Is Dogecoin Mining Still Profitable?

Is It Worth Mining Dogecoin in 2022?

Last Updated January 6th 2022

18 Min Read

In this article, Trading Education will provide detailed information that will guide you in your quest towards earning passive income from mining Dogecoin.

Dogecoin Mining is the process of earning Dogecoins (DOGE) in exchange for contributing to the verification process that helps in the validation of transactions on the Dogecoin protocol. Transaction validation and verification play an invaluable role in securing the Dogecoin protocol.

This is the primary reason why miners are compensated with several DOGE tokens because of their role in guaranteeing the safety of the entire Dogecoin Network.

Although mining has improved the standard of living of millions of people, it is not a golden ticket towards enormous riches.

As several people who felt they had found a new golden goose in the cryptocurrency world found out, Dogecoin can only become profitable to mine if the price of DOGE exceeds the costs of mining.

As mining became a profitable venture that saw millions of people receive millions of coins, individuals and organizations joined the crypto mining space.

In addition to this, software developers created new applications for the mining of Dogecoin and other proof-of-work (POW) powered coins that came with advanced technologies as well as huge computing power.

The resultant effect of this is the difficulty of making a high number of coins from Dogecoin mining. This is the primary reason why questions such as is Dogecoin profitable to mine, is Dogecoin mining profitable in 2022, and is Dogecoin mining hard continue to trend on Google, Yahoo, Bing, and Safari.

As a beginner of cryptocurrency mining, you should know that the profitability of Dogecoin mining depends on several factors. According to Statista, a miner can make money through mining depending on costs such as electricity consumption during the mining process, transaction fees, as well as the efficiency of the hardware used in mining. To put it simply, factors such as costs of electricity, the availability and price of a computer system, and the difficulties involved in providing mining services are essential in making DOGE mining profitable.

The DIFFICULTY in mining comes into play through the assessment of the measurement of the hashes per second of the Dogecoin validation transaction.

Hashrates measure the rate of solving problems. Thus, it measures the computational power per second used in the process of mining. Mining hashrate is a key security metric. The more hashing (computing) power in the network, the greater it's security and overall resistance to attack.

In addition to this, hashrate is the speed of mining. Machines with a high hash (computing) power are highly efficient and as a result process lots of data within seconds.

When more Dogecoin miners enter the process of validation due to different computers competing for high hash power, the difficulty level changes.

This is because the Dogecoin Protocol was designed to produce a certain number of DOGE tokens as a reward per block.

At the time of writing, the average time between blocks was 1 minute 3 seconds, and rewards per block were 10,000+30.62 DOGE which totaled $1,574.81.

The difficulty level increases as more miners enter the market. This is to ensure that the level of validation does not change but continues to remain STATIC.

The last factor for determining the probability of making profits is the price of Dogecoin (DOGE) in comparison to fiat currencies such as the United States Dollars, the Great Britain Pound, Indian Rupee, or Japanese Yen.

Key Takeaways

Dogecoin can be mined using computing rigs. These hardware companies are very expensive. Dogecoins can also be mined via mining pools. All a miner needs is a personal computer with minimum Video Random Access Memory (VRAM) of 3 gigabytes (3GB).
Miners are compensated with Dogecoins (DOGE) as a reward for contributing to the verification of blocks of transactions on the Dogecoin Protocol.
As more miners compete for DOGE rewards, there is difficulty in the process of solving puzzles.
To determine whether Dogecoin mining is or isn’t profitable for you, you must consider the costs of equipment and electricity, the difficulty associated with the mining, and as well how the price of Dogecoin (DOGE) will impact potential rewards.

The Components Of Dogecoin Mining

Before the mining of the first crypto Bitcoin (BTC) was carried out through advanced technology (software) in 2013, personal computers were the primary way of mining cryptocurrencies. Unfortunately, the introduction of Application-Specific Integrated Circuit (ASIC) Miners around the same time frame surpassed both Central Processing Units (CPUs) and Graphic Processing Units (GPUs) in terms of electricity and computing capacity.

