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Merged mining is mining for more than one cryptocurrency, that works on the same algorithm. The concept was a mining model that came about around 2014 with the Auxiliary proof of work (AuxPoW) protocol. While it was not something contemplated in the original white paper on cryptocurrency by Satoshi Nakamoto, he mentioned it on a Bitcointalk thread a few years later. Merged mining allows a miner to mine in more than one blockchain simultaneously. The cryptocurrencies operate on a shared algorithm basis.
Merged mining also assists in warding off security concerns like chain attacks. It is now generally done through merged mining pools without additional resource investment by a user. This post discusses merged mining and its nuances.
What exactly is merged mining?
Merged mining, in technical jargon, is also called ‘Auxiliary Proof of Work,’ which is the protocol it is based on. A rather rudimentary understanding of the concept involves using the work done on one primary blockchain in another auxiliary blockchain(s). These blockchains, however, have to be operating on the same hash algorithm as the primary blockchain. The computational work done over the primary network is essentially shared across other auxiliary networks and leveraged accordingly. It does not require additional computational effort to conduct merged mining, just supporting architectural changes in the auxiliary networks to accept the PoW done for the parent blockchain.
The primary blockchain does not require any major modification for merged mining. For the auxiliary blockchain network, however, you will have to use the assistance of something called a ‘hard fork’ to modify it. Forks are usually introduced to add new features to a blockchain. A rudimentary understanding of it- forks introduce a new set of rules for the crypto to follow.
The auxiliary blockchains also have an increased amount of security due to operating on the same hashing power as the primary blockchain. Auxiliary blockchains sometimes also gain more traction as crypto coins owing to being associated with the primary blockchain. Namecoin, for instance, gained some ground after being merge-mined along with Bitcoin. It was also one of the first implementations of merged mining. It was followed by the public merge-mining of Dogecoin with Litecoin in 2014 as well.
As a result of which, Dogecoin, which was the auxiliary cryptocurrency, witnessed exponential growth in the following weeks. It was a successful enterprise in merge-mining as it also led to Dogecoin’s position being cemented as a popular crypto coin for years to come. The combination mining also led to improvements in its security network over time.
There is a high incentive for merged mining, as the rewards are extra for no additional hours to be put in by the miner. There is, however, extra maintenance work required in maintaining two networks for the miner.
Pros of merged mining:
- It allows the same mining equipment to be used to generate new blocks in several different networks simultaneously.
- Due to merged mining, the power of the hash in blockchain networks increases. It helps to generate greater computational power for networks and an increase in their level of difficulty, which makes the networks more secure and robust by having a larger computational capacity or, in other words, hashing. It can become a great advantage for small blockchains with less hashing power and a low level of security. It can also reduce the probability of suffering attacks. Namecoin became secure in the same way.
- The same mining equipment used for block mining in several networks increases the profitability and performance of the mining equipment. And therefore mining activities as well.
- Miners who execute merged mining get many opportunities to generate new blocks using the same mining algorithm, e.g., SHA-256. It will benefit the miners in receiving rewards for block mining, too.
What is a merged mining pool?
A merged mining pool is created out of combining the resources of a large number of people. The idea behind creating a pool is to increase the probability of finding the solutions to a block. Combining computational resources results in better facilitation of this goal.
With merged mining network complexities in 2021, solo mining is gradually becoming unfeasible for generating any profit. With a merged mining pool, miners also collectively devise rules of the pool for a more constant source of revenue. Some amount of mining fee is charged for the maintenance of the pool, as well as for the services provided. The remaining mining rewards are divided among the participants.
Before selecting a merged mining pool, ensure your blockchain software is compatible with the pool. An overall assessment of the pool’s security, server location, fee, and reputation must also be done before deciding.
The size of the mining pool is also a factor to look for while choosing a suitable mining pool. Small mining pools have fewer miners and low hash rates. Suppose you choose to join a large pool; you have to be aware of the mining difficulty, especially if your equipment isn’t powerful enough. Thus, a balance is required between the size of the pool and your hashing power. If you wish to learn more about cryptocurrency mining pools, you should check out our blog.
Conclusively, merged mining is a process by which the computational work over one network can be harnessed over others. Miners might sometimes create a combination of networks called a merged mining pool. This aids faster mining and provides additional resources. The onus lies on the miners to pick a merged mining pool that suits their needs.
