Can you mine a variety of cryptocurrencies at the same time? It is possible that combined mining or merge mining is an agreement that allows the two blockchains of the same consensus protocol and hash functions to mine together without losing performance and maintain high -level security. If you are willing to invest in the entire machine, you can minimize a variety of currencies at a time, and each currency uses different resources. In this article, we discuss merge mining.

What is a Merged mining?

Merge mining, or auxiliary proof of work is the process of mining two independent cryptocurrencies at the same time. Although it is not as common as the consensus algorithm of the proof of work and even the proof of stake, some projects have adopted the existing structure in the more secure network during the development process.

Combined mining or Merge mining origin

The concept of merging mining appeared in early 2014, when the auxiliary work certificate was proved. This is a protocol that allows the work that allows to complete in the POW type of blockchain network, which can be used as a proof of block mining in another blockchain network.

The implementation of AUXPOW began in Bitcoin and namecoin blockchain. This is possible, because both blockchain runs under the SHA-256 mining algorithm. This is one of the main needs of the agreement. The blockchain must share the same protocol, otherwise it is unrealistic. The development of AUXPOW continued to develop in Dogecoins and Litecoin. In this case, both networks work under SCRYPT for block mining.

However, although there was no clear explanation in the Bitcoin White Paper, in 2009, the mysterious Nakamoto Satoshi expressed the possibility of searching for the calculation of miners in a thread Bitcointalk to search for work proof in multiple networks at the same time. This shows that Nakamoto has long foreseen the possibility of such work and opened the door to curiosity for it.

How does Merge mining work?

Each combined mining process involves a auxiliary chain and a more mature mother chain. In order to excavate the two passwords together, the two chains must have the same hash algorithm. In order to explain the process as simple as possible, we will use Namecoin and Bitcoin mining as examples.

In this case, Bitcoin is the parent chain, and namecoin is a sub -chain using the Bitcoin network. Both cryptocurrencies have the SHA-256 hash algorithm used to mine.

Implement

Mother chain developers can achieve merge mining without doing anything. Therefore, the Bitcoin network does not even need to know that namecoin is mining with it.

However, the auxiliary chain requires some additional development to perform mergers and mining. As a result, Namecoin developers updated the blockchain to accept the same excavation proof as Bitcoin and make it effective on the namecoin blockchain.

Merged mining process

Merge mining does not require miners to have additional computing power. As a miner, you can minimize these two cryptocurrencies as efficiently as only the mother currency. Miners only need to complete additional settings to support it.

You must first collect a transaction block for each chain. The namecoin block includes a set of standard transactions, which is also applicable to the Bitcoin block. However, it has an additional transaction, which contains a dissipation pointing to the Namecoin block you just created.

You can mine in several different ways:

You use Bitcoin's difficulty level to minimize a block. When the Bitcoin block is completed, it will be broadcast to the Bitcoin network. Because the difficulty of the bitcoin block you just dug out is more difficult than namecoin, you also dug a namecoin block. This allows you to get two mining rewards.

You mining a block at the difficulty level of the namecoin chain. You can complete the construction of the namecoin block by introducing the header and hash of Bitcoin blocks. The namecoin block link accepts this block and recognizes the additional Bitcoin header and hash as your work proof, which is because you are developing the development work to support mergers and mining. You will only get Namecoin mining rewards.

You use the difficulty level between the difficulty level of Namecoin and Bitcoin to minimize a block. Like the previous case, you will have only namecoin rewards.

Merge mining process characteristics

Merge mining involves a series of elements or characteristics related to its correct implementation and operation. Among them, we can emphasize:

Miners must build a blockchain compatible with them. For example, if the mining is used together with Bitcoin and Namecoin blockchain, the block generated on the Bitcoin blockchain will be adjusted to two networks. Because namecoin is auxiliary network, it will accept AuxPow. In this case, miners can get mining rewards from two networks. And if the block is generated in the namecoin network, its difficulty level is much lower than that of the main blockchain. It will be not compatible with Bitcoin blockchain because Bitcoin does not recognize the AUXPOW protocol. Therefore, miners can only get rewards generated in the namecoin network.

When an additional hash is added to the Merkle tree in the main chain, it will not change or modify it as in the auxiliary chain. In this case, the miners add the hash and the block header of the main blockchain to the auxiliary blockchain, which will be used as a job proof. However, the AuxPow protocol will ignore these data, and only the top hash value will be added to the auxiliary blockchain.

