As there are many terms to such a large project like Elastos and the Cyber Republic, we’ve decided to build a growing glossary of terms that can help the less technically acquainted understand better what the tech means and the impact it could have.  This week we’re focusing on Elastos’ Auxiliary Proof of Work, also known as Merged Mining.

Term: Auxiliary Proof of Work, a.k.a. Merged Mining

“Merged mining…allows the miner to direct his hashing power into mining two cryptocurrencies at once, resulting in higher hash rates for both of them…[you need] two cryptocurrencies that have the same hashing algorithms. SHA-256, Scrypt, Equihash are just some of the most popular PoW algorithms out there currently used by major cryptocurrencies like Bitcoin, Litecoin, Zcash, etc. Popular merged mining pairings include:

“…Auxiliary Proof-of-Work is the relationship between two blockchains where one trusts the other’s work and accepts AuxPOW blocks…For the parent chain, there is almost no difference between a block mined the regular way and a block mined as part of a merged coin mining process. That’s why there is no need to modify the code of the daemon (also called full-node, or client) of the parent blockchain. For the auxiliary chain, a block mined the normal way (i.e a regular block) will be accepted with the original code. However, a block mined as a part of a merged coin mining process (i.e a modified block) will require a modification of the code of the AUX daemon.

“The auxiliary blockchains Merkle root is inserted into the extra nonce section of the parent blockchain…In simpler terms, the parent chain contains the standard transactions plus a transaction with the hash that connects to the auxiliary chain block.”


Layman’s definition: 

Proof of Work is notoriously inefficient.  Mining difficulty increases or decreased to average a certain block generation rate, no matter how many miners are working.  Thus, that extra mining work (electricity and computing power) is being “wasted”, anyway. Merged Mining allows the work being done to apply to more than one chain, and thus, secure more than one chain without extra cost of power or electricity.

A 51% attack is when someone buys enough machines to take over a network–kind of like a corrupted democratic election.  With less miner hash power (in less-popular blockchains), it is easier to corrupt the system. Merged mining takes advantage of a larger network, like Bitcoin’s network in Elastos’ case, and teams up with it so that it’s harder to take over the blockchain.

The benefits are that Elastos becomes much safer to 51% attacks, as safe as Bitcoin’s network, computing power and electricity is better utilized, profitability for miners is increased, there’s no disadvantage to the parent chain (Bitcoin) as there’s no extra work added, and there’s less competition in having to choose to mine one blockchain vs another.

The negatives are that it helps major mining pools get even stronger and increasing centralization because regular people or smaller mining pools can’t compete with the larger mining pools’ hardware.

Elastos doesn’t suffer from these negatives because it has created a hybrid model of AuxPoW+DPoS, which was covered in last week’s Technical Terminology and makes the Consensus Supernodes finalize blocks.

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