The cryptocurrency market has been rife with developments and updates from almost every sector in a bid to ensure the digital asset industry goes mainstream. Binance, the Changpeng Zhao-led cryptocurrency exchange has been making news for quite some time now and the latest research from the organization touched on the latest upgrades within popular cryptocurrencies.
In the research titled ‘Case Study: Merged Mining in Dogecoin and Litecoin’, the organization talked about whether the merged mining technique followed by Dogecoin and Litecoin actually provided increased security for smaller Proof of Work [PoW] blockchains. Binance stated:
“Given that block mining rewards are halved every four years for both Litecoin and Bitcoin, merge-mining could potentially become a solution to maintain network security in the long-run as newer cryptoassets, with higher block rewards, could be merge-mined within the same pools.”
Merged mining is the process of using the work done for one blockchain on smaller child blockchains using a different variant of PoW called Auxiliary PoW. Dogecoin, the meme-inspired cryptocurrency adopted the merged mining model way back in August 2014 and within a month the digital asset’s hashrate increased by a whopping 1500 percent.
The surprising factor was that since the spike, Dogecoin’s hashrate has had a correlation of 0.9 with the Charlie Lee-led Litecoin. The research added:
“As of July 2019, nearly 90% of Dogecoin’s total hashrate comes from large Litecoin mining pools, with its blockchain processing around 30,000 transactions per day.”
Dogecoin, despite not being used as a mainstream cryptocurrency, holds strong mining pools with almost evenly distributed network hashrate. Binance report claimed that even thought DOGE was merged mined, the cryptocurrency was still a favorite among miners, sometimes even surpassing Litecoin’s figures.
Binance’s research opined that due to direct correlations within the merged mining club, the technique could potentially become a solution to maintain network security after halvings. Cryptocurrencies like Dogecoin undergo block mining reward halvings every four years and with the implementation of merged mining, new assets with a higher reward “could be merge mined within the same mining pools”. According to block halving data, Dogecoin will undergo its halving at the same time as that of Litecoin: August 2019.