As a batch of Antminer L7 (the best mining rig for LTC mining) entered the market, the LTC hashrate has edged higher, growing by nearly 20% in 15 days. ViaBTC’s Profit Calculator indicates that based on the current electricity price ($0.05), the net profit of one Antminer L7 is now is $15.1 per day. The growth of mining profit is not only driven by the constant iteration of mining rig technologies but also by the creation of merged mining.
What is merged mining?
Merged mining refers to linking one or more low-yield cryptos to high-yield cryptos for mining fueled by the same hashing power. Under merged mining, miners only have to provide one type of hashrate to earn multiple rewards. Common pairs of merged mining include BTC + NMC, LTC + DOGE, etc. In particular, the market cap of DOGE has soared after Tesla’s CEO Elon Musk repeatedly recommended DOGE last year, and its price has grown hundreds of times, which is evidence of the incredible returns of mining LTC under merged mining.
As mentioned above, when used to mine LTC, Antminer L7 generates a daily net profit of $15.1. However, if the model is employed for merged mining (LTC + DOGE), based on the officially rated hashrate of 9.5GH/s, in theory, miners would receive 270 DOGE ($0.142*270≈$38.3), in addition to the 0.145 LTC gained per day. As such, the net daily profit generated by one Antminer L7 is approximately $53.4.
According to CoinMarketCap, as of April 2, 2022, the total market cap of DOGE reached $18.92 billion, ranking 12th among all cryptocurrencies; LTC’s total market cap stands at $8.83 billion, ranking 21st.
From a technical viewpoint, what makes merged mining possible?
Simply put, in merged mining, the high-yield crypto acts as the main chain, while the low-yield token serves as a sub-chain. For instance, in the case of LTC + DOGE, the former is the main chain, and the latter is a sub-chain. Through the technology of Auxiliary Proof of Work, the sub-chain is able to validate blocks on the main chain using its hashing power without affecting the normal generation of blocks on the main chain.
Where should miners go if they want to try merged mining?
All major pools now support merged mining. For example, in ViaBTC Pool, you should first register and/or log in to your ViaBTC account. After setting up the mining machine parameters and connecting your mining rig to ViaBTC Pool, you can click on [Assets] on the top of the homepage and find locate DOGE to check the DOGE coins you have earned. The specific coin reward will be determined by your hashrate share.
Though DOGE and LTC are both based on the Scrypt algorism, back in 2014, the former (less than 40GH/s) was only 1/15 the scale of the latter (about 600GH/s) in terms of hashing power. It cost little to stage a 51% attack against DOGE, and the whole DOGE network was extremely vulnerable. Proposed by LTC’s founder Charles Lee, the merged mining of LTC + DOGE was eventually approved by the DOGE community after heated debates.
Looking back, DOGE made the right decision — after it tapped into the LTC hashrate, the network hashrate of DOGE surged by 1,500% in just one month, which drove up the cost of hacking and ensured the on-chain security of the network. Meanwhile, the additional profit of DOGE coins has now become a major source of income for miners. In this sense, merged mining yielded win-win results. At the moment, over 80% of the LTC hashrate is mining DOGE, which comes with a network hashrate of 360.83TH/s (as of April 2, 2022).
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