Dogecoin Price Surges, Allowing Holders to Profit
Dogecoin (DOGE) has experienced a significant price rally, with double-digit percentage gains in the last 24 hours. As a result, over 70% of DOGE holders are now enjoying profits. This surge has sparked excitement within the cryptocurrency community, leading many investors to explore how to mine Dogecoin and capitalize on these gains.
Understanding Dogecoin Mining and Merged Mining
Dogecoin utilizes the same mining algorithm as Litecoin (LTC), known as Scrypt. This allows for merged mining between the two cryptocurrencies. Merged mining involves providing proof-of-work to a specialized mining pool and receiving both DOGE and LTC as rewards based on the hashrate produced.
Will DOGE Reach $0.1?
Currently trading at $0.96 per coin, DOGE has seen an 8% increase in value in just one day. The recent price action indicates a breakout from a downtrend in its daily chart, with consistent testing of the 50-day exponential moving average (EMA) support triggering a pump. With this strong momentum, DOGE may aim for local highs at the psychological resistance level of $0.1.
According to IntoTheBlock data, approximately 71% of all Dogecoin holders are currently sitting on unrealized profits. This means that these holders acquired DOGE at lower prices than its current level.
How to Mine Dogecoin Using Mining Pools and Scrypt ASIC
In the early days, individuals could mine Dogecoin using gaming GPUs from their homes and profit from it. However, as the network grew and mining difficulty increased, it became more challenging to mine profitably. Merged mining emerged as an additional incentive to enhance the security of Scrypt-based mining cryptocurrencies, such as Litecoin.
Mining DOGE with a GPU is no longer considered profitable due to infrastructure and energy costs. To mine Dogecoin profitably, it is necessary to use Scrypt ASICs, which are specifically designed for this algorithm. Additionally, most miners prefer to connect to a mining pool, which gathers hashrate from multiple workers and distributes payments based on the agreed payment model.
If you’re interested in mining Dogecoin, here are the steps you need to follow:
- Buy a Scrypt ASIC for mining;
- Connect the ASIC to a power source, computer, and Ethernet cable;
- Set up private Dogecoin and Litecoin wallets to receive rewards;
- Choose a mining pool based on fees, payment models, and personal preferences;
- Provide the required information and follow the steps outlined by the mining pool;
- Start mining Dogecoin.
What Happens When Mining Dogecoin with Large Pools?
Many miners opt to join large pools to increase their chances of finding valid blocks. However, this choice comes with a trade-off: individual rewards per block mined may decrease. Despite this, mining with large pools offers higher predictability and stability in payments. By increasing their chances of finding blocks while decreasing their hashrate share, miners can mitigate some of the inherent unpredictability associated with mining.
It’s worth noting that joining large pools can reduce network decentralization and compromise security. Currently, the four largest pools control nearly 60% of the entire hashrate. While this level of control is undesirable for a proof-of-work system, it is still higher than Bitcoin’s two controlling pools with a similar network share, as reported by MiningPoolStats.
Mining Scrypt cryptocurrencies like Dogecoin involves risks, benefits, and trade-offs. Aspiring miners should conduct thorough research and understand the intricacies of mining before investing their time and money into it.
Hot Take: Considerations for Mining Dogecoin
Mining Dogecoin can be an exciting venture, especially during periods of price surges. However, it’s important to approach mining with careful consideration. Here are some key points to keep in mind:
- Merged mining allows for simultaneous mining of Dogecoin and Litecoin, providing dual rewards.
- DOGE’s recent price rally has led to significant profits for holders, but future price movements are uncertain.
- Using Scrypt ASICs is necessary for profitable Dogecoin mining, as GPU mining is no longer viable.
- Joining large mining pools can increase predictability and stability in payments but may reduce network decentralization.
- Thorough research and understanding of the mining process are essential before investing time and money into mining Dogecoin.
By considering these factors and staying informed about market trends, you can make informed decisions when it comes to mining Dogecoin and potentially capitalize on its price movements.
Fin Boldom has emerged as a notable crypto analyst, accomplished researcher, and adept editor, leaving a distinct mark in the field of cryptocurrency. As a skilled crypto analyst and researcher, Fin’s insights delve deep into the complexities of digital assets, resonating with a diverse audience. His analytical acumen is seamlessly complemented by his editorial finesse, enabling him to distill intricate crypto information into easily comprehensible content. Fin’s contributions serve as a valuable guidepost for both seasoned enthusiasts and newcomers, navigating the dynamic terrain of cryptocurrencies with well-researched perspectives. With meticulous attention to accuracy, he empowers informed decision-making within the ever-evolving crypto domain.
