Merge mining refers to the process of allowing individuals to mine multiple cryptocurrencies simultaneously without sacrificing computational performance.
Cryptomining is a highly lucrative activity. With the right computing equipment, you can start mining Bitcoin, Monero, Ravencoin, Dogecoin, Ethereum Classic, and several other prominent cryptocurrencies. Admittedly, the initial cost of purchasing the required graphics processing unit (GPU) or application-specific integrated chip (ASIC) can weigh heavily on your wallet. However, once the mining reward is credited to your wallet, you can get your investment back immediately.
But what if there was a way to mine multiple cryptocurrencies simultaneously using the same mining rig? This greatly increases your potential payouts without additional investment in mining rigs. It may sound nearly impossible, but that’s exactly what Merged his mining refers to. But what exactly is merge mining and how does it work? Tag it and find out.
What is merge mining?
Merge mining refers to the process of allowing individuals to mine multiple cryptocurrencies simultaneously without sacrificing computational performance. This is made possible by a consensus mechanism known as Auxiliary Proof of Work (AuxPoW).
AuxPoW works on the simple premise that work done on one blockchain is accepted as valid work on another. The concept became popular in 2010 when Bitcoin founder Satoshi Nakamoto hinted at the possibility of miners participating simultaneously in his two blockchain proof-of-work consensus mechanisms.
How does merge mining work?
To successfully implement the merged mining process, both blockchains must use the same hashing algorithm. For example, the algorithm used by Bitcoin is known as SHA-256, while Ethereum Classic uses the KECCAK-256 algorithm.
If a miner wants to mine a coin alongside Bitcoin, they have to find another coin that uses the SHA-256 algorithm. The same applies to Ethereum his classic. Mining cryptocurrencies alongside ETC requires other currencies to use her KECCAK-256 algorithm.
In addition to hashing algorithms, many subtleties also need to be properly implemented. However, it should be noted that this process of merge-mining does not make many technical changes to the parent blockchain. It is the auxiliary blockchain that must be effectively programmed to receive and accept the work done by the parent chain.
Additionally, if a blockchain is willing to provide or remove the support necessary to perform merged mining, it is imperative to initiate a “hard fork”. A hard fork is a major update to the protocol of a blockchain network. After a hard fork, the blockchain splits in two. The new version will follow the protocol update and the old chain will continue to work as before the update.
The first implementation of merge-mining happened on the Namecoin blockchain in 2011 when support for the SHA-256 algorithm was added to the network.
benefits and risks
One of the benefits of using merge-mining is that it reduces the probability of attacks of 51% against the auxiliary blockchain. It’s easy to explain. Thanks to increased profitability, auxiliary chains supporting merged mining will attract more miners. The more miners there are on the network, the harder it is to coordinate a 51% attack.
A 51% attack refers to an exploit that allows one miner or group of miners to control a majority (51% or more) of the nodes on the network. However, many developers disputed this advantage. They say that a 51% attack could easily be orchestrated if a large mining company participates in the mining activity of a small supporting chain.
Another obvious advantage of using merge mining is the impact on your carbon footprint. The energy consumption of cryptocurrency mining leads to a complex and never-ending debate, with strong opinions on both ends. But merge-mining, at least, does not add to the world’s ever-growing carbon footprint.
However, some miners discuss merge-mining maintenance issues. No additional processing resources are required, but mining more than one asset on a mining rig requires additional maintenance.
The conclusion is
Merge mining is an interesting and exciting concept. This allows young blockchains to achieve rapid growth and security while providing an additional revenue stream for miners. However, not many blockchains have embraced this concept due to perceived security risks. Perhaps some improvements could lead to more frequent implementations of merge-mining in the future.