Launched in the year 2013 as a fun coin, Dogecoin has continued to survive in the world of cryptocurrencies and is today ranked among the top 50 cryptocurrency coins.
With a market capitalisation of over $300 million in 2018, Dogecoin is ranked 27 in the list of cryptocurrencies with the highest market cap (or the most number of coins in circulation).
In addition to investing and trading in this digital currency, you can also perform Dogecoin mining and store the received coins in your Dogecoin wallet. Read on for a complete beginner’s guide on how you can mine for Dogecoin.
As a peer-to-peer digital currency, cryptocurrencies such as Bitcoin and Dogecoin allow money transfer between individuals without the use of any bank transaction. Each of these digital transactions is recorded on a database technology called blockchain, which is distributed across a large network of computers called as nodes. Every transaction needs to be confirmed by every node in the network before being added to the blockchain database. Typically, this system works by Internet users performing the task of confirming each transaction using their connected computer and being awarded new cryptocurrency coins for their efforts. This is referred to as the process of cryptocurrency mining.
In simple terms, Dogecoin mining is the process of checking Dogecoin transactions on its native blockchain and being awarded new Dogecoins. So, why should you mine for Dogecoin instead of other popular cryptocurrencies such as Bitcoin and XVG coin? The reason is very simple – Dogecoin has a higher supply of coins with lower transaction costs, as compared to Bitcoin and any other cryptocurrency.
Dogecoin mining is also different from other coin mining in the following aspects:
Dogecoin uses the Script mining algorithm, which requires less computing power and is much faster as compared to the SHA-256 algorithm used by Bitcoin.
The average block time (or the time required to verify each transaction and add to the blockchain database) for Dogecoin is lower at 1 minute, as compared to 2.5 minutes for Litecoin and 10 minutes for Bitcoin.
Difficulty numbers are used to estimate your probability of winning the cryptocurrency mining lottery and being awarded new coins. Typically, this is determined by the number of other miners who are mining the same digital currency. With a difficulty number of 2713482.2088, Dogecoin is 1 million times less difficult than Bitcoin mining.
This is used to indicate the amount of new digital currency coins that miners are likely to awarded with for each block of transactions. With an average block reward of 10,000 coins for Dogecoin miners valued at $27.26, Dogecoin has a higher reward number than that for Bitcoin (12.5 coins valued at $86,391) and Litecoin (25 coins valued at $3027).
Also Read: How to buy Dogecoin
You can either mine for Dogecoins either by solo means or through a mining pool comprising of a group of miners mining for the same cryptocurrency. This article outlined some basic information for the benefit of beginners interested in Dogecoin mining.
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