The Flexibility of Bitcoin Mining Rigs
Bitcoin mining rigs aren't limited to mining BTC alone—they can also mine BCH or BSV. However, much like not being able to "serve two masters," miners must choose one among these options.
Joint mining revolutionizes this approach. Take LTC (Litecoin) and DOGE (Dogecoin) as prime examples: the classic golden duo of joint mining. Following the LTC halving in August, most LTC mining pools supporting joint mining have adopted policies like "mine 1 LTC, receive 2000 DOGE." This resembles an airdrop—essentially free tokens.
A Brief History of Joint Mining
Joint mining traces back to 2011 with Bitcoin and Namecoin (NMC). Fast forward to today, and the list of altcoins partnering with Bitcoin could form a basketball team. Beyond Namecoin, notable partners include:
- Elastos (ELA)
- Emercoin (EMC)
- Syscoin (SYS)
- Vcash
▲ Token data collected on 2019/8/28. Gifting rates vary across pools; shown here are typical figures.
The Current State of Joint-Mined Altcoins
Most altcoins using joint mining (except Elastos) rank beyond the top 100 in market cap. While some were once prominent, their ecosystems and use cases now face challenges.
Moreover, the reward ratios of these "free" altcoins to Bitcoin are marginal at best. Their liquidity—evident from low trading volumes—further highlights their declining appeal.
How Does Joint Mining Work?
The Parasitic yet Prosperous Life of Dogecoin
In 2014, Dogecoin’s hashrate plummeted to 1/15th of Litecoin’s, making it vulnerable to attacks (costing just $430). Following advice from Litecoin creator Charlie Lee, the Dogecoin community reluctantly adopted joint mining with Litecoin.
Technically, Litecoin acts as the main chain, while Dogecoin becomes the auxiliary chain. Through Auxiliary Proof of Work (AuxPoW), mining nodes can simultaneously produce blocks on both chains without extra effort—sometimes without even realizing they’re mining Dogecoin.
Requirements for Joint Mining
- Shared Consensus Algorithm: Both chains must use the same algorithm (e.g., Scrypt for LTC/DOGE).
- Protocol Upgrades: Auxiliary chains may require hard forks to enable joint mining.
The experiment succeeded: Dogecoin’s hashrate surged by 1500% within a month. Today, ~91% of Litecoin’s hashrate also mines Dogecoin. Notably, Elastos could theoretically joint-mine with BCH/BSV—potentially harnessing their combined hashrate.
Yet, despite its success, joint mining remains niche. Why?
- Operational Costs: Miners incur setup/maintenance fees (e.g., configuring wallets).
- Centralization Risks: New coins risk being crushed by larger networks.
Can Joint Mining Rescue Struggling PoW Coins?
The Decline of PoW Altcoins
In 2019, PoS coins thrived while new PoW projects dwindled. Challenges include:
- No ASIC Support: GPU-mined coins face liquidity issues.
- 51% Attack Risks: Small networks are easy targets.
Some GPU-mined "community coins" (e.g., Imagecoin, TurtleCoin) gained traction—even delivering 100x returns. But their long-term survival hinges on sustained hashrate, which is increasingly precarious with cloud-mining platforms lowering attack costs.
The Future of Joint Mining
With Bitcoin’s 2020 halving, PoW altcoins risk being "overshadowed." If prices collapse, miners will flee—making joint mining a potential last resort for coins teetering on irrelevance.
FAQs
1. Which coins currently use joint mining with Bitcoin?
Besides Namecoin, Syscoin, Emercoin, and Vcash are key examples.
2. Is joint mining profitable for miners?
Marginal profits from altcoins often don’t justify the setup effort.
3. Can any PoW coin adopt joint mining?
Yes, but it requires matching algorithms and community consensus.
4. Why did Dogecoin’s joint mining succeed?
It leveraged Litecoin’s established hashrate, boosting security and adoption.
5. What’s the biggest risk for joint-mined coins?
Dependence on a larger chain’s miners, who may abandon auxiliary chains.
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Sources: BitpushNews, Binance Research