1.5 k views

A Complete Guide to Cryptocurrency Merged Mining

Multitudes are buying into the use of blockchain technology and cryptocurrencies over time. Unfortunately, miners usually get a harder time competing with other miners to get the chance to add a block to the chain. However, technology evolution ensures something for everyone while reducing piling congestion in primary blockchains. The issues brought about the introduction of sidechains to increase the functionality of the primary chains.

The development of sidechains is making the concept of merged mining popular. Merged mining, also known as Auxiliary Proof of Work (APoW), is where a miner can mine two digital coins. It enables the miner to utilize more than one blockchain simultaneously. When one does this, they contribute to both chains’ total hashrate, increasing both chains’ security.

The technology requires the two chains to share the same Proof of Work consensus algorithm. The concept around merged mining was developed to settle chain integrity attacks for younger chains before achieving adequate hashrate to support their security. It would be best to note that there is no compromise by increasing computational power and reducing both chains’ performance. 

How Does Merged Mining Work?

It is vital to know the basics of the process to understand how merged mining works. 

Merged mining requires the presence of the parent blockchain and secondary chains. They have to share a Proof of Work consensus algorithm, enabling miners to produce blocks in both chains. 

Mining occurs in the parent chain, oblivious to the secondary chains and their mining. Despite this, the secondary chain depends on the main one for additional security since it has a higher hash power. It also needs extra input to validate the mining in the parent chain. As a result, all blocks submitted to either of the blockchains are different.

The Merged Mining Process

To begin with, the miner has to obtain transaction sets from the mining pool for both chains. Then, the miner creates a transaction hash, which they add to the parent block header, which it ignores. Therefore, the parent chain contains both hashes of its transaction and the auxiliary block transaction, while the second chain contains only its transaction hash.

Next, the work is distributed through both chains to allow other merge miners to solve Proof of Work’s difficulty levels.

Three different outcomes are possible while solving the difficulty level. The first involves the miner achieving a higher difficulty level than the parent and auxiliary chains. The miner will then receive rewards for the main and secondary chains. 

The second outcome involves solving a lower difficulty level that is adequate for the secondary chain. In this case, the miner will only receive rewards from the auxiliary chain. 

The third situation is whereby the miner achieves a difficulty level too low for both chains. The miner must then enter a new nonce value to solve the problem until they acquire an adequate difficulty level for either chain.

Impacts of Merged Mining on Investors

Merged mining is more beneficial to miners than to investors. It provides them with a better chance to earn more without high competition. However, it offers great potential for investors in the future with the development of technology.

A few scenarios may occur with chains establishing merged mining. First, merged mining can boost a coin’s worth immediately after incorporating the APoW algorithm. In this case, we can look at the Litecoin-Dogecoin merger. A well-established currency provides a platform for a new coin to gain popularity among people. Eventually, short-term investments may work for them.

Other coins have the potential to gain popularity in the future as their development is still underway. Once their merging with a parent blockchain occurs, their value has a high chance of spiking. Nonetheless, it is vital to survey all logistics surrounding them before initiating investments to avoid losses. 

Some chains can potentially lose their value with time making them undependable for long-term investment goals. 

Benefits and Drawbacks of Merged Mining


  • Power Efficiency: The pooled mining between a parent chain and auxiliary chains does not increase the computational power required for the process. You can owe this fact to the process being simultaneous in both chains.
  • Auxiliary Chain Recognition: Since the secondary chain is relatively new compared to the main chain, it can gain popularity. Hence, their value has a chance to increase, which is significant for their growth.
  • Security: The security of both chains heightens with the mining contributing to both their hashrates. Furthermore, the auxiliary chain, which would be more susceptible to attacks, uses the main chain’s higher hash power to boost security.
  • Increased Fluidity: The chains are faster since miners clear blocks rapidly. They can also choose the coin of their choice, ensuring they are not limited to one.


  • New Attack Vectors: By empty mining blocks, miners can launch attacks without affecting both chains’ financial status.
  • Operational Costs: Setting up a merged mining network is expensive and time-consuming. It raises the question if the process is necessary.
  • Auxiliary Chain Issues: They may be overdependent on the main chain affecting its functionality. Further, miners may not have faith in the ability of the auxiliary chain to develop.

Popular Merged Mined Pairs

Below are a few of the well-known merged mined pairs today.

  • Litecoin and Dogecoin: Since it was unsustainable, the merger was launched in July 2014 to the Dogecoin crypto mining network.
  • Bitcoin and Rootstock: This merger aimed to increase the scalability and functionality of the Bitcoin network. It also increased the rewards miners get from mining on both chains.
  • Bitcoin and Namecoin: It was the first Bitcoin-merged mining project. It increased the market cap of Namecoin in a short period. After that, however, Namecoin’s value plummeted and has since been struggling to pick up. 


Merged mining holds a bright future for blockchain technology. The process that enables mining on two or more chains has great advantages to the chains and miners. For example, it will help auxiliary chains boost security, exposure, coin value, and functionality, among others. 

Bitcoin live price
price change

People raise questions about whether it is worth investing in or not due to a few issues that come along with it. The complicated process is yet to improve in many ways and give investors a chance to see the endless benefits that come along with it. Nonetheless, the outcomes of the existing merger pairs will tell in the long run.

