One Rig, Two (or More) Payouts
Merged mining is a clever trick that lets a single miner contribute work to multiple blockchains at the same time — and collect rewards from all of them. The classic example is Litecoin and Dogecoin: both use the Scrypt algorithm, and since 2014 any Litecoin miner can choose to also mine Dogecoin for essentially zero extra cost.
How It Works
The parent chain (Litecoin in this case) runs its normal mining process. The auxiliary chain (Dogecoin) accepts valid Litecoin-style proofs as valid Dogecoin proofs, provided the block header references a Dogecoin block. A miner who finds a valid hash wins both blocks at once.
- Same electricity bill
- Same hardware
- Two coins earned per successful hash
Why It Exists
Auxiliary chains get to piggyback on the security of the parent chain. Litecoin has vastly more hash power than Dogecoin would ever attract on its own, so by accepting merged-mined blocks, Dogecoin inherits all of Litecoin's security at no cost to Litecoin miners.
Merged mining is the rare deal where everyone wins: miners get a second revenue stream, the auxiliary chain gets more security, and the parent chain loses nothing.
What This Means For You
Our Scrypt plans automatically mine Litecoin and Dogecoin in parallel. When you see a DOGE-labelled plan on our plans page, what you are really renting is the Dogecoin reward slice of a merged Scrypt operation. Every time our hardware wins a Litecoin block, your DOGE wallet gets its proportional cut of the corresponding Dogecoin block.
Same hash power. Two coins. No extra cost. That is the quiet beauty of merged mining.