WazirX has India’s largest crypto mining rewards. One can trade in any cryptocurrency in USDT, BTC, and INR to unlock WazirX’s WRX. Each trade is then calculated to assign rewards. In WazirX Mining, you can unlock and earn upto 10,000 WRX every day. Even though the first phase of the WRX mining program has ended, you can look forward to the next phase. To know more about how you can participate in the WazirX mining program, visit this link.
Frequently Asked Questions
How Does Bitcoin Work?
The blockchain, a distributed digital ledger, is what Bitcoin is based on. As the name suggests, blockchain is a linked database made up of blocks that store information about each transaction, such as the date and time, total amount, buyer and seller, and a unique identifier for each exchange. Entries are linked in chronological order to form a digital blockchain. Entries are linked in chronological order to form a digital blockchain. Blockchain is decentralized, which means any central authority does not control it.
How Bitcoin Mining Works?
Bitcoin mining is a crucial element of the blockchain ledger's upkeep and development and the act of bringing new Bitcoins into circulation. It's done with the help of cutting-edge computers that solve exceedingly challenging computational arithmetic problems. Auditor miners are rewarded for their work. They're in charge of ensuring that Bitcoin transactions go through smoothly and legitimately. This standard was established by Satoshi Nakamoto, the founder of Bitcoin, to keep Bitcoin users ethical. By confirming transactions, miners assist in avoiding the "double-spending issue."
How To Make Bitcoin?
Bitcoin mining is not just the process of putting new Bitcoins into circulation, but it is also an essential part of the blockchain ledger's upkeep and development. It is carried out with the assistance of highly advanced computers that answer challenging computational math problems. Miners are rewarded for their efforts as auditors. They are in charge of ensuring that Bitcoin transactions are legitimate. Satoshi Nakamoto, who is the founder of Bitcoin, innovated this standard for keeping Bitcoin users ethical. Miners help to prevent the "double-spending problem" by confirming transactions.
How To Create Bitcoin Account?
Firstly, Go to the WazirX website and sign up. Then, a verification mail will be sent to you. The link sent via verification mail would be available only for a few seconds so make sure you click on the link sent to you as soon as possible, and it will verify your email address successfully. The next step is to set up security, so select the most suitable option for you. After you have set up the security, you will get a choice to either proceed further with or without completing the KYC procedure. After that, you will be directed to the Funds and Transfer page, where you could start depositing Bitcoins to your wallet. You can also deposit INR and then use it to buy Bitcoin for your WazirX Bitcoin wallet.
How To Invest In Bitcoin?
Bitcoin may be invested in two ways: through mining or exchanges. Bitcoin mining is carried out by high-powered computers that solve challenging computational arithmetic problems that are too difficult to complete by hand and complex enough to tax even the most powerful computers. WazirX, a Bitcoin exchange, is another alternative.
How Many Bitcoins Will Ever Be Created?
The source code of Bitcoin stipulates that it must have a restricted and finite quantity. As a result, only 21 million Bitcoins will ever be generated. These Bitcoins are added to the Bitcoin supply at a predetermined rate of one block every ten minutes on average. The supply of Bitcoins will be depleted once miners have unlocked this number of Bitcoins. It's possible, however, that the protocol for Bitcoin will be altered to allow for a higher supply.
How Can I Get Bitcoin?
To begin, go to the WazirX website and register. After that, you will receive a verification email. The link received by verification mail will only be available for a few seconds, so make sure you click it as quickly as possible. This will successfully verify your email address. The following step is to set up security, so choose the best solution for you. After you've set up the security, you'll be given the option of continuing with or without completing the KYC process. Following that, you'll be sent to the Funds & Transfers section, where you can begin depositing Bitcoins into your wallet. You may also use INR to fund your WazirX Bitcoin wallet and then use it to purchase Bitcoin.
Is Bitcoin Safe And Legal In India?
In 2020, the Supreme Court of India lifted the RBI’s restrictions on cryptocurrencies. According to the Supreme Court, the existence of Bitcoin or another cryptocurrency is unregulated but not unlawful. The verdict has greatly aided the world of digital money in the country. To put it another way, investing in Bitcoin is perfectly legal, and you may do so through various apps and traders.
Is Bitcoin Cash A Good Investment?
Bitcoin Cash is a hard fork of Bitcoin formed in 2017 to address Bitcoin's scalability and challenges. Bitcoin Cash seeks to make global transactions faster, cheaper, and more secure. Bitcoin Cash is now accepted by thousands of online and offline businesses all over the world. Studied correctly, Bitcoin Cash may be an investment worthy of consideration.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
