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Dogecoin’s block rewards have long been regarded as a bonus of merge mining on Litecoin. But with DOGE’s recent price rally overshadowing LTC, that may no longer be the case.
Data from Bitinfocharts shows that the meme-coin’s mining revenue per one gigahashes second (GH/s) of computing power in one day is at $25, which has ten-folded since early April and is in line with DOGE’s price jump over the past month. During the same period, the mining revenue of one GH/s on LTC has only grown from $5 to right now around $8.
The blockchains of both Dogecoin and Litecoin run on the proof-of-work consensus mechanism using the Scrypt algorithm.
Therefore, an application specific integrated circuit (ASIC) miner that is designed to mine LTC can also mine DOGE simultaneously with the same hash rate if the mining pools they connect to support LTC and DOGE merge mining. Currently, the hash rate on both blockchains are around 350 terahashes per second.
Indeed, historic data shows the total computing power securing the Dogecoin network goes hand-in-hand with that on Litecoin thanks to major LTC mining pools such as F2Pool, Litecoinpool.org, Viabtc and Antpool all supporting merge mining. But since the price of DOGE had largely been trading well below $0.005 since early 2018, it was regarded as arguably an LTC mining byproduct.
Overall, the recent price rallies of both DOGE and LTC have also revived the markets for Litecoin ASIC miners. Over the past week, Chinese mining resellers have started actively posting bids and asks on WeChat again for old LTC mining equipment such as the AntMiner L3+, which was launched in July 2017.
Those old models have largely stayed unprofitable after Litecoin’s previous halving in August 2019 when LTC was changing hands below $100 and have not become marginally profitable until last December when LTC jumped back above $120.
As of writing, the meme coin is the fourth largest cryptocurrency by market capitalization with $78 billion after BTC, ETH and BNB while LTC is the 10th largest with $22 billion, according to CoinGecko.
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