by mining pools. If a miner can only provide limited computing power, connecting these mining machines to so-called mining pools is best. This way, a smaller miner can team up with a lot of others’ hash power, making it more probable that they will get a steady flow of block rewards from their mining activities. Whenever the respective mining pool finds a new block, each miner receives a share of the rewards proportional to the hash power they have contributed. Further, most of these mining pools allow for merged mining, enabling miners to participate in mining multiple scrypt-based currencies at once without having to split up their hash rate.

HOW MUCH CAN YOU EARN MINING DOGE?

A miner’s profitability depends on four variables: Energy costs, hash power provided, the current Dogecoin price, and the block reward. The energy costs are the most important of these parameters, which enormously vary depending on a miner’s geographic location. The other three variables are similar for all miners. Therefore, miners tend to set up their equipment in places with comparatively low energy costs, making their mining business more profitable.

They are looking at the most profitable GPU we see that they make $0.25 – $2 a day, depending on the current Dogecoin price. Depending on the model, it takes 2 to 3 years to amortize the GPU. Some newer Nvidia models also provide half the hash rate of previous models, making them less attractive for mining to ensure availability for other use cases. In summary, buying GPUs for mining Dogecoin (and Litecoin) at current price levels is rather unattractive. But for someone owing a powerful GPU, it can be an excellent way to earn a few extra bucks.

Things look better when mining with the newest model ASIC miners. These make a profit of approximately $10 – $40 a day when mining both Litecoin and Dogecoin simultaneously and take around 1 to 2 years to pay off.

HOW LONG DOES IT TAKE TO MINE 1 DOGECOIN?

The Dogecoin network pays a block reward of 10,000 DOGE for each block added to the blockchain. The block time is one minute, meaning, on average, every minute, one new block, or 1,440 blocks, is added to the chain every day.

10,000 DOGE (block reward) x 1,440 (blocks per day) = 14,400,000 DOGE are mined every day.

How long it effectively takes to mine 1 Dogecoin depends on how much hash power a miner provides to the network. With the newest ASIC mining machines, approximately 7 DOGE can be mined every hour per ASIC.

When mining with GPUs, this number is much lower. On average, 0.5 to 2 Dogecoins can be mined per GPU daily. Thus, for miners preferring a steady income stream, it is essential to join a mining pool when mining with GPUs, as otherwise, it can take years until a solo miner solves a puzzle and receives a block reward.

IS DOGECOIN STILL EASY TO MINE?

Since 2014, Dogecoin can be merged-mined with other scrypt-based blockchains. Thus, its hash rate strongly depended on Litecoin miners for several years. This changed with the Dogecoin frenzy in early 2021, when the cryptocurrency became one of the most profitable to mine. Surprisingly, this attracted many new miners who wanted to profit from this opportunity. As a result, Dogecoin’s hash rate has increased enormously and even surpassed Litecoin.

Today, Dogecoin’s hash rate is approximately half of Ethereum’s. This led to the fact that CPU mining has become highly ineffective. Mining with GPUs is still possible and profitable. This could also change if Dogecoin’s hash rate increases in the future. ASIC mining machines will squeeze GPU miners out of the market by providing hash rates in larger quantities at a cheaper price.

In conclusion, we can summarize: YES, Dogecoin is accessible to mine, even with a CPU. But to mine Dogecoin profitably, miners need GPUs or, even better, ASICs.

Here are a few basic steps you need to follow:

Step 1: Purchase Mining Hardware

Acquire mining hardware or check if your CPU/GPU is suitable for mining. To most profitably mine Dogecoin, you need ASIC miners designed for scrypt-based algorithms. These can be purchased from official producers or resellers. It’s not unusual to encounter supply bottlenecks. We have provided links below to try and help you get started.

Step 2: Install Mining Software/Update Drivers

Download and install the respective software (CPU, GPU, or ASIC) necessary to run the ASIC or CPU/GPU miners and update your GPU driver if required. We are using HIVEOS and have provided a guide on how to mine DOGECoin with HIVEOS.

Step 3: Join a Mining Pool

Join a suitable mining pool by creating an account. Here you can view a list of the top 5 Dogecoin mining pools.

Step 4: Connect Your Devices to the Pool

Once you have an account with a mining pool, you must use this account to connect your mining machines to one of the mining pool’s servers. YouTube provides many tutorial videos on how to do this for each pool with both ASIC machines and GPUs/CPUs. Examples for GPU and ASIC.

Step 5: Set up a Dogecoin Wallet

To collect revenue from the block rewards, you must register your payout address with your pool account. If you don’t have a Dogecoin wallet, then now is the time to set up your wallet. Dogecoin offers official wallets, but many other wallets also provide Dogecoin storage. We prefer to use Coinbase as a lot of mining is done here and having a credit card/debit card gives easy access to our crypto.

Step 6: Start Mining

Once everything is set up, your mining pool’s account settings monitor your hash rate, revenue, and payout. Most mining pools provide you with a dashboard or even an app to keep track of your mining activities. Once you have mined some Dogecoin and received your block rewards, you can cash them out to your wallet via your mining pool account.