Explained: Merged Mining & Its Working

What Is Merged Mining?

Let’s imagine you could earn two salaries by doing just one job. Sounds great, right? That’s basically what merged mining is in the world of cryptocurrency.

In simple words, merged mining is when a miner can work on two different cryptocurrencies at the same time without using any extra energy or hardware. It’s like hitting two birds with one stone. You’re doing the same amount of work, but two separate blockchain networks reward you. Cool, right?

1. A Quick Reminder: What Is Mining?

Before we dive deeper, let’s go back to basics. In crypto, mining is the process of using computers to solve complex math problems. When your computer solves one of these problems, it gets to add a block to the blockchain. As a reward, you earn some crypto like Bitcoin, for example.

Usually, when you’re mining, you’re only working for one coin at a time. But merged mining lets you work for two coins at once using the same process.

2. How Does That Even Work?

It works because of something called auxiliary proof of work (or AuxPoW). Don’t let the term scare you here’s what it means:

Let’s say you’re mining Bitcoin. Now, there’s another smaller coin like Namecoin that also wants security but doesn’t have enough miners. Merged mining allows both Bitcoin and Namecoin to accept the same work from your mining machine. You’re basically helping two coins at once and getting rewarded by both. That smaller coin (Namecoin in this case) trusts the work you’ve done for Bitcoin and says, “Great job! Here’s a reward for me too.”

3. Is This Allowed?

Yes, it’s totally legit. Both blockchains involved agree to the merged mining process. There’s no cheating or shortcut here. It’s simply a smart way to do more with what you already have.

4. Why Was Merged Mining Created?

Merged mining was invented to help smaller or newer cryptocurrencies stay secure. Big coins like Bitcoin have thousands of miners keeping their networks safe. However, smaller coins can be easy targets for attacks because they don’t have enough people mining them. With merged mining, they can borrow security power from a bigger coin without taking anything away from it.

5. An Everyday Example

Think of merged mining like a pizza delivery driver who also delivers drinks for a soda company on the same route: one trip, two payments. The driver isn’t doing double the work just doing the same trip more efficiently and getting paid by two companies.

How Does Merged Mining Actually Work?

Now that you know what merged mining is, you might be wondering, “Okay, but how do you mine two coins at once? Doesn’t that get messy?” The good news is, it’s not as complicated as it sounds especially if we break it down in plain, everyday language.

Let’s walk through how merged mining actually works behind the scenes.

1. One Machine, Two Jobs

When merged mining, you’re still using the same mining hardware like your ASIC machine or mining rig. You’re not doing extra physical work. Your machine is solving one main problem, but it’s submitting that solution to two different blockchains.

Think of it as taking one test in school but getting credit for two different classes. You didn’t study twice. You just used your one test to check off two subjects.

2. The Main Chain and the Sidekick Chain

In merged mining, there are usually two cryptocurrencies involved:

• The parent chain: This is the big one like Bitcoin or Litecoin.
• The auxiliary chain: This is the smaller coin like Namecoin or Dogecoin.

Your mining machine is primarily focused on solving blocks for the parent chain. That’s where the heavy lifting is happening. But once your machine solves a block for the parent chain, it wraps that solution in a way that also works for the auxiliary chain.

That’s where Auxiliary Proof of Work (AuxPoW) comes in. It’s like a translator between the two chains, making sure both understand and accept your solution.

~ What Happens When You Find a Block?

Let’s say your mining rig finds a solution that meets the requirements of the parent chain (like Bitcoin). That same solution is also sent to the auxiliary chain (like Namecoin), and it says:

“Hey, I found a valid block while mining Bitcoin. Does this work for you too?”
If the auxiliary chain accepts it, then bingo! You get a reward from both chains.
If it doesn’t meet the smaller chain’s rules, that’s okay. You still get the main reward. Nothing is lost. You’re not wasting energy either way.

~ Do You Need Special Software?

Yes, merged mining needs a bit of special setup. You’ll need mining software that supports merged mining, and usually, you’ll join a merged mining pool. The pool takes care of most of the technical work and distributes the rewards fairly among the miners.

