Why Slush Pool merge mines RSK (and not Elastos or Vcash)
Turning open-source software development into a sustainable business is challenging to say the least. At Braiins, we’ve been lucky enough so far that we haven’t needed to. Our open-source projects such as Braiins OS, bOSminer, and Stratum V2 have all been made possible by the revenue we’ve earned operating Slush Pool.
Although we haven’t made money from those open-source projects directly, working on them has been nonetheless economically rational. That’s because we are stakeholders in Bitcoin and, ultimately, all of these projects share a common purpose of making Bitcoin better.
As it happens, this approach also carries over directly to our decision making about merge mining other SHA-256 coins with Bitcoin. We haven’t followed the same path as other major pools when it comes to merged mining, and it’s something we get asked about quite often. This article is a long-overdue explanation of why we merge mine RSK, but not some of the other options that are out there.
What is Merged Mining?
First, a quick lesson on what merged mining is.
Merged mining is the process of using the same proof of work to simultaneously mine blocks on multiple blockchains. In other words, merged mining allows miners to earn rewards in multiple cryptocurrencies without spending any extra on different mining hardware or on more electricity.
Note that this can only be done if the two blockchains share a common mining algorithm. In the case of Bitcoin, it’s SHA-256d. For a more detailed explanation of how merged mining works, you can read here.
What Makes Merged Mining Worthwhile?
Every week, we receive tweets and other messages telling us we should merge mine Elastos or Vcash. For those sending the messages (see below), rest assured that we are aware of these projects’ existence and that they can be merge mined with Bitcoin.
The reason we still do not merge mine Elastos or Vcash is that there isn’t enough value in either to make it worthwhile. Neither coin would noticeably change the revenue of our miners. At the same time, neither project contributes anything back to the Bitcoin ecosystem.
As long as the two statements above are true, we have no incentive to begin merge mining Elastos, Vcash, or any other blockchains. For that matter, if all the people (and bots) who @ us on social media telling us to merge mine Elastos were actually using it, perhaps there would be enough value there for it to make sense. But a quick glance at the Elastos blockchain explorer shows that there are typically only a couple transactions per minute on the network.
It’s not that we are completely against merged mining, though. On the contrary, we’ve been merge mining two coins for multiple years now. But where one of those projects, Namecoin, is trending down into irrelevance, the other project is on the cusp of something potentially enormous. And that’s why we want to talk about it.
Why Slush Pool Merge Mines RSK
When we began merge mining RSK (rootstock) in 2018, it was worth practically nothing. The rewards were far too small to make a difference in our miners’ payouts, nor did we have any expectation for it to become more valuable in the near future.
With the above being said, the decision to start merge mining RSK was an easy one to make.
RSK is building smart-contract functionality on top of Bitcoin. In other words, it’s enabling more complex transactions than are possible directly on the Bitcoin blockchain, but these transactions are paid with BTC rather than a separate coin.
If RSK succeeds long-term, it will mean that Bitcoin has an Ethereum-like smart contract platform built on top of it in a secure, scalable way. Needless to say, that would add a lot of value to the Bitcoin ecosystem.
RSK can make Bitcoin better. Just like Braiins OS, bOSminer, and Stratum V2. That makes it worth supporting, even before the rewards are large enough to incentive merged mining economically in the short-term.
The Growth of RSK
Fortunately, RSK has come a long way since we started supporting it back in 2018. In September of 2019, it was over 2x more profitable to merge mine RSK than any other coin.
If this growth continues, we will soon be able to increase the payouts we send to our miners by including the rewards earned through merge mining RSK. Meanwhile, more complex use cases for Bitcoin will be enabled, driving its fundamental value up.
What’s good for Bitcoin is good for Bitcoin miners.
