Author: Jorge Timón 2014-01-10 12:29:03
Published on: 2014-01-10T12:29:03+00:00
In a discussion on the security of altcoins versus merged mined ones, it was suggested that if a decentralized consensus system is competing with another in a specific domain, miners may decide to attack a competitor coin to preserve the value of their existing coins. This could happen if the new system has negative value for existing holders. However, it was noted that not all miners hold namecoins and many sell their mined coins for fiat. The costs of attacking a competitor coin are high, so merge-mining makes it easier to do. If a new system has greater value than the harm done to participants in the old system, it has a chance of surviving. Merge-mined alt-coins that are currencies often get attacked quickly as they dilute the value of existing coins and people who own those coins have an incentive to attack the competitor.However, there were other reasons why some currencies that died with merged mining (MM) and others survived. Bitcoin mining pools didn't want to update to MM and acted irrationally about it. Namecoin went through a delicate situation before hardforking to MM, but now is the most secure altcoin thanks to MM. Rational bitcoin miners should mine Namecoin, and those who consider it competition with their current Bitcoin speculative position should sell the Namecoins as soon as they get them. Providing security for a chain does not give it utility or raise its demand. Luke-Jr also discussed the importance of maximizing security for a new chain for the long term, which currently means merging it with bitcoin. The main rational reason to never do merged mining is to prevent competitive and rational miners from crashing the price of your currency, which is everything a scamcoiner cares about, the price and market cap.
Updated on: 2023-06-07T23:20:22.409860+00:00