A mining pool is a collection of miners who pool their resources and share the rewards of mining a proof-of-work (PoW) cryptocurrency like Dogecoin (DOGE).
Individual miners receive a portion of block rewards in proportion to how much hashing power they contribute.
Miners may earn less overall when mining in a pool vs. solo mining, in which an individual tries to solve for a block on their own, using significant time and computing power. But they receive rewards on a more consistent basis and can maintain a profitable operation, even with smaller amounts of computing power.
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How Does Dogecoin Mining Work?
In order to understand Dogecoin mining and Dogecoin pool mining, it’s important to remember the qualities that distinguish DOGE among the other types of crypto.
What Is DOGE?
Dogecoin (pronounced dohj-coin), or DOGE, is widely known as the first joke cryptocurrency. It was launched in 2013 as a way to poke fun at Bitcoin. Nonetheless, the currency captured people’s attention and a fair amount of investment.
Dogecoin is an altcoin similar to Bitcoin and Ethereum in that it runs on a blockchain network using a PoW system. But the number of coins that can be mined are unlimited (versus the 21 million-coin cap on Bitcoin).
Despite its place as one of the biggest coins by market cap, DOGE trades at one of the lowest prices: $0.084 cents, as of November 18, 2022.
Understanding Dogecoin Mining
Dogecoin mining works in much the same way that mining any other PoW cryptocurrency works. Dogecoin is based off of Litecoin, which forked from the original Bitcoin source code.
The main difference between Bitcoin (BTC) and Dogecoin (DOGE) or Litecoin (LTC) is that the latter two are altcoins that use a mining algorithm known as Scrypt. Bitcoin mining, by contrast, uses an algorithm called SHA-256. Scrypt allows for faster block confirmation times, which means faster transaction times.
Here’s a quick guide to crypto basics and how the mining process works.
• A blockchain is a type of distributed ledger technology (DLT).
• Blockchain networks are the highways on which cryptocurrencies travel.
• The computers that maintain a blockchain network are called “nodes.”
• Some nodes can add new blocks of transactions to the network and gain rewards. These nodes are called “miners.”
• Miners solve complex mathematical problems to process transactions and achieve consensus on the network, ensuring everyone agrees which transactions are valid.
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Like gold mining, mining for crypto requires time and energy, whether you’re mining Bitcoin or an altcoin like Dogecoin or Litecoin. But unlike gold mining, computers do all the work in crypto mining. Individuals set up their mining rigs (powerful computer systems) and monitor the process. For some, mining cryptocurrency offers an opportunity to obtain cryptocurrency without buying it on an exchange.
How Do You Pool Mine Dogecoin (DOGE)?
To participate in a Dogecoin mining pool, you must have a crypto wallet that’s compatible with DOGE, and all the necessary hardware and software for mining.
Using a pool involves one extra step: telling the miners where to “point” their hashing power. This typically involves entering a single line of computer code into the mining software. The mining pool will provide the specific command, likely somewhere on its website or in the software itself.
Dogecoin Mining Equipment
Crypto mining requires sophisticated and powerful computers known as Application-Specific Integrated Circuits (ASICs). In the case of Dogecoin mining hardware, the ASIC must be specifically designed to run the Scrypt algorithm.
While there might be some pools that allow users to use SHA-256 ASICs, contribute that hashing power to the pool, and take rewards in DOGE, those interested in mining DOGE specifically should stick to Scrypt ASICs.
ASICs take so much electricity that even smaller miners usually require a special power supply to connect to an electrical outlet. They also generate considerable heat, and miners must keep them cool to prevent damage.
In addition to the ASICs and their power supplies, miners will need a laptop or desktop computer. Running the Dogecoin mining software can take a considerable amount of central processing unit (CPU) or graphic processing unit (GPU) power, so that computer probably won’t be able to do much else while the mining is happening.
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Pool Mining vs Solo Mining Dogecoin
Before you decide whether you want to pool mine or solo mine DOGE, you want to weigh the pros and cons.
The benefit of mining solo is that 100% of the block reward will go directly to you. But it could be weeks or months before you find a block because there is so much competition.
Most miners choose to join a mining pool. Pool miners receive rewards in proportion to the amount of hashing power they contribute. However, they also have to pay a small fee in exchange for using the pool.
|Pros and Cons of Pool Mining||Pros and Cons of Solo Mining|
|Doesn’t require as much computing power.||Requires a lot of computing power & energy.|
|Earn rewards proportional to your hashing power.||100% of the mining reward goes to you.|
|Easier to join a pool than find a block to mine.||Can be hard to find a block to mine.|
|Must pay pool mining fees, which eat into profits.||Overall costs of solo mining are quite high, which can eat into profits.|
Using a Pool to Mine Multiple Coins
Some mining pools mine multiple cryptocurrencies. This allows the pool to switch its mining activities should mining a different coin become more popular depending on the constantly changing variables of price and difficulty.
For example, some pools mine both Dogecoin and Litecoin since both rely on the same mining algorithm. If such a pool’s miners were focused on Dogecoin but the price of DOGE stagnates, it could become harder to mine DOGE due to difficulty increases, meaning reduced profits for miners absent a rise in DOGE. Then they could switch to Litecoin.
