Merge mining, also known as auxiliary proof-of-work (AuxPoW), is a technique in cryptocurrency mining that allows miners to mine multiple cryptocurrencies simultaneously using the same computational resources. This is achieved by enabling one blockchain to recognize and accept proof-of-work solutions from another blockchain.
Merge mining is particularly beneficial for smaller networks as it leverages the computational power of larger networks to enhance security.
Here are the key points about merge mining:
Shared Proof-of-Work (PoW):
• Merge mining relies on the fact that two or more cryptocurrencies use the same or similar proof-of-work algorithms. This means that miners can use their computational power to mine multiple cryptocurrencies at the same time.Security Enhancement:
• Merge mining is often employed to bolster the security of smaller or less secure networks by allowing them to piggyback on the computational power of larger, more secure networks. This makes the smaller network more resistant to 51% attacks.Efficiency and Resource Utilization:
• Merge mining is efficient for miners since it allows them to mine additional cryptocurrencies without significant extra computational effort or cost. This can be particularly advantageous for miners seeking to diversify their mining activities.Reward Distribution:
• Rewards obtained through merge mining are typically distributed in the form of the cryptocurrency being mined. For example, if a miner successfully mines a block on the parent blockchain, they receive rewards in that cryptocurrency. Simultaneously, they also receive rewards in the auxiliary blockchain for contributing computational power.Mutual Benefit:
• Merge mining benefits both the parent and auxiliary blockchains. The parent chain gains increased security and computational power, while miners are incentivized to participate due to the potential for additional rewards.
In summary, merge mining is a technique that allows miners to simultaneously mine multiple cryptocurrencies that share a similar proof-of-work algorithm. It enhances the security of smaller networks and provides miners with additional opportunities for rewards.
Sources:
What is merge mining? Which coins can be merge mined? https://bitkan.com/learn/what-is-merge-mining-which-coins-can-be-merge-mined-14185
What is Merged Mining? https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-merged-mining
Explaining Merged Mining https://blog.hathor.network/explaining-merged-mining-dcecccb0005c