The Magic of Merged Mining: How to Earn Free Dogecoin
In the world of physics, you can't get something for nothing. But in the world of crypto mining, you almost can. It is called Merged Mining (or Auxiliary Proof of Work / AuxPoW).
This is the technology that secures the Dogecoin network and makes Scrypt mining (Litecoin) incredibly profitable.
How It Works
Imagine you are a security guard.
- Normal Mining: You are paid to guard Building A (Litecoin). You walk around Building A checking locks.
- Merged Mining: Building B (Dogecoin) is built right next door. The owners of Building B say: "Hey, while you are walking around guarding Building A, can you just glance at Building B too? We will pay you extra."
You don't have to do any extra walking. You don't need extra energy. You just include the data for both buildings in your report.
The Technical Explanation
When you mine Litecoin (the "Parent Chain"), your miner does the work to solve the Scrypt algorithm.
Dogecoin (the "Child Chain") accepts that same work as valid.
So, every hash you produce counts as a lottery ticket for BOTH the Litecoin block reward and the Dogecoin block reward.
Why This Saved Dogecoin
Years ago, Dogecoin had very low hashrate and was vulnerable to attacks. By enabling Merged Mining with Litecoin, Dogecoin inherited the massive security of the Litecoin network. Now, to attack Dogecoin, you would have to attack Litecoin too, which is nearly impossible.
Can I Merged Mine Bitcoin?
Currently, the biggest coin merged-mined with Bitcoin is Namecoin (NMC) and Elastos (ELA) or RSK (Rootstock).
While these aren't as famous as Dogecoin, they provide extra revenue for large pools.
At Gokby, we are constantly monitoring the profitability of merged mining side-chains to see if we can add extra "free yield" for our Bitcoin miners in the future.
