Merged mining is the process of allowing two different crypto currencies based on the same algorithm to be mined simultaneously.
This allows low hash powered crypto currencies to increase the hashing power behind their network by bootstrapping onto more popular crypto currencies.
This is quite a complex process. All the transactions for both networks are ordered and their merkle trees hashed out. The two blockchains are classified as the parent and the auxiliary blockchain. The Auxilary blockchains merkle root is inserted into the extra nonce section of the parent blockchain – i.e. Bitcoin or Litecoin with Dogecoin and Namecoin as the auxiliary chain.
As the information of one chain’s set of hashes has been incorporated into a superfluous part of the other blockchain then a proof of work can be considered to have been achieved if a solution with a specific difficulty has been performed.
In the case of Bitcoin and Namecoin, the difficulty is lower for Namecoin as there is less network power on that chain – i.e. the number of zeroes in the hash is less. The problem with this is that if a relatively large pool in the Bitcoin network switched to merge mining it could take a very large portion of the namecoin hashing power.
There are three scenarios:
1. The merged miner finds a solution where the difficulty is too low to provide a valid hash and proof of work for either chain.
2. The merged miner finds a solution where the proof of work has been achieved for the auxiliary chain, but not for the parent chain.
3. The merged miner finds a solution for that is greater than the difficulty requirements for both the parent and the auxiliary blockchains.
In case 1 nothing happens and the merged miner inserts a new nonce value and rehashes. In case two the miner has found a solution for the Namecoin network and propagates its solution throughout that network, if mining in conjunction with Bitcoin. In case three solutions have been found for both of the chains and so a all the required information for confirmations is propagated to dedicated miners of both networks and the merged miner has won both Bitcoin and Namecoin or Dogecoin and Litecoin.
- Get an Edge in Trading Forex, Stocks and Crypto With Elitetrading Sponsored
- ILCoin’s DCB: the iCloud of the blockchain industry Sponsored
- What Is Algo Affiliates and How Is It Changing the Marketing Game? Sponsored
- 12 Ethereum DApps You Can Use Right Now
- Build The Ultimate Trading Strategy With Crix Exchange
- What is Energi 3.0?
- Meet Pepo: The first crypto-powered app approved by Apple
- 5 Litecoin Faucets to Start Earning LTC Right Now
- What is AlgoLead and How Can Your Company Benefit From White Label Solutions?
- Crypto Trading and the Rise of the Robots
This website is only provided for your general information and is not intended to be relied upon by you in making any investment decisions. You should always combine multiple sources of information and analysis before making an investment and seek independent expert financial advice.
Where we list or describe different products and services, we try to give you the information you need to help you compare them and choose the right product or service for you. We may also have tips and more information to help you compare providers.
Some providers pay us for advertisements or promotions on our website or in emails we may send you. Any commercial agreement we have in place with a provider does not affect how we describe them or their products and services. Sponsored companies are clearly labelled.