Bizarre teaser for Bitcoin parody Dogecoin
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Crypto mining has been the go-to process to obtain BTC for many years, even among people only looking to dip their toes into the world of cryptocurrency. But mining Bitcoin on your computer rig alone is now virtually impossible, due to the increasingly complicated and power-hungry computations involve. Instead, crypto enthusiasts are looking towards lesser-known altcoins, such as Dogecoin, to get a taste of the market.
Early adopters of the DOGE token have been over the Moon this month.
Starting in February, Dogecoin prices have been trending upwards thanks to glowing endorsements from the likes of South African billionaire Elon Musk.
After eight years of trading for fractions of a penny, the token is now exchanging hands for £0.214535 ($0.297120), according to Coindesk data at 6.23pm BST.
And though DOGE’s record-breaking rally has withdrawn somewhat in the past few days, the token is still nearly 6,000 percent up on where it was last year.
Can you mine Dogecoin tokens?
In the early days of Bitcoin, mining cryptocurrencies was a fairly easy affair that did not require powerful computers.
Bitcoin miners would receive a reward for breaking down complicated mathematical formulas in exchange for BTC rewards.
The process ensured Bitcoin were entering into circulation on the blockchain, helping maintain the technology.
But there is a limit to the number of Bitcoin that can be mined that is hardwired into the crypto token’s code.
Consequently, the rewards for mining Bitcoin are halved every four years and the process gets harder and harder.
For example, breaking down one block in 2009 yielded a reward of 50 BTC.
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And in May 2020, the reward was only 6.25 BTC.
Mining is also best done using powerful computer rigs that use top-of-the shelf graphics processing units (GPUs) or dedicated application-specific integrated circuit 9ASIC) rigs.
In other words, mining BTC tokens from your desktop at home is likely no longer a possibility.
But what about Dogecoin? Unlike Bitcoin, DOGE is inflationary, meaning there is no limit to how many tokens there can be.
The decision to make DOGE inflationary was meant to incentivise mining – because you can mine DOGE.
However, just like with Bitcoin, mining DOGE requires a lot of computer power and can take a heavy toll on your internet and electricity bill.
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DOGE miners have the choice of going at it alone or through so-called miner pools.
The latter is much more efficient but the rewards are split evenly between the pool.
This is typically done through a dedicated mining rig with a number of daisy-chained GPUs configured in an optimal way.
There are mining rigs you can purchase off the internet but these come with a hefty price.
Another thing worth mentioning is Dogecoin merged with Litecoin in 2014.
In other words, it is possible to mine both tokens in the same process.
Another, more risky option, is mining DOGE through cloud mining.
Rather than buy an expensive mining rig to assemble at home, some businesses allow you to rent rigs to mine on your behalf.
In all these cases, you need to consider the costs and risks involved.
It is also worth remembering there is no guarantee you can make a profit in mining or trading cryptocurrencies.
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