Stay up to date with our latest articles

More posts

The 2024 Guide to Top 11 Crypto Marketing Agencies

Understand the Importance of Crypto Marketing Agencies In the dynamic world of digital currency, understanding and leveraging the power of specialized marketing is pivotal. As cryptocurrencies, NFTs, and blockchain technologies reshape our financial landscape, partnering with a proficient crypto marketing agency can be a game-changer for projects aiming for prominence. This is especially true in 2024, as the industry becomes more competitive. Let's delve into what makes these agencies indispensable. Tips for Choosing the Right Crypto Marketing Agency When exploring…

Why SolidProof Stands Out in the Blockchain Security Landscape

SolidProof - a registered security company from Germany - has announced the imminent release of an updated version of its SolidProof Automated Audit Tool (SAAT). This unique blockchain industry product supports decentralized finance (DeFi) growth, enabling projects to minimize security threats. An upgraded SolidProof App is also ready to roll out with new and exciting features, cementing SolidProof’s place in the top tier of blockchain security providers. Increased Challenges for DeFi Security Decentralized finance has evolved on top of blockchain…

Top 5 Crypto Gaming Tokens to Buy for the Next Bull Run

Crypto gaming is one of the fastest-developing sectors of the blockchain industry. In 2023, it is estimated at $7.89 billion and is forecasted to reach over $300 billion by 2030. Some see it as the next ship to onboard for lucrative long-term investments. And after a closer look at it, we can easily understand why. The strength of the crypto gaming market lies at the crossroads of several technological advances, including blockchain, cryptocurrencies, and the Metaverse. Including new economic models,…

Top 3 Crypto Casinos in 2023

Playing at crypto casinos is a widespread practice in 2023. These online platforms feature all the classic casino games, like poker, Roulette, and Blackjack, besides modern interactive slots and sports betting. Players worldwide can make crypto deposits in Bitcoin, Ethereum, and other popular cryptocurrencies for the chance to win substantial jackpots, bonuses, and rewards. If you are wondering how to choose a crypto casino, you have come to the right place. We selected three of the top crypto casinos this…

Using Open-Source Protocols for Developing Scalable Solutions on Blockchain

Blockchain technology's safe, transparent, and decentralized transaction platform might transform several sectors. However, building scalable blockchain solutions can be a challenging task.  This short guide will explore how to leverage open-source protocols to develop scalable blockchain solutions. The article aims to make it easier for developers to plan the realization of robust and secure blockchain applications.  Understanding Open-Source Protocols Open-source protocols, such as Ethereum and Hyperledger Fabric, come from organizations and are available for anyone to code for free. Unlike…

How to Leverage Arbitrage Opportunities in Crypto Markets

Cryptocurrency arbitrage has become an increasingly popular investment strategy as the crypto market grows and evolves. Arbitrage involves taking advantage of pricing discrepancies between markets or exchanges to profit.  Investors can leverage profit opportunities by understanding cryptocurrency arbitrage while managing associated risks. In this guide, we'll explore cryptocurrency arbitrage and how it works. A Bitcoin-related example will help us illustrate the concepts of this strategy. What is Arbitrage and How Does it Work in Crypto Markets Crypto arbitrage trading is…

The Different Types of Copy Trading in Crypto

Are you interested in trading cryptocurrencies but feel intimidated by the complexity of the process? Copy trading is a great way to get into crypto without needing to be an experienced trader. With copy trading, investors can benefit from the experience and knowledge of more experienced traders, allowing even beginners to succeed. How does copy trading work, and which tips do you need to know to succeed? In this article, we'll explore all aspects of copy trading in crypto. What…

How to Spot an Unsafe Crypto Exchange

Cryptocurrency exchanges have become increasingly popular as they provide a platform for people to buy and sell digital assets. Unfortunately, not all crypto exchanges are safe or reliable.  With the rise of cybercrime and fraud, you must learn to spot an unsafe crypto exchange before investing your money. This guide will help beginners identify and avoid potential risks when selecting a cryptocurrency exchange.  The Role of Crypto Exchanges on the Digital Assets Market Cryptocurrency exchanges play a crucial role in…

A Guide to the Impact of US Fed’s Interest Rates on Crypto

The US Federal Reserve's interest rate is one of the world's most influential economic indicators. These rates profoundly affect global markets and investments.  But what impact does this have on cryptocurrencies? Today, we’ll explore how Fed interest rate changes affect crypto prices and why traders need to pay attention to them. We will also discuss how quickly these rates are increasing and what this means for cryptocurrency investors.  Observing the connection between US Fed rates and crypto assets allows you…

Unveiling the ERC-4337 Account Abstraction Standard – What You Should Know

The Ethereum blockchain is always changing and adding new features to make it easier to use. One of the latest developments is the introduction of ERC-4337. This account abstraction standard promises to revolutionize how users interact with Ethereum. This guide will tell you about ERC-4337. We'll explain what it is, how it works, and the good and bad things about it. We'll also talk about why you should use this new standard for smart contracts. By the end of this…