Dogecoin mining heats up as small businesses cash in

Dogecoin mining is experiencing a surge in popularity, with small businesses increasingly profiting from this digital asset. Vendors at this year's Mining Disrupt conference in Fort Lauderdale, Florida, reported a significant increase in the purchase of Dogecoin mining machines.

While the conference primarily focused on Bitcoin mining due to its prominence and support from major publicly traded firms, Dogecoin and Litecoin also featured heavily in discussions. Their proof-of-work consensus mechanism allows miners to earn rewards for securing their respective blockchains.

Launched in 2013 as a lighthearted project, Dogecoin, often dubbed Tesla billionaire Elon Musk's favorite digital asset, has maintained a strong presence in the cryptocurrency market. Now, a significant number of small businesses and even individual investors are actively involved in Dogecoin mining.

The rise of Dogecoin mining is partly due to "merged mining," a technique where machines simultaneously mine multiple proof-of-work cryptocurrencies, increasing overall profitability. Vendors noted a broad range of interest, from solo miners to publicly traded companies, all seeking to supplement their income.

Payne Cong, Head of Business Development at ElphaPex, highlighted the revenue maximization potential of mining these assets. Alan Martinez of hardware manufacturer JSBIT, estimated potential monthly earnings of approximately $750 per machine for Dogecoin mining, adding that even Nasdaq-listed companies are expressing interest in this technology. CoinWarz data indicates current daily profits of up to $5.83 per machine for Dogecoin mining, compared to approximately $9.41 for Bitcoin.

A snapshot showing Dogecoin profits per day. Source: CoinWarz

According to BIT Mining's December report, Dogecoin generated more revenue for the company than Bitcoin. The increasing difficulty and declining price of Bitcoin are making it increasingly challenging for smaller miners.

Musk's influence on Dogecoin and its future trajectory

Dogecoin's popularity soared after Elon Musk began discussing the coin on X (formerly Twitter). Musk's endorsements have significantly boosted Dogecoin's value. Initially conceived as a joke in 2013, Dogecoin has since evolved into a substantial asset.

Musk recently praised Dogecoin's tokenomics, highlighting its uncapped supply (10,000 new coins minted per minute) as advantageous for its use as a currency, contrasting it with Bitcoin's limited supply, often viewed more as a store of value.

Martinez noted that Dogecoin mining is currently dominated by small businesses, while large-scale mining operations remain less involved. He cited a coffee shop chain mining Dogecoin at six locations, utilizing the miners' waste heat for added efficiency. He humorously summarized this approach as: "Don't turn on your heater—turn on your miner."