Most mining pools that support merged mining have easy-to-follow instructions. If you’ve already done some regular crypto mining, it won’t feel too different.

Why Would Miners Want to Do Merged Mining?

If you’re a miner, one big question probably comes to mind: “What’s in it for me?” After all, setting up merged mining sounds like an extra step. So why would someone go out of their way to mine two coins at once?

Let’s break it down into simple reasons why merged mining can be a great deal for crypto miners.

1. Double the Rewards, Same Effort

Let’s start with the obvious benefit more rewards. With merged mining, you can earn rewards from two blockchains at once using the same hardware and electricity. That means no extra cost, no extra power, and no extra heat from your mining machines.

It’s like going to work and getting paid by two companies for the same hours you already worked. You’re not putting in overtime, but you’re getting two paychecks.

So, if you’re mining Bitcoin and also getting rewarded with Namecoin, you’re boosting your income without spending more on power or machines. For miners trying to increase profits, this is a no-brainer.

2. Better Use of Idle Hash Power

Sometimes, especially during times of low network difficulty, your mining machines might not be working at full capacity. That’s where merged mining shines. It helps you put your idle or extra hash power to work.

Instead of letting it go to waste, you can direct that power toward a secondary coin. You don’t lose anything, but you stand to gain extra crypto. It’s like having an unused room in your house and deciding to rent it out you’re already paying for the space, so why not get something back from it?

3. No Risk to the Main Coin

Here’s a common worry: “Will merged mining mess up my main mining process?” The answer is no.

The parent chain (like Bitcoin) doesn’t even notice you’ve merged mining. It gets all the work it needs, and nothing changes. There’s no risk of losing rewards or having errors in your mining.

In fact, the merged mining process is built in a way that never hurts the main chain. So you can rest easy knowing you’re not trading safety for profits.

4. Helping Smaller Coins

This might not be a big money reason, but it’s worth mentioning. When you merge mine, you’re also supporting smaller coins that may not have enough miners on their own.

These coins rely on merged mining for security and network strength. By mining them alongside a big coin, you’re helping build up their ecosystem. And who knows? That small coin could blow up in value later on. You might be collecting rewards today that are worth much more tomorrow.

5. Easy Setup with the Right Pool

Thanks to mining pools, merged mining isn’t as tricky as it sounds. Many pools already support merged mining and handle the technical side for you. They split the rewards fairly, and you get your cut without needing to micromanage every detail.

If you’re already part of a mining pool, check if they support merged mining. You might only need to update a few settings to start earning more.

Which Coins Support Merged Mining?

Now that you know what merged mining is and why miners like it, let’s dive into the coins that actually support this setup. Not all cryptocurrencies are built to handle merged mining, so let’s talk about the ones that do and why it matters.

1. Popular Examples

Here are a few coins that support merged mining:

• Namecoin: This was the first coin to support merged mining with Bitcoin. It’s a lesser-known coin that’s focused on decentralized domain name registration. Since it shares the same hashing algorithm (SHA-256) as Bitcoin, it pairs well for merged mining.
• Dogecoin + Litecoin: Dogecoin used to have its own network, but now it’s merged with Litecoin. They both use the Scrypt algorithm so that miners can earn both DOGE and LTC in one go.
• Elastos: This coin allows merged mining with Bitcoin too. Elastos is a project focused on building a secure internet.
• Syscoin: Another SHA-256 coin that supports merged mining with Bitcoin. Syscoin focuses on combining blockchain and e-commerce.

2. Why These Coins?

So why do these coins choose to allow merged mining? It mostly comes down to security. Smaller coins often struggle to attract enough miners, which makes them easy targets for attacks. By linking up with a bigger coin, they “borrow” the strong network security of the parent coin.

Instead of trying to build a giant army of miners from scratch, they team up with existing ones. It’s a smart move that benefits both sides.

