diff --git a/examples/democoin/app/app.go b/examples/democoin/app/app.go
index a27a37cebe..27ca7a1458 100644
--- a/examples/democoin/app/app.go
+++ b/examples/democoin/app/app.go
@@ -80,6 +80,7 @@ func NewDemocoinApp(logger log.Logger, dbs map[string]dbm.DB) *DemocoinApp {
 	app.SetInitChainer(app.initChainerFn(coolKeeper))
 	app.MountStoreWithDB(app.capKeyMainStore, sdk.StoreTypeIAVL, dbs["main"])
 	app.MountStoreWithDB(app.capKeyAccountStore, sdk.StoreTypeIAVL, dbs["acc"])
+	app.MountStoreWithDB(app.capKeyPowStore, sdk.StoreTypeIAVL, dbs["pow"])
 	app.MountStoreWithDB(app.capKeyIBCStore, sdk.StoreTypeIAVL, dbs["ibc"])
 	app.MountStoreWithDB(app.capKeyStakingStore, sdk.StoreTypeIAVL, dbs["staking"])
 	// NOTE: Broken until #532 lands
@@ -100,16 +101,18 @@ func MakeCodec() *wire.Codec {
 	const msgTypeIssue = 0x2
 	const msgTypeQuiz = 0x3
 	const msgTypeSetTrend = 0x4
-	const msgTypeIBCTransferMsg = 0x5
-	const msgTypeIBCReceiveMsg = 0x6
-	const msgTypeBondMsg = 0x7
-	const msgTypeUnbondMsg = 0x8
+	const msgTypeMine = 0x5
+	const msgTypeIBCTransferMsg = 0x6
+	const msgTypeIBCReceiveMsg = 0x7
+	const msgTypeBondMsg = 0x8
+	const msgTypeUnbondMsg = 0x9
 	var _ = oldwire.RegisterInterface(
 		struct{ sdk.Msg }{},
 		oldwire.ConcreteType{bank.SendMsg{}, msgTypeSend},
 		oldwire.ConcreteType{bank.IssueMsg{}, msgTypeIssue},
 		oldwire.ConcreteType{cool.QuizMsg{}, msgTypeQuiz},
 		oldwire.ConcreteType{cool.SetTrendMsg{}, msgTypeSetTrend},
+		oldwire.ConcreteType{pow.MineMsg{}, msgTypeMine},
 		oldwire.ConcreteType{ibc.IBCTransferMsg{}, msgTypeIBCTransferMsg},
 		oldwire.ConcreteType{ibc.IBCReceiveMsg{}, msgTypeIBCReceiveMsg},
 		oldwire.ConcreteType{simplestake.BondMsg{}, msgTypeBondMsg},
diff --git a/examples/democoin/app/app_test.go b/examples/democoin/app/app_test.go
index bf2ddc232f..74b789bea0 100644
--- a/examples/democoin/app/app_test.go
+++ b/examples/democoin/app/app_test.go
@@ -11,6 +11,7 @@ import (
 
 	"github.com/cosmos/cosmos-sdk/examples/democoin/types"
 	"github.com/cosmos/cosmos-sdk/examples/democoin/x/cool"
+	"github.com/cosmos/cosmos-sdk/examples/democoin/x/pow"
 	sdk "github.com/cosmos/cosmos-sdk/types"
 	"github.com/cosmos/cosmos-sdk/x/auth"
 	"github.com/cosmos/cosmos-sdk/x/bank"
@@ -71,6 +72,7 @@ func loggerAndDBs() (log.Logger, map[string]dbm.DB) {
 	dbs := map[string]dbm.DB{
 		"main":    dbm.NewMemDB(),
 		"acc":     dbm.NewMemDB(),
+		"pow":     dbm.NewMemDB(),
 		"ibc":     dbm.NewMemDB(),
 		"staking": dbm.NewMemDB(),
 	}
@@ -238,6 +240,53 @@ func TestSendMsgWithAccounts(t *testing.T) {
 	assert.Equal(t, sdk.CodeOK, res.Code, res.Log)
 }
 
