Taking a Deep-Dive into Merged Mining

  • The specification and preparation of the data linked to (or included in) the block header of the parent, e.g., a hash of the child block header.
  • The implementation of the verification logic in the client of the child blockchain, i.e., the child blockchain must be able to verify the PoW of the merge-mined blocks accepted from the parent chain(s).
  • In case the PoW solution of the parent block meets the difficulty requirements of the parent cryptocurrency, miners create a regular parent block following the normal mining procedure.
  • Independent thereof, if the PoW solution of the parent block meets the difficulty requirements of any of the child blockchains, the respective child block is considered valid and can be published in that child’s network.
Structure of merged mined blocks in Namecoin. The block hash of the to-be-mined Namecoin block is included in the coinbase field of the Bitcoin block. Once a fitting PoW solution is found, information from the Bitcoin block header and the coinbase transaction are included in the Namecoin block. Note: the Bitcoin Merkle tree branch is necessary to verify that the included coinbase transaction was part of the respective Bitcoin block.
Process of merged mining as performed by miners when merged mining Namecoin with Bitcoin. Note: for simplification and based on real-world observations we assume the PoW difficulty required by Bitcoin is higher than the PoW difficulty required by Namecoin.
Overview of merged mining in Bitcoin with Namecoin. Assuming lower PoW difficulty requirements, Blocks accepted in Bitcoin will be accepted in Namecoin. However, even blocks missing the difficulty target for Bitcoin, can still meet the requirements for Namecoin, as shown for BTC Block 2’. Furthermore, as depicted for NMC Block 3 and 4, a single BTC block can be referenced my multiple NMC blocks, if numerous solutions meeting NMC’s difficulty are found in the process of mining.
Visualization of a Merkle tree used when merge-mining multiple child cryptocurrencies in parallel. For Namecoin to be able to verify that the respective block hash is contained in the Merkle tree at position 7, hashes of the fields 8, 4 and 2 (colored in grey) must be provided in addition to the root hash (0). Furthermore, the order in which to apply the given hashes (in our case “right”, “right”, “right”) must be included.

Research Papers on Merged Mining

Other Related Work

  • L. Anderson, R. Holz, A. Ponomarev, P. Rimba, and I. Weber. “New kids on the Block: An Analysis of Modern Blockchains”. PDF
  • https://github.com/namecoin/wiki/blob/master/Merged-Mining.mediawiki#Goal_of_this_%20namecoin_change
  • A. Narayanan, J. Bonneau, E. Felten, A. Miller, and S. Goldfeder. “Bitcoin and Cryptocurrency Technologies: A Comprehensive Introduction”. Princeton University Press, 2016
  • Rootstock Whitepaper. PDF
  • A. Back, M. Corallo, L. Dashjr, M. Friedenbach, G. Maxwell, A. Miller, A. Poelstra, J. Timón, and P. Wuille. “Enabling Blockchain Innovations with Pegged Sidechains”. PDF

Acknowledgements

Disclaimer

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Co-Founder & CEO @ Interlay. PhD @ Imperial College London

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Alexei Zamyatin

Alexei Zamyatin

Co-Founder & CEO @ Interlay. PhD @ Imperial College London

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