3. Are New Coins Still Using Merged Mining?

Some are! It depends on the project’s goals. If a new coin wants to focus on its technology without worrying too much about early security issues, merged mining can be a lifesaver. It lets them stand on the shoulders of giants like Bitcoin or Litecoin while they grow.

4. Can You Mine Random Pairs?

No, the two coins you merge must use the same hashing algorithm. For example, Bitcoin uses SHA-256, so any coin that wants to merge mine with it must also use SHA-256. You can’t mix Bitcoin with Ethereum since Ethereum used to use a different algorithm (Ethash) and now uses Proof of Stake anyway.

What Are the Risks or Downsides of Merged Mining?

As great as merged mining sounds, nothing in the crypto world is 100% perfect. There are a few challenges and risks to keep in mind before jumping in.

Let’s look at some common downsides of merged mining.

1. Extra Setup Complexity

First off, setting up merged mining isn’t always plug-and-play. While some mining pools make it easier, it still involves a little technical know-how. You may need to configure your miner to recognize multiple blockchains and adjust your software settings.

If you’re brand new to mining, it might feel overwhelming at first. But don’t worry once you set it up, it runs pretty smoothly.

2. Auxiliary Chain Might Not Be Worth Much

Here’s a big one: the second coin you mine might not have much value.

Sure, it’s free money in a way, but if that coin has low demand or poor exchange support, it could be more hassle than it’s worth. You might even end up with coins you can’t easily sell or use.

It’s like getting a second paycheck in gift cards instead of cash it’s still something, but maybe not what you really want.

3. Potential for Centralization

Since merged mining usually involves smaller coins teaming up with big ones, it can lead to centralized control. That means a few large mining pools could dominate the smaller coin’s network.

If one pool controls too much of the auxiliary chain’s hash power, it could affect its decentralization and even open it up to risks like a 51% attack.

4. Compatibility Issues

Not every mining pool or piece of software supports merged mining. So, if you’re using a less common setup, you might run into compatibility problems. You might even need to switch pools or upgrade your software to make it work.

5. Bugs or Glitches

Since merged mining relies on sharing data between two chains, there’s always the small risk of bugs or software issues. If either blockchain updates something in its system, it might temporarily break the connection until everything is updated.

How to Start Merged Mining Step-by-Step

So you’ve read about merged mining and want to give it a go awesome! The good news? You don’t need to be a tech wizard to get started. While it may sound a little technical, setting up merged mining is actually pretty doable with a bit of guidance.

Let’s break it down into super easy steps so that even if you’ve never mined before, you’ll know exactly what to do.

Step 1: Pick Your Coins

First things first you need to pick two coins that are compatible for merged mining. Usually, this means choosing a primary coin (like Bitcoin or Litecoin) and an auxiliary coin (like Namecoin or Dogecoin) that both use the same hashing algorithm.

Here are two popular combinations:

• Bitcoin + Namecoin: Both use SHA-256.
• Litecoin + Dogecoin: Both use Scrypt.

Why does the algorithm matter? Because your mining hardware is designed to solve a specific type of math problem (hashing), both coins must speak the same “math language” for merged mining to work.

Tip: If you’re already mining a major coin like Litecoin, adding a second one like Dogecoin is often just a few clicks away.

Step 2: Choose a Mining Pool

Unless you’re rocking a massive mining farm, you’ll want to join a mining pool. This is a group of miners who work together and split the rewards.

However, not all mining pools support merged mining. So before signing up, double-check their features.

Popular pools that support merged mining:

• ViaBTC – Good for Bitcoin + Namecoin.
• ProHashing – Great for Litecoin + Dogecoin and other Scrypt coins.

When choosing a pool, look for:

• Low fees (under 2% is solid)
• Good reputation (check Reddit or BitcoinTalk)
• Easy-to-use dashboard
• Regular payouts

Step 3: Get the Right Mining Software

Next up: mining software. This is the program that connects your hardware to the pool and manages all the backend work.

~ Here are some popular options:

• CGMiner – Advanced features are good for ASIC miners.
• BFGMiner – Another great option, especially for SHA-256 coins.
• EasyMiner – Ideal for beginners; it comes with a visual interface.

