Module 2 - How Dogecoin Works: Mining and Supply
Understand Dogecoin's Scrypt proof-of-work, merged mining with Litecoin, fees and confirmations, and its inflationary supply model. A clear, beginner-friendly guide to how DOGE actually works.
Dogecoin uses proof-of-work (PoW) to secure the network. Miners compete to add blocks by solving puzzles. Each valid block adds transactions to the chain and earns a block reward paid in DOGE.
DOGE uses the Scrypt algorithm (memory-friendly) while Bitcoin uses SHA-256. Scrypt favored GPUs early on and today runs on Scrypt ASICs. Result: fast block times and low fees for everyday transfers.
Dogecoin targets ~1 minute per block (Bitcoin ~10 minutes). Many wallets consider 1–6 confirmations for everyday payments, depending on risk tolerance and amount.
Fees on Dogecoin are typically low and sized to prevent spam. Exact fees vary by wallet settings and network conditions but are generally a fraction of a DOGE per transaction.
Since 2014, Dogecoin supports auxiliary (merged) mining with Litecoin. Miners can secure both chains simultaneously, improving DOGE security without splitting hashpower.
After reaching 100B DOGE in 2015, rewards became fixed: 10,000 DOGE per block (~5B DOGE per year at 1-minute blocks). This creates predictable, low inflation that shrinks in percentage terms as the total supply grows.
Back up seed phrases, keep software updated, and verify addresses before sending. For larger amounts, consider hardware wallets and multi-factor protections.
Quick Check - Module 2 Quiz
Answer 5 randomized questions. Score shows as number (0-10) and US letter grade (A-F). Your best score is saved locally.