Dogecoin Mining Profits Up 3,135%, Transaction Fees Up 6,700% This Year

While Dogecoin's DOGE/USD price is trending down lately, on-chain metrics show that the canine coin has seen some jaw-dropping growth this year.

What Happened: Dogecoin's mining profitability increased by nearly 9,500% from the beginning of the year to its early May high, according to blockchain data service BitInfoCharts.

As of press time, the metric corrected to being just 3,135% up when compared to the first day of the year.

Similarly, the total fees paid to the network's miners also increased many times over. According to blockchain data provider Messari, Dogecoin's total fees increased from just $390 on the first day of the year by 56,310% to an early May peak of $220,000 and currently stands at $8,580 —2,100 % up from Jan. 1.

See Also: HOW TO BUY DOGECOIN (DOGE)

Why It Matters: Dogecoin is a proof-of-work network, meaning that it relies on miners to secure the network by using the computing power of their hardware in exchange for brand new coins and transaction fees.

If any entity had enough computing power to account by itself for more than half of the network's total computing power, they would be able to change transaction history and spend the same coins multiple times.

Such an event — known as a 51% attack — breaks the basic premises and functonality of blockchains and cryptocurrencies. For that reason it is of the utmost importance for proof-of-work protocols to pay their miners enough to buy enough computing power to make such attacks impactical.

DOGE Price Action: Dogecoin is trading at 22 cents Thursday, up 5.6% over 24 hours.  

See Also: PROOF OF STAKE VS PROOF OF WORK