Dogecoin mining profits +700% in 2021, transaction fees +6,700%

The year 2021 turned into a fantastic year for Dogecoin, as the meme-inspired cryptocurrency reached record valuation and became one of the top ten cryptos by market cap.

However, besides bringing sizeable investment returns, Dogecoin’s mining profitability also surged in 2021, according to data presented by BlockArabia.com, soaring 700% since the beginning of this year.

Dogecoin came a long way since its modest beginnings in 2013. The digital coin created as a meme-inspired joke became the ninth-largest cryptocurrency globally, boasting a $31 bln market cap and a global fanbase. Its incredible growth over the last nine months has also attracted a record number of miners to its network.

Dogecoin’s blockchain network employs the same system to add new blocks to its decentralised ledger and reach agreement among its network participants as Bitcoin, Litecoin and many other cryptos.

During the mining, a computer is trying to solve complicated logic puzzles to verify transactions in the blockchain. When this process is completed, the miners receive 10,000 DOGE coins per block as a reward.

PCs with more computing power, or hashrate, are likely to solve more puzzles and mine more cryptocurrencies. But the profitability of the entire process also depends on electricity consumption, transaction fees, and hardware efficiency.

Although still significantly less competitive than mining Bitcoin, Dogecoin mining became increasingly profitable in 2021, reaching a six-year high.

According to the BitInfoCharts data, mining a single Dogecoin returned a profit of 0.19 US cents in January. By the end of June, this figure jumped to 1.6 cents. Despite falling to 1.51 cents last month, Dogecoin mining profitability still surged by nearly 700% since the beginning of the year.

The BitInfoCharts data showed that transaction fees for Dogecoin mining also hit record heights this year.