~ Once installed, you’ll usually input:

• The pool’s URL (they’ll provide this)
• Your wallet address(es)
• Your worker name (if needed)
• The algorithm (e.g., SHA-256 or Scrypt)

Step 4: Set Up Your Wallets

Before you start mining, make sure you’ve got wallets ready for both coins.

Why two wallets? Because you’re earning rewards in two different cryptocurrencies, and the mining pool needs a destination to send each.

Some reliable wallet options:

• Electrum – Lightweight and great for Litecoin/Dogecoin.
• Namecoin Core – Official wallet for Namecoin.
• Trust Wallet – Mobile-friendly, supports many altcoins.

Always write down your seed phrase and keep it somewhere safe!

Step 5: Configure and Start Mining

Alright, now it’s time to bring it all together!

Here’s what to plug into your mining software:

• Pool URL (usually starts with stratum+tcp://…)
• Miner/worker ID (optional, depending on the pool)
• Both wallet addresses (primary and auxiliary coins)
• Algorithm type

Once all fields are filled, click Start or Run. If everything’s working, you’ll see your device begin solving problems and getting rewarded in both coins!

Step 6: Monitor and Maintain

You’re not done yet monitoring your mining is important for spotting issues and maximizing your earnings.

Keep an eye on:

• Hash rates – If it drops, something’s wrong.
• Pool stats – Most pools offer dashboards showing your progress.
• Payout schedules – Some pools pay daily, others weekly.
• Coin values – You might want to sell or hold depending on price trends.

Many pools let you set auto-conversion (e.g., auto-convert DOGE to BTC), but that’s totally optional.

Merged Mining vs. Dual Mining: What’s the Difference?

People often confuse merged mining with dual mining, but they’re actually very different. Let’s break down the difference in the simplest way possible.

1. Merged Mining: One Algorithm, Two Coins

In merged mining, you’re using one algorithm to mine two coins at the same time. You’re doing one piece of work and submitting it to two blockchains that accept the same type of solution.

It’s efficient, doesn’t use extra energy, and doesn’t slow down your mining.

Example:

• Mining Bitcoin and Namecoin together (both use SHA-256)

2. Dual Mining: Two Algorithms, Two Coins

With dual mining, you’re using your machine to mine two completely different coins that use different algorithms.

This does use extra energy and can stress your hardware.

Example:

• Mining Ethereum (Ethash) and TON (Blake2b) at the same time

This setup requires your GPU to handle two types of jobs. It can be profitable but also more demanding.

3. Which One Should You Choose?

If you want a low-risk, low-maintenance way to boost your rewards, merged mining is usually the better choice. It’s especially great for ASIC miners and coins that share the same algorithm.

Dual mining, on the other hand, is more suited to GPU miners looking to squeeze out extra profits with more power usage.

The Future of Merged Mining: Is It Worth It in 2025?

So, is merged mining still worth doing in 2025? Short answer: Yes if you’re smart about it.

Here’s a look at what the future might hold.

1. Still a Smart Move

Merged mining continues to be a clever way to earn more from the same hardware. As mining costs rise and profit margins shrink, getting double rewards with no extra energy is a big win.

More miners are looking for ways to maximize earnings without burning out their machines and merged mining is a solid solution.

2. Support from New Projects

Some new coins are now being built with merged mining in mind. They want the added security that comes from sharing hash power with major networks. If this trend continues, we’ll likely see more merged mining pairs in the future.

3. Better Tools and Pools

Mining pools are becoming more user-friendly, with better dashboards, auto-switching features, and merged mining support. As these tools improve, merged mining becomes more accessible even for beginners.

4. Will It Stay Profitable?

Profitability depends on the coins you mine. If the auxiliary coin has good value or future potential, merged mining is definitely worth it. But if the secondary coin crashes or becomes too niche, your rewards might not be worth the effort.

So, it pays to keep an eye on the market and adjust your strategy as needed.