What is Merged Mining?

What is Merged Mining?

If you’ve been around the cryptocurrency world for a long, you might be familiar with crypto mining. The most often utilized techniques are cloud mining, ASIC mining, GPU mining, and CPU mining. Merged mining is a less well-known method of cryptocurrency mining. Merged mining is auxiliary proof of operation (AuxPoW). However, It is the modern mining of two different cryptocurrencies. The approach enables miners to mine simultaneously on multiple blockchains.

If permitted by a given cryptocurrency, combined mining allows you to simultaneously mine on multiple blockchains using the same mining algorithm and earn “additional coins.” With integrated mining, you may mine various cryptocurrencies simultaneously, which means the best financial budgeting without dividing your hash power. For example, the original blockchain (such as Bitcoin) and the merge-mined blockchain are processed simultaneously via merge mining using the same hash rate (e.g., RSK or NMC). As a result, both currencies are safer since every share your miner provides counts toward the total mining power of both coins. 

In this article, we discuss the following: 

  • What is Merged Mining?
  • How Merged Mining Works?
  • Examples Of Merged Mining
  • Advantages Of Merged Mining
  • Disadvantages Of Merged Mining
  • Is Merged Mining Considered Safe?

What is Merged Mining?

Merged mining is simultaneously mining two or more cryptocurrencies without compromising overall mining speed. In essence, auxiliary proof of work (APW) allows miners to mine blocks on multiple chains simultaneously using their computing capacity (AuxPoW).

The concept behind AuxPoW is that work completed on one blockchain is legitimate work on another. The parent blockchain is the one that delivers the formal verification, while the auxiliary blockchain is the one that acknowledges it as fair. All relevant cryptocurrencies must use the same algorithm to accomplish merged mining. In contrast, Bitcoin uses SHA-256; therefore, as much as the technical developments are correct, nearly any other coin that uses SHA-256 can be mined alongside Bitcoin.

Notably, it impacts the main blockchain because it requires no technical changes. On the other hand, configuring the auxiliary blockchain needs to accept and receive the work of the parent chain efficiently. Hard forks are typically required to add or remove support for merged mining. Theoretically, using the computational power of Bitcoin or another larger chain, merged mining can be an intriguing way for a tiny (low-hash) blockchain to boost security. If enough miners agree to use combined mining, this might lessen the likelihood of 51% attacks.

More Explanation on Merged Mining

Many developers, however, reject this notion and assert that integrated mining gives a false impression of safety. mainly because on the smaller chain, a relatively large mining pool that is not extremely popular on Bitcoin might rapidly approach 51% hashing power. So this is opposed by the claim that if the incentive or reward is strong enough to encourage mining this auxiliary chain, it will draw more miners, lowering concentration and boosting security. In addition, some contend that removing economic losses from the process in integrated mining reduces security. For instance, Bitcoin miners can employ their hashing power on the more compact chain without jeopardizing their block rewards. Therefore, miners would have fewer incentives on the smaller chain to behave honorably.

How Merged Mining Works?

Two blockchains—the responsible adult blockchain and the auxiliary blockchain—are involved in the merged mining process. The auxiliary blockchain is fresh or small compared to the parent blockchain, which is Bitcoin (Namecoin). The blockchains must use the same hashing algorithm for them to cooperate. So this requires the algorithm used by all of the involved cryptocurrencies to be the same.

Since Bitcoin, for instance, utilizes SHA-256, any other coin that employs SHA-256 uses Bitcoin. Namecoin and Bitcoin, which use the SHA-256 hashing method for mining, are among the well-known merged mining pairs. It allows a miner to mine for more than one blockchain simultaneously. The benefit is that every hash the miner does contributes to the total hash rate of both (all) currencies, and as a result, they are all more secure. Starting with a high-level explanation: The miner (or mining controller in the case of pooled mining) builds a block for both hash chains so that the same hash calculation secures both blocks—work units based on this block to miners. However, the block is put back together with finished proof of work and then uploaded to the appropriate blockchain. If a miner successfully solves a block. 


