Binance Research, the research arm of the world’s largest cryptocurrency exchange recently released a report titled “Case Study: Merged Mining in Dogecoin and Litecoin”, which talked about specific methods for the cryptocurrencies to survive their upcoming block reward halvings.
The research primarily focused on the concept of merged mining, a form of mining that transfers work from parent blockchain to child blockchain using the Auxiliary Proof of Work principle. Binance stated:
“Merged mining refers to the act of mining two or more cryptocurrencies at the same time, without sacrificing overall mining performance. Essentially, a miner can use their computational power to mine blocks on multiple chains concurrently through the use of what is known as Auxiliary Proof of Work (AuxPoW).”
Binance focused on how Dogecoin and Litecoin, two popular cryptocurrencies, have witnessed their parameters getting a boost after the implementation of merged mining. Both Litecoin and Dogecoin saw a significant correlation with Bitcoin in terms of monthly hashrate changes. The data showed that while the LTC/BTC pair had a correlation coefficient of 0.95, the LTC/BTC pair and the DOGE/BTC pair held coefficients of 0.3 and 0.35, respectively.