As fascinating as Dogecoin is and going by its history, the meme-based cryptocurrency is here to stay, as stated by Cointelegraph. Investors have increased their attention for investing in Dogecoin. Much like cryptocurrencies, mining plays a role in helping the network function.
According to Cointelegraph, after Dogecoin’s establishment in 2013, it has now become an established cryptocurrency through the amount of people who are investing in it. While Dogecoin shares characteristics with other cryptocurrencies, it carries some differences when compared to Bitcoin. For instance, Bitcoin and Dogecoin both have a blockchain and use cryptography to create blocks and verify transactions, but Bitcoin uses SHA-256 as it hash algorithm and Dogecoin uses Scrypt.
Based on data by Contelegraph, cryptocurrency mining is considered the method for minting new cryptocurrency tokens. Computing power plays an important role in this as more power one has, more chances there are for being the first miner to solve the block and receive the reward. Since its correlation with Litecoin, Dogecoin uses proof-of-work (PoW) mining which allows users to earn Dogecoin by mining other coins that run their mining network on the Scrypt algorithm. Users also get the facility to do solo mining and pool mining. Through solo mining, one can mine on their own, and won’t have to share any of the rewards. With pool mining, computing resources of different entities are kept together to solve blocks and earn coins. While a user needs to share rewards in this case, it lowers the cost and makes Dogecoin mining possible for people.
Information from Cointelegrah showed that beginners should opt to choose pool mining because of its low entry fee, as it is difficult to earn money through being a solo miner. Users need to have a Dogecoin wallet for coins to be stored. One can also get hardware and software wallets. Dogecoin mining can be done through a central processing unit (CPU) based computer but its energy consumption will eat up profits. Serious miners would need an application-specific integrated circuit (ASIC) which caters to the specifications of mining, but will be available for higher costs.
(With insights from Cointelegraph)