Merged mining or combined mining is a protocol that allows two different blockchains that share the same consensus protocol and hash function to get mined together. It happens without loss of performance and maintaining a high level of security.
Merged Mining Background
The notion of merged mining came to light in early 2014, with the Auxiliary Proof of Work release. The technology permits work done in a PoW blockchain network to be utilized as proof of work on another blockchain network for block mining.
AuxPoW first got implemented in the blockchains of Bitcoin and Namecoin. It was made feasible by the fact that both blockchains use the SHA-256 mining algorithm. It is one of the essential requirements of this protocol; blockchain must use the same protocol, or it is impracticable. Developers then continued the development of AuxPoW in Dogecoin and Litecoin. In this scenario, both networks use the scrypt method for block mining.
How Merged Mining Works?
There will always be a blockchain network that functions as the primary network (parent blockchain) and another as an auxiliary network (auxiliary blockchain). Consequently, there will always be a blockchain network in which the miner is responsible for the entire process of calculating and mining the block. In another network, these processes get accepted as proof of work for block mining.
It is well demonstrated in Bitcoin by the network Namecoin y RSK. In these circumstances, Bitcoin is the primary network, and miners perform the mining activity. Namecoin and RSK are ancillary networks that accept the Bitcoin network’s work as genuine.
For the networks participating in merged mining to accept the procedure, the primary blockchain network must permit the inclusion of arbitrary data in the headers of mined blocks. In contrast, the auxiliary network must provide a verification procedure to demonstrate that miners made mining efforts on the leading blockchain network.