Combined Mining is the process of mining two different cryptocurrencies at the same time, used, in particular, to secure the network. As recent 51% attacks have shown, in proof-of-work networks, players who control large hashing power can do a lot.
Combined mining can be a solution to protect a young network from such an attack, until it becomes large enough to collect more than half of the computing power in one hand. In this article we will describe how combined mining works, let's talk about its advantages and disadvantages and see which projects it is used in.
First of all, cryptocurrencies participating in combined mining should have the same hashing algorithm. Popular algorithms are SHA-256 (Bitcoin), Scrypt (Lightcoin) and Equihash (Zcash). In addition, in the combined mining, the parent and child chains are distinguished, and the parent blockchain may be unaware of the auxiliary one. A child chain is a blockchain that “matches” with the parent. Unlike the latter, he needs an additional mechanism for registering the mining of the parent blockchain.
How it works
Let's look at a generalized example of a combined mining process for two blockchains from a miner's point of view. We mine two blockchains: the Parental Chain and the Child Chain.
Before mining, we collect a block of transactions for each chain. The Child Chain set includes transactions related to the chain, and the Parent Chain set includes standard transactions plus a transaction containing the hash of the Child Chain block just created.
Now go to the mining. As already mentioned, the same hashing function is used in the Parent Chain and Child Chain, and the Developers of the Child Chain have created a network that allows you to perform joint mining - you can now simultaneously solve hashing problems for both blockchains, spending not too much computing power.
While simultaneously mining two blockchains, two main scenarios are possible:
- Hash is calculated on the difficulty level of the Parental Chain.
- The hash is calculated at the complexity level of the Child Chain.
For simplicity, suppose that in our case the difficulty level of the Parental Chain will always be higher than that of the Child Chain.
1 script. You have completed the creation of the Parent Chain block and sent it to the Parent Chain network. Since you calculated the hash for the Parent Chain, and its complexity is higher than for the Child Chain, you also complete the Child Chain block and get a reward for both.
2 script. You have completed the creation of the Child Chain block by inserting the block header and hash block from the Parent Chain into it. The child chain accepts this block, because after the header and transactions there is evidence of the work done, that is, the hash and the heading of the Parent Chain. Thus, you get a reward for mining the Child Chain.
Such a scheme has certain advantages, but many teams do not use it, and there are reasons for that too.
pros
Combined mining saves computational power, since hash functions are considered for both networks simultaneously. The proof of the job is simply presented to two different recipients, and thus, the auxiliary blockchain gets increased hashing power. That is, combined mining can be used to leverage the hashing power of a larger parent chain. Ideally, the miner has no problem moving to the combined production, because he gets more for the same amount of work. Thus, for a new blockchain, this may be a convenient way to protect against an 51% attack.
The parental blockchain is not affected by this - to participate in the combined mining, it is not required to do anything other than adding an additional blockchain block hash to its blocks.
Cons
Combined mining is difficult to implement, and many teams find that its benefits do not pay off.
In addition, miners need additional work - to participate in the combined mining, you need to run an additional program and administer another blockchain, and if it’s not a single miner, but a large pool operator, this can be a difficult job.
Projects using merged mining
Surprisingly, this mechanism has so far been implemented in relatively few projects. Here are a few of the most notable:
Namecoin
Namecoin became the first fork of Bitcoin, and it was here that combined mining was used for the first time. Since SHA-256 is used in both networks, the developers decided to rely on Bitcoin as the parent blockchain. However, now the project is not too active.
Dogecoin
The Dogecoin community was split up, and the developers decided to start joint mining with Lightcoin. The Reddit website still has a branch where Charlie Lee answers community questions and offers arguments for joint mining.
Elastos
The young blockchain project Elastos also combined mining with Bitcoin. This project uses additional blockchains, which, according to the team, will benefit from the distributed trust system associated with such mining technology.
The future of united mining
This is not an ideal strategy, but for a small blockchain project, it can be successful, allowing you to get some fame and protect yourself from seizing power. There is growth potential here, but so far the need for additional development has been deterred by most of the teams.
On the other hand, with the increase in the number of attacks in networks with low hashing power, it is possible that this mining method will become more and more popular. One can cite the example of Dogecoin - it’s not certain that this factor played, but it definitely made some contribution to the flourishing state of cryptocurrency.