Why Slush Pool supports merged mining of RSK smart contracts

It’s not easy to turn open source software into a viable business. At Braiins, we’ve been lucky enough so far that we don’t have to do that. Our open source projects, such as Braiins OS, bOS, and Stratum V2, were all developed with the proceeds from operating Slush Pool.

Although we do not directly profit from those open source projects, it is certainly economically justifiable to develop them because we ourselves are stakeholders in Bitcoin and all of these projects share a common end goal of making Bitcoin better .

This pursuit directly influenced our decision to support merged mining for currencies using the SHA-256 encryption algorithm while supporting Bitcoin mining in our mining pool. We did not follow the same path as other major mining pools for merged mining, so people often ask us why. This article is the long-awaited explanation of why we support merged mining for RSK smart contracts instead of merged mining for other sidechains.

What is merged mining?

First, a brief introduction to what merged mining is.

Merged mining is the process of mining blocks on multiple blockchains simultaneously using the same proof of work (PoW). In other words, merged mining allows miners to receive rewards in multiple cryptocurrencies at the same time without requiring more mining hardware and electricity.

It is important to note that merged mining is only possible if both blockchains use the same mining algorithm. For Bitcoin, this algorithm is SHA-256d. You can read a more detailed explanation of merged mining here.

Is merged mining worthwhile? What determines it?

Every week, we receive tweets and other messages suggesting that we should merge mine Elastos (ELA) or Vcash (XVC). For those of you asking, rest assured that we are aware of the existence of these projects and that they can be merge-mined with Bitcoin.

The reason we do not support merged mining of Elastos or Vcash (XVC) is that neither coin is valuable enough to be worth mining. Neither coin will significantly change the income of our mining pool or miners. At the same time, neither project has made any contribution to the Bitcoin ecosystem.

If the above two statements would always be true, there would be no incentive for us to merge-mine Elastos, Vcash, or any other blockchain. If all the people (or bots) telling us on social media that they want us to join merge-mining support for Elastos were actually using it, then it might be worth mining. But a quick look at the Elastos blockchain explorer will notice that there are usually only a few transactions per minute on the network.

We don’t mean to say that we are totally against merged mining. On the contrary, we have supported merged mining of both coins for several years. However, while one of the projects, Namecoin, is fading into irrelevance, the other one shows great potential. That’s why we want to discuss it.

Why does Slush Pool support RSK smart protocol merged mining?

When we started supporting merged mining of the RSK (Rootstock) smart contract in 2018, its value was close to zero. Its small reward was negligible compared to the miners’ expenses, and we didn’t even expect it to become more valuable in the near future.

Although it started out like above, the decision to start supporting merged mining on the RSK (Rootstock) smart contract was an easy one to make.

RSK builds a smart contract function on top of Bitcoin technology. In other words, it enables more complex transactions to be carried out directly on the Bitcoin blockchain, but these transactions are paid in Bitcoin instead of other currencies.

If RSK is successful in the long term, it will mean that a smart contract platform similar to Ethereum can be built securely and scalably on top of Bitcoin. Needless to say, this will add a lot of value to the Bitcoin ecosystem.

RSK makes Bitcoin better . Just like Braiins OS, bOS and Stratum V2. Even before considering RSK has a large enough reward and merged mining is economically viable in the short term, RSK is worth supporting.

Growth of the RSK Smart Protocol

Fortunately, RSK has made a lot of progress since we started supporting it in 2018. In September 2019, merge-mining the RSK smart contract was more than twice as profitable as mining any other coin.

If it continues to grow, we will soon be able to increase the rewards we send to our miners by including RSK merge-mining rewards. At the same time, more complex use cases for Bitcoin will be enabled, further increasing its fundamental value.

What’s good for Bitcoin is good for Bitcoin miners.