What is Dogecoin?
Dogecoin (DOGE) launched in December 2013 as a parody of the early cryptocurrency scene - built by Billy Markus and Jackson Palmer around the Shiba Inu meme. Despite its joke origins it is now one of the most widely held crypto assets, with a large retail community and endorsements from high-profile figures including Elon Musk.
Dogecoin is a fork of Litecoin (which was a fork of Bitcoin). It uses Proof-of-Work with the Scrypt algorithm and produces blocks every minute. Unlike Bitcoin, it has no hard supply cap - roughly 5 billion DOGE are issued per year, creating a slowly diminishing inflation rate.
How does Dogecoin work?
Dogecoin's protocol is intentionally simple: one-minute blocks, Scrypt mining, and a fixed per-block reward of 10,000 DOGE. Because it shares its hashing algorithm with Litecoin, Dogecoin is merge-mined with Litecoin today - most of its security budget is effectively inherited from the larger Scrypt mining industry.
The lack of a supply cap was an early design choice meant to keep the network inflationary enough that coins circulate rather than being hoarded. In practice the inflation rate falls each year as a percentage of total supply, approaching a steady ~4% issuance in the long run.