Impact of Merge mining

advantage

If the new blockchain project is implemented in merge mining, they will have some benefits. The agreement enhances the security of their network while allowing them to run as a separate chain. These secondary chains will also get more exposure through the association with more popular blockchains.

In addition, the miners have contributed more motivated, because they can get additional rewards without investing more funds in this process. Moreover, because miners usually transactions between two coins to retain what they created, the liquidity of these two cryptocurrencies will increase.

shortcoming

For the auxiliary chain combined mining, some additional development will be required. When a chain wants to switch from another mining protocol to merging mining, it will have to make a hard fork. If the chain wants to change its agreement from the mergers and mining, it is also necessary.

For miners and mining pools, if they want to obtain double -chain mining, they must also invest more resources. Although merge mining does not involve more computing power, it does involve more maintenance.

When you mine the two blockchain, the distribution channels (for mining pools) of the service connection and maintenance of the service will double. Some people may think that additional maintenance costs are reasonable enough.

Coins with auxiliary proof of work

Namecoin

Namecoin was the first coin to be mixed with Bitcoin. Although it is now one of the 300 positions of the market value, it once ranked among the top 10 at some time. It shows that even the most powerful cryptocurrency network is connected, the project can decrease slowly.

Although many mining pools support Namecoin's merger mining, the token has not been used since its launch. The project did not see the same development as the same. This indicates that the use of merge -mining cryptocurrencies does not necessarily mean that it must be a profitable investment.

Dogecoin

In the early days of the birth of dogecoins, the community decided to jointly mine with Litecoin. They found that the original mining mechanism would leave the network within one year without significant mining rewards. If no changes are made, the miners will no longer have the motivation of mining, and the network will be easily attacked by 51%.

After converting workload certificates to auxiliary workload proof, the price of the token increased from nearly $ 0.0002 (~ 0.00000041 BTC) to 0.00047 US dollars (~ 0.00000115 BTC). This means that the price of BTC rose 180%within a few weeks.

Although it is only a data point, this proves that the project that implements merge mining may represent a short -term investment that is favorable.

Elastos 

Elastos is an Internet network supported by the blockchain, which combines mining with Bitcoin. Because this coin is not so popular, it may become an investment opportunity. Once the platform is combined with mining, the price of Elastos may rise like a dogecoin.

Some implementation of mining

Bitcoin and Namecoin

The merger is the first time in the encrypted ecosystem merged and mining, which occurred in early 2014. Both cryptocurrencies use SHA-256 mining algorithms.

However, although Namecoin (NMC) ranked first in capitalization among the most commonly used cryptocurrencies at that time. But today, despite its merger with the Bitcoin network, the market value of Namecoin still occupies 392nd. market. Although Bitcoin (BTC) continues to position itself as the most widely used cryptocurrency in the world.

Dogecoin and Litecoin

Since the launch of Dogecoins (DOGE) in 2013, its community has decided to change the network to AUXPOW, and merged with the Litecoin (LTC) network in September 2014. This integration makes the value of dog currency increased by 180%in just a few minutes. week.

This combination also enables dogecoins to climb to one of the most well -known and most used cryptocurrencies in the world. Litecoin (LTC) currently ranks seventh in market value in the most widely used cryptocurrency. Similarly, the merge mining has significantly improved the security level of dogecoins, and its computing power is much greater than at the beginning.

Bitcoin and Elastos

Although this may be one of the most unknown combinations, the Elastos Project and its ELA cryptocurrency are expected to achieve a very similar growth as Doge (Doge). When the mining process of combining network Bitcoin.

Elastos is the first open source operating system based on blockchain technology to focus on the Internet. The design purpose of the system is to create a new operating system to run the Internet supported by blockchain technology. In this way, it will be a completely safe and decentralized operating system so that users can operate in a reliable and direct way.

Bitcoin and RSK

RSK is a development platform that allows smart contracts in the Bitcoin network in a safe and simple way. Since RSK also implements the SHA-256 algorithm, the combination of Bitcoin network and platform RSK is possible.

Like other cases of mining and mining applications, the implementation of merging mining allows the use of the same mining equipment in two networks. Reduce the investment and resource costs of complex equipment separately. Similarly, one of the expansion capabilities of one network can be used to improve the security of the other network. At the same time, miners will be more likely to generate new blocks by participating in two different networks at the same time. Of course, they can also get awarded by two networks.

The above content introduces the principles and characteristics of various cryptocurrencies at the same time. For startups that want to develop without risks that want to become a 51% attack target, merging mining is a huge opportunity. As the threat of such attacks continues to increase, we may see that more projects turn to merge mining.