+func TestMineMsg(t *testing.T) {
+	bapp := newDemocoinApp()
+
+	// Construct genesis state
+	// Construct some genesis bytes to reflect democoin/types/AppAccount
+	coins := sdk.Coins{}
+	baseAcc := auth.BaseAccount{
+		Address: addr1,
+		Coins:   coins,
+	}
+	acc1 := &types.AppAccount{baseAcc, "foobart"}
+
+	// Construct genesis state
+	genesisState := map[string]interface{}{
+		"accounts": []*types.GenesisAccount{
+			types.NewGenesisAccount(acc1),
+		},
+		"cool": map[string]string{
+			"trend": "ice-cold",
+		},
+	}
+	stateBytes, err := json.MarshalIndent(genesisState, "", "\t")
+	require.Nil(t, err)
+
+	// Initialize the chain (nil)
+	vals := []abci.Validator{}
+	bapp.InitChain(abci.RequestInitChain{vals, stateBytes})
+	bapp.Commit()
+
+	// A checkTx context (true)
+	ctxCheck := bapp.BaseApp.NewContext(true, abci.Header{})
+	res1 := bapp.accountMapper.GetAccount(ctxCheck, addr1)
+	assert.Equal(t, acc1, res1)
+
+	// Mine and check for reward
+	mineMsg1 := pow.GenerateMineMsg(addr1, 1, 2)
+	SignCheckDeliver(t, bapp, mineMsg1, 0, true)
+	CheckBalance(t, bapp, "1pow")
+	// Mine again and check for reward
+	/*
+		mineMsg2 := pow.GenerateMineMsg(addr1, 2, 2)
+		SignCheckDeliver(t, bapp, mineMsg2, 1, true)
+		CheckBalance(t, bapp, "2pow")
+	*/
+
+}
+
 func TestQuizMsg(t *testing.T) {
 	bapp := newDemocoinApp()
 
diff --git a/examples/democoin/cmd/democoind/main.go b/examples/democoin/cmd/democoind/main.go
index 6fc5930678..3967747043 100644
--- a/examples/democoin/cmd/democoind/main.go
+++ b/examples/democoin/cmd/democoind/main.go
@@ -55,6 +55,10 @@ func generateApp(rootDir string, logger log.Logger) (abci.Application, error) {
 	if err != nil {
 		return nil, err
 	}
+	dbPow, err := dbm.NewGoLevelDB("democoin-pow", filepath.Join(rootDir, "data"))
+	if err != nil {
+		return nil, err
+	}
 	dbIBC, err := dbm.NewGoLevelDB("democoin-ibc", filepath.Join(rootDir, "data"))
 	if err != nil {
 		return nil, err
@@ -66,6 +70,7 @@ func generateApp(rootDir string, logger log.Logger) (abci.Application, error) {
 	dbs := map[string]dbm.DB{
 		"main":    dbMain,
 		"acc":     dbAcc,
+		"pow":     dbPow,
 		"ibc":     dbIBC,
 		"staking": dbStaking,
 	}
diff --git a/examples/democoin/x/pow/mine.go b/examples/democoin/x/pow/mine.go
new file mode 100644
index 0000000000..ff2264aaa7
--- /dev/null
+++ b/examples/democoin/x/pow/mine.go
@@ -0,0 +1,44 @@
+package pow
+
+import (
+	"encoding/hex"
+	"math"
+	"strconv"
+
+	sdk "github.com/cosmos/cosmos-sdk/types"
+	crypto "github.com/tendermint/go-crypto"
+)
+
+func GenerateMineMsg(sender sdk.Address, count uint64, difficulty uint64) MineMsg {
+	nonce, hash := mine(sender, count, difficulty)
+	return NewMineMsg(sender, difficulty, count, nonce, hash)
+}
+
+func hash(sender sdk.Address, count uint64, nonce uint64) []byte {
+	var bytes []byte
+	bytes = append(bytes, []byte(sender)...)
+	countBytes := strconv.FormatUint(count, 16)
+	bytes = append(bytes, countBytes...)
+	nonceBytes := strconv.FormatUint(nonce, 16)
+	bytes = append(bytes, nonceBytes...)
+	hash := crypto.Sha256(bytes)
+	// uint64, so we just use the first 8 bytes of the hash
+	// this limits the range of possible difficulty values (as compared to uint256), but fine for proof-of-concept
+	ret := make([]byte, hex.EncodedLen(len(hash)))
+	hex.Encode(ret, hash)
+	return ret[:16]
+}
+
+func mine(sender sdk.Address, count uint64, difficulty uint64) (uint64, []byte) {
+	target := math.MaxUint64 / difficulty
+	for nonce := uint64(0); ; nonce++ {
+		hash := hash(sender, count, nonce)
+		hashuint, err := strconv.ParseUint(string(hash), 16, 64)
+		if err != nil {
+			panic(err)
+		}
+		if hashuint < target {
+			return nonce, hash
+		}
+	}
+}
diff --git a/examples/democoin/x/pow/types.go b/examples/democoin/x/pow/types.go
index 70c456d840..ea368c3063 100644
--- a/examples/democoin/x/pow/types.go
+++ b/examples/democoin/x/pow/types.go
@@ -22,12 +22,15 @@ type MineMsg struct {
 	Proof      []byte      `json:"proof"`
 }
 
