Dogecoin - for the purpose of fair distribution. Once you find a new block, you receive a small reward (in Dogecoin currency) for the time spent mining. Think of these block as a treasure chest but full of Dogecoin.

 

You can mine alone, or in a pool of people. Mining alone can be a bit hard so most people suggest joining a pool. When you join a pool, everyone in that pool mines together with their seperate computers. Depending on how fast your hardware is and how many computers you have set up mining, you will be able to mine more shares. Once the group finds a new block, there is a reward for everyone.

 

Right now the reward is set to anywhere between $0-$1,000,000 Dogecoin per block found. When you find a new block, that money gets distributed between your pool based on how many shares you mined. 

 

So if my computer is slower than others, my share will be smaller than what someone with a faster computer may get.

 

The more people that join the Dogecoin community the more the difficulty level to mine will get. Which means the reward for finding a new block will decrease. Since there is a cap on Dogecoin set at 21 Billion, they raise the difficulty so that it does not all get mined right away. This is how they regulate the coins being distributed.

 

On Feb 14th, 2014 - the Dogecoin reward will go from $0-$1,000,000 Dogecoin to $0-$500,000, that's half the reward we are currently getting.

 

Keep in mind that, the more people that mine and are involved in the Dogecoin network, the more the currency will rise. We want to go to the moon! So if you're not mining get to it.

 

Like, the video states, people used to mine with CPU but found that GPU's (graphics cards) were able to mine faster. The only drawback of this is that they consume a lot of power and electricity. So once the difficulty gets harder with Dogecoin the harder it will be to justify mining.

 

Right now, is the perfect time to mine Dogecoin, even after the difficulty goes up, it will still be profitable to do so and overall healthy for the Dogecoin network.

 

As an example, Bitcoin now takes about $10,000 in electricity mining to find 1 block and that block contains 25 coins. It's up to you what you feel is justified tho. Dogecoin is 2 months old, so still very ripe for success. it will be a while before we get to that kind of difficulty. The time is now.

 

A great way to calculate all your costs is this handy Dogecoin Mining Calculator on Coinwarz.com site. It gives you the exact profit you will make after computer costs, eletricty, and pool fees. Check it out and join in the Dogecoin community today. 

 

Above is a really cool video explaining mining and how it works. It's based on Bitcoin, but it explains it perfectly and mostly applies to Dogecoin too, except for the special hardware part, you don't need that to mine Dogecoin. 

 

Dogecoin is a Scrypt currency so it does not require special hardware like Bitcoin does. You can start mining with your current computer. Or, if you want extra mining power, set up a custom rig just for mining doge. 

 

What is great about setting up a Dogecoin rig, is that you can mine all kinds of scrypt currencies as well. But this site is about Dogecoin, so we'll keep it at that. ;)

 

You ready to get mining some Doge?

 

Check out our Getting Started Mining Guide.