One of the main components of ASIC was CHIPS. This component offered up to one hundred (100) billion times the capability of personal computers, rendering those systems ineffective and obsolete when it comes to mining proof-of-work (POW) blockchain-backed cryptocurrencies such as Dogecoin (DOGE).

Despite the introduction of ASICs, individual miners without huge sums of money to splash on high specifications computer equipment can still mine with their older hardware, although there are several question marks around profitability.

It will be difficult for a miner with obsolete hardware to make profits due to the following reason. First and foremost, hash problems must be solved as quickly as possible before miners can earn rewards.

Unfortunately, since ASIC miners employ computers with highly efficient, high computing power and process lots of data within seconds, they have a 90% chance of solving problems first and earning DOGE rewards.

This leaves obsolete equipment miners with huge electricity costs and no rewards to compensate for the expenses incurred.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Mining With Available Equipment

Not having funds to buy application-specific integrated circuits mining rigs does not mean you cannot enjoy the fruits of Dogecoin (DOGE) mining. Thanks to the advancement in technology that has created mining pools, you can share computing power as well as electricity costs with others and see DOGE rewards daily.

Using the Central Processing Unit (CPU) and Graphic Processing Unit (GPU) of your personal computer (desktop or laptop), you can mine Dogecoin (DOGE) on UNMINEABLE.

This is a website that is dedicated to helping people without personal computers that come with high-energy components make passive income through mining.

You can mine Dogecoin (DOGE) using Ethash, Etchash, Kawpow, and RandomX.

Ethash makes it possible for you to mine DOGE via Graphic Cards. The minimum Video Random Access Memory (VRAM) required is 6GB. The average time between rewards is 6 minutes, the standard mining fee is 1%, and payments are from 30 DOGE.

Etchash also makes it possible for you to mine DOGE through Graphic Cards. The minimum Video Random Access Memory (VRAM) required is 3GB. The average time between rewards is 5 minutes, the standard mining fee is 1%, and payments are from 30 DOGE.

Kawpow also uses Graphic Cards to mine Dogecoin (DOGE). Like Etchash, you need a minimum Video Random Access Memory (VRAM) of 3GB. The average time between rewards is 2 minutes, the standard mining fee is 1%, and payments are from 30 DOGE.

Random X unlike Kawpow, Etchash, and Ethash employ a Central Processing Unit (CPU) to mine Dogecoin. The average time between rewards is 6 minutes, the standard mining fee is 1%, and payments are from 30 DOGE.

Read Also: Cryptocurrency Mining Explained

Profitability Before And After ASIC

In 2011, 2012, and 2013, it was relatively easy to mine POW blockchain-based cryptocurrencies such as Dogecoin, Bitcoin, and Litecoin since personal computers were used.

As a result, pioneers of cryptocurrency mining were able to earn huge rewards.

Aside from the availability of personal computers, millions of people saw the advent of digital currencies destabilizing the well-structured centralized financial systems as a joke. Therefore, many potential miners played off the idea of making huge profits just by aiding in the verification and validation of blocks and transactions.

Crypto mining was profitable because of the costs of personal computers as well as the low rate of electricity consumed by these systems.

After the introduction of ASIC miners in 2013, many people began to overlook investing in the volatile nature of cryptocurrencies as a way of making gains. Instead, they focused on a secured way of earning consistent passive income (DOGE rewards) through the investment of ASIC computers so that they can contribute extensively to the validation and verification of digital currency transactions.

Without any warning signs, individual miners found themselves competing with established and up-and-coming crypto mining companies that possessed powerful mining rigs.

For the individual miner, the trajectory started to change in favour of ASIC miners since they couldn’t cope with the difficulty involved in mining continuously, couldn’t afford to fork out huge sums of dollars to purchase the right mining equipment, and more importantly, couldn’t deal with the high electricity costs that emanate from owning such high-energy intensive systems.

