What Is Merged Mining? How One Miner Earns Multiple Coins

How merged mining works

A parent chain (Litecoin, in the Scrypt world) defines the block being mined. Auxiliary chains such as Dogecoin accept a proof of work done on the parent chain as valid proof for their own blocks, provided the parent block's header commits to the auxiliary block. So a miner hashing a Litecoin block candidate is simultaneously working on Dogecoin's, and can find a valid solution for either or both.

The result: one set of hardware, one electricity bill, several income streams. The Scrypt family in particular — Litecoin with Dogecoin, Bellscoin, Dingocoin, Shibacoin and Pepecoin — is commonly mined this way.

Why chains adopt it

Smaller chains gain security by piggybacking on a larger network's hashrate, which makes attacks on them far more expensive than their own mining base could support. Miners gain extra rewards at almost no additional cost.

What it means for miners

• Estimates are per coin. Each chain has its own difficulty, block reward and price, so expected rewards are calculated separately and added together — while power is counted once
• You need an address for each coin where the pool pays out, ideally in a wallet you control
• Pool support varies. Fees and payout rules can differ per coin, so check the details

Caveats

Merged mining doesn't create free money: rewards depend on each network's difficulty, the pool's payout scheme, luck and prices, and can change. It makes the same hashing work count more than once — it is not a guarantee of profit.