The only murky aspect is precisely how a single hash can protect both blockchains. Again, I’ll use the contrast between Bitcoin and Namecoin as an illustration, with Namecoin supporting merged mining and Bitcoin not:

The miner must first put together a transaction set for each blockchain. The last Namecoin block is then put together and hashed by him. Then, he adds this hash to a transaction included in the Bitcoin transaction set at the tree’s root. This transaction must be legitimate in the Bitcoin chain. The complete Bitcoin header is then put together, including this transaction. Finally, the Bitcoin block is put together and distributed to the Bitcoin network if a miner finds the hash at the Bitcoin levels of difficulty.

Examples Of Merged Mining

As examples, we’ll use Bitcoin and Namecoin. The parent blockchain will be Bitcoin, and the auxiliary blockchain will be Namecoin. Building a block of transactions for each chain is the initial stage. The mining process will then begin. Be aware that the difficulty of each chain will vary, with the entire chain having the most incredible difficulty. Three possible possibilities could occur as you mine.

  • You receive two rewards if you mine a block at the father chain’s (Bitcoin’s) degree of difficulty.
  • You only get the mining incentive for Namecoin if you mine a block at the difficulty level of the auxiliary chain.
  • You get one prize if you mine a block between the parent and auxiliary chain game modes—the same result as the second example above.
  • One of the enormous benefits of combined mining is that the miners don’t need to use more processing power.

Advantages Of Merged Mining

Parent-attached helper ties have access to more hash power, protecting them against 51% of assaults. As a result, a more secure coin is immediately more appealing to anticipated merchants. The best example is Dogecoin, whose market value nearly doubled after the currency announced a decision to combine mining with Litecoin.

When a miner balances two hash capabilities simultaneously, this is known as “merged mining.” A miner is encouraged to use as much money as possible from his resources. By mining two different currency types at the cost of a single power consumption, miners can keep an eye on assets while enabling equivalent hashing measures for the two organizations. Additionally, it allows them to receive more money for carrying out the same work, which is an excellent incentive to engage in such mining constantly.

There is no added effort for the parent chain. The only memory-intensive task which creates is managing the assistance chain hashes resulting from the interface exchange.

Coins must compete for miners. Different monetary standards continue whenever miners mine one digital currency over another. There is still a chance that one will lose out on the following digital currency, regardless of which one is more common than the other in terms of hash rate. By allowing each currency to flourish with its advantages rather than requesting the miner’s attention, integrated mining has some benefits.

More Advantages

In merged mining, the miner simultaneously searches for proof of work on the parental and auxiliary blockchains, resulting in a double payout. You get two awards if you find the parent chain’s block hash. So, the auxiliary blockchain can confirm blocks using the block hash from the parent chain.

Enhanced security for auxiliary blockchains: Auxiliary blockchain projects are typically new and modest. A minor blockchain can increase its hash rates and safety by using the hashing power of the parent blockchain. Aside from improved security, affiliation with more well-known blockchains can help auxiliary blockchains become more visible. Merged mining prevents this.

Disadvantages Of Merged Mining

The following are a few drawbacks of combined mining:

A hard fork is required since it will take some time for auxiliary blockchains to integrate merged mining. Second, a hard fork is required when shifting from one technique to merged mining. Third, it is necessary to do another hard fork while transitioning from merged mining.

Merged mining does not necessitate additional computational power, but it does necessitate more maintenance effort. Compared to mining one blockchain, mining two blockchains requires more work.

Overall, combined mining has benefits, from fostering the development of new blockchain projects to enhancing network security. Although many contests the effectiveness of this type of crypto mining, many crypto projects still use it, and it is becoming more and more popular.

Is Merged Mining Considered Safe?

It attacks digital currency attacked by 51%. When a malicious party finds a weakness or amasses sufficient hashing power to maintain control of a blockchain, they launch a 51 percent attack. Such attacks are unimportant with a significant currency like Bitcoin. The tremendous hash rate of these enormous mint bits makes it difficult for a single one, or even a group, to come together and launch a 51 percent attack. With the money not being considered, these attacks become far more feasible. We can demonstrate a coin with a poor hash rate with enough hash power. If a lousy party can maintain control of such a group, they may be able to use it to their advantage.

Through combined mining, miners can contribute their hash strength to these weaker coins. This method, also known as auxiliary proof-of-work, can independently increase both cryptographic currencies’ hash rates. Benefits include higher quality security. This part was pioneered in 2011 by Namecoin, which used Bitcoin as the digital base currency.

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