+// enforce the msg type at compile time
+var _ sdk.Msg = MineMsg{}
+
 // NewMineMsg - construct mine message
 func NewMineMsg(sender sdk.Address, difficulty uint64, count uint64, nonce uint64, proof []byte) MineMsg {
 	return MineMsg{sender, difficulty, count, nonce, proof}
 }
 
-func (msg MineMsg) Type() string                            { return "mine" }
+func (msg MineMsg) Type() string                            { return "pow" }
 func (msg MineMsg) Get(key interface{}) (value interface{}) { return nil }
 func (msg MineMsg) GetSigners() []sdk.Address               { return []sdk.Address{msg.Sender} }
 func (msg MineMsg) String() string {
diff --git a/examples/democoin/x/pow/types_test.go b/examples/democoin/x/pow/types_test.go
index 04360c3fda..34ab8914eb 100644
--- a/examples/democoin/x/pow/types_test.go
+++ b/examples/democoin/x/pow/types_test.go
@@ -1,16 +1,12 @@
 package pow
 
 import (
-	"encoding/hex"
 	"fmt"
-	"math"
-	"strconv"
 	"testing"
 
 	"github.com/stretchr/testify/assert"
 
 	sdk "github.com/cosmos/cosmos-sdk/types"
-	crypto "github.com/tendermint/go-crypto"
 )
 
 func TestNewMineMsg(t *testing.T) {
@@ -23,36 +19,7 @@ func TestNewMineMsg(t *testing.T) {
 func TestMineMsgType(t *testing.T) {
 	addr := sdk.Address([]byte("sender"))
 	msg := MineMsg{addr, 0, 0, 0, []byte("")}
-	assert.Equal(t, msg.Type(), "mine")
-}
-
-func hash(sender sdk.Address, count uint64, nonce uint64) []byte {
-	var bytes []byte
-	bytes = append(bytes, []byte(sender)...)
-	countBytes := strconv.FormatUint(count, 16)
-	bytes = append(bytes, countBytes...)
-	nonceBytes := strconv.FormatUint(nonce, 16)
-	bytes = append(bytes, nonceBytes...)
-	hash := crypto.Sha256(bytes)
-	// uint64, so we just use the first 8 bytes of the hash
-	// this limits the range of possible difficulty values (as compared to uint256), but fine for proof-of-concept
-	ret := make([]byte, hex.EncodedLen(len(hash)))
-	hex.Encode(ret, hash)
-	return ret[:16]
-}
-
-func mine(sender sdk.Address, count uint64, difficulty uint64) (uint64, []byte) {
-	target := math.MaxUint64 / difficulty
-	for nonce := uint64(0); ; nonce++ {
-		hash := hash(sender, count, nonce)
-		hashuint, err := strconv.ParseUint(string(hash), 16, 64)
-		if err != nil {
-			panic(err)
-		}
-		if hashuint < target {
-			return nonce, hash
-		}
-	}
+	assert.Equal(t, msg.Type(), "pow")
 }
 
 func TestMineMsgValidation(t *testing.T) {