Merge-mining on Bitcoin, also known as Auxiliary Proof-of-Work (AuxPoW), is a process that allows miners to mine Bitcoin and one or more auxiliary blockchains (such as Namecoin or Rootstock) simultaneously using the same computational work. In this setup, Bitcoin acts as the "parent chain," and the auxiliary blockchain is configured to accept Bitcoin's proof-of-work as valid for its own blocks.
Here's how it works:
- When a miner finds a valid block for Bitcoin, they can also submit this proof to the auxiliary chain.
- The auxiliary chain's block header includes references to the Bitcoin block, and the Bitcoin block's coinbase transaction can embed the hash of the auxiliary block.
- This process enables miners to secure multiple blockchains without expending extra computational resources, making it efficient and economically attractive.
- The auxiliary chain benefits by inheriting some of Bitcoin's security, as its blocks are validated by the same hashpower securing Bitcoin.
Merge-mining was first implemented with Namecoin and has since been adopted by other blockchains that use the same mining algorithm as Bitcoin
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