Like many other coins, Dogecoin runs on its own dedicated blockchain. Dogecoin’s digital ledger is constantly being updated with all new transactions, and the network uses cryptography to keep all transactions secure. The Dogecoin blockchain uses a proof of work consensus mechanism, where miners use computers to solve complex mathematical equations in order to process transactions and record them on the blockchain. In exchange for supporting the blockchain, miners earn additional Dogecoin, which they can then hold or sell on the open market. Dogecoin may be used for payments and purchases, but it’s not a very effective store of value. This is chiefly because there is no lifetime cap on the number of Dogecoins that may be created by mining—meaning that the cryptocurrency is highly inflationary, by design. The blockchain rewards miners for their work by creating millions of new Dogecoins every day, which makes it very challenging for speculative price gains in Dogecoin to hold up over time.