The Difficulty Of Mining Dogecoin

To maintain a stable production of verified blocks for the Dogecoin blockchain (thus, DOGE introduced into the circulating supply), the difficulty level associated with the mining of Dogecoin continues to change periodically.

The higher the difficulty rate, the higher the computation power needed to solve hash problems.

As earlier pointed out, the individual miner with an obsolete and inefficient system will find it difficult to solve problems and earn DOGE since the capacity of their personal computers is nowhere near the processing speeds of ASIC miners.

Dogecoin's success as a meme-inspired cryptocurrency has led to a demand in joke currencies by millions of traders and investors.

The main rival of DOGE is Shiba Inu (SHIB).

As of October 2021, SHIB (884,400%) had surpassed DOGE (15,657.3%) in terms of returns from January to date.

This has led to an increase in the demand for DOGE all over again with several traders and investors asking the question, can Dogecoin reach $1?

This increased demand has also increased the number of people involved in Dogecoin mining.

Due to the structure of cryptocurrency mining, once the number of miners increases, the difficulty level in mining DOGE has also soared to new levels.

When Dogecoin's first block was created on 12th August 2013, the difficulty level was 0. As of Friday, 29th October 2021, there are 4.918 million difficulties associated with Dogecoin mining. This is even a reduction on the more than 6 million difficulties DOGE mining was associated with in the early days of 2020.

This should give you an idea of the difficulty level of mining Dogecoin as demand for the cryptocurrency and meme-inspired digital currencies continue to soar to new highs.

Shifting Rewards

Dogecoin (DOGE), unlike parent crypto Bitcoin (BTC) or Litecoin (LTC) (which it was modelled after due to its use of SCRYPT technology in processing transactions), does NOT have a maximum supply cap. Founders Jackson Palmer and Billy Markus decided to make the coin inflationary by adding 5billion coins to the already existing circulating supply of 132.67B DOGE on the market annually.

This means that the number of coins available for mining will keep increasing. This does not mean that the difficulty level in mining DOGE is going to decrease significantly in the future.

One of the ways of controlling the introduction of new Dogecoins into circulation is to decrease rewards as the number of miners increase. To help you understand shifting rewards, follow the scenario below.

As per data retrieved from BitInfoCharts, mining profitability for DOGE stood at $0.026 per day for 1 MHash/s in January 2021. By the end of July 2021, the mining profitability for DOGE dropped to $0.017 per day for 1 MHash/s, and as of 29th October 2021, the mining profitability for DOGE stood at $0.0116 per day for 1 MHash/s. This means that rewards have dropped by as much as 55.3846% throughout last year.

Several years ago, millions of individual miners received millions of Dogecoins as rewards. The advancement of technology has brought about a sharing of computational power in the form of mining pools. This has contributed to the relatively less number of Dogecoins received by all miners.

With that said, if you decide to join mining pools through the UNMINEABLE software to mine DOGE, there is a great chance that you will see great rewards.

Specifically, you are going to receive 30 DOGE if you use any of Ethash, Etchash, Kawpow, or Random X. This does not mean that the “30 DOGE” payout will stay the same for 2022 and beyond.

The difficulty level will continue to increase due to high energy consumption and in turn, lead to low DOGE rewards.

Check Out: How To Make (Or Lose) Money With Dogecoin

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Profitability In Today’s Environment

Despite the requirements needed to mine Dogecoin efficiently, many miners continue to see awesome rewards mining the first-mover of meme-inspired currencies.

Thanks to the introduction of software such as UNMINEABLE and others, you can share losses and rewards with others through mining pools. Standard mining fees are at best 1% and at worst 10% (this does not take much from the rewards).

Joining mining pools doesn’t mean you should be content with the capabilities of your personal computer. To stay competitive and relevant in the mining pool, you should continuously upgrade your computer with modern graphic interfaces so that you will continue to enjoy maximum DOGE rewards.

