Today DMND and RootstockLabs announce a new feature rollout intending to further the decentralization of Bitcoin mining. The new feature uses Stratum V2 to enable miners at the pool engaging in their own block template construction to also handle the selection and inclusion of merge-mined block commitments from the Rootstock (RSK) sidechain as well.
Merge-mining is a process by which multiple blockchains can share, or “reuse”, the same POW from the same set of miners. One blockchain, the child chain, structures its block headers to include the headers of the parent chain, i.e. the hash of the child chain’s block header is actually included inside a parent chain block (usually in the coinbase transaction), and software for the child chain is aware of this, actually validating part of the parent chain’s blocks in the process of verifying the child chain’s blocks.
This allows miners of the parent chain to mine multiple blockchains at once by simply including blockheader commitments in their coinbase transaction, and then mining blocks for the parent blockchain. When one is found for the parent chain, one is found for all of the child chains as well.
DMND’s integration allows miners to claim the sidechain rewards in rBTC (Rootstock’s bitcoin backed token whose reserves are managed by the federation operating the sidechain) directly on the sidechain, with no revenue sharing or intermediary pool custody.
There is potential for a dynamic like this to actually have the opposite impact on decentralization, but it is nonetheless an important development that will actually put such questions to the test in the real world.
Alejandro De La Torre, CEO and Co-Founder of DMND, had this to say: “The miner controls the merge mining and the miner gets paid for the merge mining. More delegation of control to miners is our key support for further decentralisation of the Bitcoin ecosystem.”
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