Dogecoin Cloud Mining
Mining via the cloud is another option, and you won’t need physical hardware or software. Cloud mining DOGE involves buying a contract for a certain amount of hashing power over a certain amount of time. Essentially, you’re renting computing power from someone else.
Be careful, there have been many cloud mining scams over the years.
How to Join a Dogecoin Mining Pool
Other than the above, most mining pools don’t have any special requirements for joining. They want to make it as easy as possible for new miners to contribute because they take a small fee from each block reward. The more miners in the pool, the more often the pool finds new blocks, and the more fees the pool will generate.
Mining pools often have instructions on their website that teach new miners how to join. It usually involves little more than entering a line of code into a mining program. Computers handle the rest.
Here is a rundown of the steps that an individual will take when joining a mining pool:
Step 1: Obtain the necessary hardware. As noted above, joining a mining pool may require less sophisticated equipment than solo mining.
Step 2: Select a Dogecoin mining pool to join (more in the next section).
Step 3: Download and install the software from the pool’s official site.
Step 4: Set up a DOGE crypto wallet and enter the address into the software (so the software knows where to send the new coins.
How to Find the Best Dogecoin Mining Pool
To choose the best Dogecoin mining pool for you, consider the following factors:
Fees and Costs
Because mining cryptocurrency comes with a significant investment of time and money, miners will want to choose a pool that earns them the greatest profit. That involves a pool with the lowest fees and most equitable reward structure. The biggest Dogecoin pool may or may not be the best, as there are other factors to consider.
For example, the Dogecoin mining pool power cost is also important to consider. Mining requires cheap electricity to be profitable, and for miners to make more money.
In addition, the mining pool itself will charge a fee, maybe 0.5% to 4% of the reward. You’ll want to compare the fees charged by different pools.
The reward for each block of transactions is 10,000 DOGE, and it’s split among the mining pool members, in proportion to the hashing power that member contributed to the mining pool. For that reason, computing power does matter when you join a mining pool.
The bigger the pool, the more consistent your rewards will be. So while you might be able to score 10,000 DOGE per month as a solo miner, you could earn the same amount in smaller chunks when you join a mining pool.
You want a pool with a high combined hashrate. That’s more important than the overall size of the pool. But the size of the pool is also an indicator of how trustworthy/secure it is.
The more hashing power you contribute, the bigger your share of the rewards will be. Hashing power is a function of computing power, so it’s something to consider as you invest in your rig, or cloud mining.
In theory, it may be smarter to join a pool with servers on the same continent, in terms of hash rate needed. Proximity to servers may enhance your rewards.
The security of the mining pool is obviously critical, and there are various aspects to consider. First, you want to ensure that the pool is transparent about its hashrate and payout structures. Does the pool have a real-time dashboard of activity that you can review?
Stability is also important. Does the pool have a lot of down time, which can impact your ability to mine as well as potential profits.
5 Popular Dogecoin Mining Pools
While there are many Dogecoin mining pools, some are more popular. Remember that the number of coins mined is correlated with the pool’s computing power. A larger pool may equal more computing power, but not necessarily. A smaller pool running more high-powered computers would outperform a larger pool with older networks.
One of the oldest mining pools, Aikapool doesn’t charge a fee and there are no withdrawal limits. The payout is PROP, or proportional to your hash rate.
The Prohashing pool is one of the largest pools and it’s notable for paying in DOGE, vs. converting rewards to BTC or LTC.
Multipool allows you to mine for more than one type of crypto at once, sometimes called merge mining. So you can mine DOGE and LTC, for example. Multipool charges a fee of about 0.25%.
1CoinPool has a transparent fee structure, and pays according to the PPS (proportional pay per share, where you get a fixed amount per work submitted). 1CoinPoll operates two mining pools – Litecoin and Dogecoin. Also, there are no fees for withdrawals. This means that the miners are rewarded proportionally as per the hashing power. Furthermore, the coins get automatically added to the wallet.
Litecoin also has a transparent reward system (PPS), and doesn’t charge fees, including no withdrawal fees.
Cryptocurrency mining is not an easy task, and won’t be profitable for most people most of the time. All the right variables must align for an individual to make money mining in most instances. Many take up mining as a hobby and as a way to build a small crypto portfolio while contributing to the livelihood of the network of a particular coin.
If you’re interested in building a crypto portfolio without getting involved in mining, opening a brokerage account on the SoFi Invest investment app is a great way to get started. SoFi members can trade crypto directly from the app, with the peace of mind of knowing that they’re keeping their holdings on a secure platform.
Can Dogecoin still be mined in 2022?
Yes. Despite the ongoing volatility in the crypto markets, mining for many types of crypto continues. There are both solo Dogecoin miners and pool miners still active today.
How long does mining 1 Dogecoin take?
You can’t really mine 1 DOGE, because the rewards for mining a block is 10,000 DOGE. Given that it takes about a minute to mine a block of Dogecoin, depending on your equipment and the size of your mining pool, that’s roughly what it would take to obtain 1 DOGE.
How much Dogecoin could you mine in just 1 day?
Again, it depends on the number of blocks you have access to — either as a solo miner or as a pool miner — and how much hashing power you have. The supply of DOGE is unlimited, but you can only earn 10,000 DOGE per block of transactions that are confirmed.
Photo credit: iStock/Thirawatana Phaisalratana
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