Auxiliary Proof of Work
How AuxPow affected Dogecoin mining
Auxpow, as many will call it, is also referred to as merged mining and is simply the process of simultaneously mining more than one blockchain. The miner inputs the same hash power in creating blocks on several chains, earning accumulated rewards on all the chains and passing the energy cost for each.
After months of deliberation by community members and founders, Dogecoin eventually took the bold step and merged with Litecoin. This might look hazy to you. Here is an illustration;
Merge mining is like a modern-day lottery, where miners constantly have to generate lottery tickets. If a miner ticket matches the winning number, they get rewarded automatically. Before taking this bold step, mining for the two cryptocurrencies was mutually exclusive -miners could not do both simultaneously. This changed after Dogecoin enabled the merged mining algorithm. The Dogecoin lottery began accepting tickets from both groups of miners. This increased Dogecoin’s network total hashrate by tenfold because the entirety of Litecoin miners also began mining it since they could generate extra revenue without extra effort.
Benefits of the implemented algorithm
- ⮚ The Auxpow algorithm averted the security threat on Dogecoin.
- ⮚ The coin experienced a spike in price, as its market capitalization doubled compared to previous weeks before the implementation of the algorithm.
The only miscalculation with this implementation was the delusion that everyone would be happy as both hash rate and price were rising. Though everyone was delighted, all miners who mined before the performance suffered a loss.
Before the Auxpow algorithm, miners could easily mine $0.99 worth of Litecoin or $1.33 worth of Dogecoin daily. However, mining the $0.78 price of Litecoin will also yield a $0.26 value for Dogecoin. This is a good thing for new miners, but former dedicated Dogecoin miners will notice a significant drop in their daily revenue.
It is even worse for Dogecoin miners whose sole aim is accumulating coins by selling. They can now only mine one-tenth of what they could mine in the past. But, aside from this lot, other parties are happy with the algorithm.
Conclusion
Auxpow/merged mining is a good thing, and it is commendable that Dogecoin took the bold step of implementing its algorithm. Before this implementation came into play, only a few knew of the existence of Dogecoin as a cryptocurrency. But that all changed after the performance of the algorithm. Even notable people like Elon musk are now involved with the coin. Despite the few unhappy about this development, the majority are confident that they are a step closer to the moon.