Many people felt their personal computers could survive the load of DOGE mining only to find out that group members earn more rewards due to upgrading their systems (do not take your eyes off this).

One of the areas you should prioritize as a prospective miner is a cost-benefit analysis. According to Tim Stobierski, “Cost-Benefit Analysis is the process of comparing the projected or estimated costs and benefits (or opportunities) associated with a project decision to determine whether it makes sense from a business perspective.”

In the long term, you will get to know the financial metrics such as the break-even price and potential profits that could be attained before getting into Dogecoin mining or mining of any cryptocurrency as a whole.

The variables needed to help you make a cost-benefit analysis are the value of Dogecoin (DOGE), efficiency, time, and cost of power.

Dogecoin Value: What is the value of Dogecoin (DOGE) in United States Dollar (USD), the Great Britain Pound (GBP), Euro (EUR), or any fiat currency of your choice?

Time: How many seconds, minutes, hours, days, weeks, months, or years are you willing to invest in mining Dogecoin?

This can be calculated based on the continuous existence of the software you use in mining, for example, UNMINEABLE.

In the long term, factoring this out will be highly invaluable in helping you determine potential profits.

Efficiency: What are the components of your personal computer? More importantly, how much power does your personal computer or ASIC miner consume?

You can calculate this in watts by multiplying joules per coulomb (V) multiplied by (×) coulomb per second (A).

Cost of Power: You should always ask the question, what is my electricity rate at the end of the month?

Do not go online and read articles about electricity rates and use them as a standard to measure yours. This is because rates in Africa are different from Europe and electricity costs in America are not the same as in Arabia. What’s more, the costs of electricity in Asia differ greatly from that of Australia. To make it easy for you, check the kilowatt per hour (K/hr) on your bill to get to know how much you are consuming.

You can use CryptoCompare to calculate your level of Dogecoin Profitability.

Don't Miss: What Are The Safest Ways To Store Dogecoins (DOGE)?

Mining Profitability

Aside from using this website, you can do a thorough mathematical calculation of potential profits by considering the number of DOGE made every day, every month, and every year.

After that, you multiply the total number of potential coins by the average price that could be written next to DOGE by the end of the year. The final step is to subtract electricity costs from the worth of DOGE mining.

Let us consider the example below.

Using UNMINEABLE, you get 30 DOGE as a minimum payout daily.

If you decide to mine Dogecoin every day for a month, you’d receive (30 DOGE × 30 days) which equals 900 DOGE.

At $0.2879, your total income from the mining will be $259.11. Therefore if you pay an electricity rate of $50 monthly, your profits will be,

Dogecoin Profitability = (Total Mining Income - Costs of Electricity)

Profitability = $259.11 - $50, and this equals $209.11.

Although this amount is not much, it adds up to $2,509.32 over 12 months. It would be great to become an individual miner so that you can reap huge rewards from DOGE mining. But considering the costs of ASIC miners, you are better off joining a mining pool so that you can complete hash problems first, earn first place rewards, and more importantly, share risks with others.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

So, Is Dogecoin Mining Still Profitable?

To provide a perfect answer to the question is Dogecoin mining still profitable, you have to run a cost-benefit analysis with all the factors in consideration or with a web-based probability calculator.

Also, you should factor into account capital for hardware and software packages that can bolster the performance of your personal computer so that you can stay competitive.

After that, you have to consider the difficulty level in mining Dogecoins as well as the potential value of Dogecoin in the future.

Once the difficulty level goes down, this is a sign that many miners have left Dogecoin for the rewards of other coins such as Shiba and others.

A relatively low difficulty level makes it easy for you to earn more DOGE rewards which can sum up to a great sum at the end of a given period.

On other hand, once the difficulty level of mining DOGE goes up, you should know there would be little rewards in DOGE, thereby making the mining of Dogecoin highly unprofitable.

Joining a Dogecoin Mining Pool has been profitable for thousands; Dogecoin mining may become profitable for you too.