Heads Up: The Fed continues to raise rates — up 3% this year — making credit card debt even costlier.
Pay it off today with a low fixed-rate personal loan. View your rate —>

What is a Dogecoin Mining Pool?

By Brian Nibley · September 21, 2021 · 5 minute read

We’re here to help! First and foremost, SoFi Learn strives to be a beneficial resource to you as you navigate your financial journey. Read more We develop content that covers a variety of financial topics. Sometimes, that content may include information about products, features, or services that SoFi does not provide. We aim to break down complicated concepts, loop you in on the latest trends, and keep you up-to-date on the stuff you can use to help get your money right. Read less

What is a Dogecoin Mining Pool?

While Dogecoin may have its origins as a joke currency, but the process of mining it is very real. A mining pool is one way of mining a proof-of-work (PoW) cryptocurrency like Dogecoin. (The other way is solo mining in which an individual tries to solve for a block on their own, using significant time and computing power.)

A mining pool is a collection of miners who pool their resources and share the rewards. Individual miners receive a portion of block rewards in proportion to how much hashing power they contributed.

Miners may earn less overall when mining in a pool. But they receive rewards on a more consistent basis and can maintain a profitable operation even with smaller amounts of computing power.

Recommended: Is Crypto Mining Still Profitable in 2021?

Before moving on to the subject of Dogecoin mining pools, let’s take a quick look at how Dogecoin mining works:

How Does Dogecoin Mining Work?

Dogecoin mining works in much the same way that mining any other proof-of-work 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, simplified rundown on 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. 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.

Like gold mining, mining for crypto requires time and energy, whether you’re mining Bitcoin or an altcoin like Dogecoin. But unlike gold mining, computers do all the work in crypto mining. Individuals only have to set everything up and monitor the process. For some, mining cryptocurrency offers an opportunity to obtain cryptocurrency without buying it on an exchange.

Recommended: How Does Bitcoin Mining Work?

How Do You Mine Pool Dogecoin?

To participate in a Dogecoin mining pool, you must have all the necessary hardware and software listed below.

Using a pool only 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.

Recommended: What Is a Bitcoin Mining Pool? Should You Join One?

Up to $100 in bitcoin2 – just for you.

With 30 coins available, our app offers a secure way to trade crypto 24/7.

How to Join a Dogecoin Mining Pool

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:

• Selecting a Dogecoin mining pool to join (more on this in the next section).

• Downloading and installing the software from the pool’s official site.

• Creating a DOGE wallet and entering the address into the software (so the software knows where to send the new coins.

• Obtaining the necessary hardware.

• Using a mining profitability calculator to estimate how profitable mining might be, based on variables such as electricity costs, hashing power, and mining difficulty.

• Each of these steps involves its own set of issues that need to be addressed.

How to Find the Best Dogecoin Mining Pool

To choose the best Dogecoin mining pool for you, consider the following factors:

• The fees charged by the pool.

• How the pool calculates and distributes rewards.

• The location of main servers.

• The total hashing power of the pool.

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.

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.

The Dogecoin mining pool power cost is also important to consider. Mining requires cheap electricity to be profitable. Many people turn to renewable energy sources like solar power for this reason, which also benefits the environment.

The Takeaway

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.

Photo credit: iStock/Thirawatana Phaisalratana

SoFi Invest®
The information provided is not meant to provide investment or financial advice. Also, past performance is no guarantee of future results.
Investment decisions should be based on an individual’s specific financial needs, goals, and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC . SoFi Invest refers to the three investment and trading platforms operated by Social Finance, Inc. and its affiliates (described below). Individual customer accounts may be subject to the terms applicable to one or more of the platforms below.
1) Automated Investing—The Automated Investing platform is owned by SoFi Wealth LLC, an SEC registered investment advisor (“Sofi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC, an affiliated SEC registered broker dealer and member FINRA/SIPC, (“Sofi Securities).
2) Active Investing—The Active Investing platform is owned by SoFi Securities LLC. Clearing and custody of all securities are provided by APEX Clearing Corporation.
3) Cryptocurrency is offered by SoFi Digital Assets, LLC, a FinCEN registered Money Service Business.
For additional disclosures related to the SoFi Invest platforms described above, including state licensure of Sofi Digital Assets, LLC, please visit www.sofi.com/legal. Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform. Information related to lending products contained herein should not be construed as an offer or prequalification for any loan product offered by SoFi Bank, N.A.
Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

2 Terms and conditions apply. Earn a bonus (as described below) when you open a new SoFi Digital Assets LLC account and buy at least $50 worth of any cryptocurrency within 7 days. The offer only applies to new crypto accounts, is limited to one per person, and expires on December 31, 2022. Once conditions are met and the account is opened, you will receive your bonus within 7 days. SoFi reserves the right to change or terminate the offer at any time without notice.

First Trade Amount Bonus Payout
Low High
$50 $99.99 $10
$100 $499.99 $15
$500 $4,999.99 $50
$5,000+ $100

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store
SoFi Android App, Get it on Google Play

TLS 1.2 Encrypted
Equal Housing Lender