Bitcoin transformed finance by deploying blockchain technology, a decentralised system that replaces central authority with cryptographic trust. At its heart lies the Proof of Work (PoW) consensus algorithm, where miners expend computational energy to compete and solve complex mathematical problems, securing the network and validating transactions for BTC rewards.

This model reflects the natural competition for survival, akin to trees vying for sunlight, businesses vying for market dominance, individuals competing for a mate or the dynamics between predators and prey —each process governed by the relentless pursuit of energy and dominance.

Bitcoin’s hashrate represents its own competitive edge in the digital realm. This hashrate, a staggering 595.79 EH/s, signifies a computational battle much like those found in nature, but on a scale that dwarfs the combined power of the world’s supercomputers, underscoring the network’s unmatched security and the near-impossibility of overpowering it.

PoW elevates beyond a simple mechanism, integrating nature’s laws into the digital domain to fortify Bitcoin’s network through electricity, a tangible, physical cost. Bitcoin—becoming the unchallenged cornerstone of digital finance, offers a decentralised alternative that empowers individuals with financial sovereignty and freedom from central authority. It provides a secure, transparent, and accessible financial system for everyone, regardless of location or status.

Satoshi’s Vision for Merged Mining

Merged mining, or Auxiliary Proof of Work (AuxPoW), allows two different blockchains to use the same consensus mechanism. Miners can mine blocks on both chains simultaneously, submitting proof of their work to both networks. The key is that the ‘child’ blockchain, while independent in transactions and storage, relies on the ‘parent’ blockchain’s PoW for its security.

The concept of merged mining was introduced in a Bitcoin forum post by Satoshi Nakamoto in 2010, discussing the possibility of a new service called BitDNS to be mined simultaneously with Bitcoin. Satoshi proposed that by allowing miners to work on both chains at once, without extra effort or splitting the mining community, both networks could benefit from increased security and efficiency. The benefits include:

1. Economic Assurance of Security: Merged mining with Bitcoin means a ‘child’ blockchain’s security is underwritten by the considerable economic cost of Bitcoin mining. This straightforwardly leverages the existing, well-established energy expenditure of Bitcoin for maximum security with no additional complexity.
2. Resource Optimisation and Environmental Consideration: Utilising Bitcoin’s existing mining infrastructure, merged mining does not require extra energy, making it an efficient and environmentally considerate approach to securing a blockchain.
3. Scalability through Proven Infrastructure: By tapping into Bitcoin’s vast network of miners, merged mining scales a ‘child’ blockchain’s security with the growth of Bitcoin’s network.

Merged mining showcases efficiency and symbiosis, much like the natural cooperation in mycorrhisal networks, bees’ cross-species pollination, and mutualistic relationships between birds and mammals. It mirrors human ingenuity in leveraging established resources, such as start-ups utilising corporate infrastructures and solar panels or trees harnessing the sun’s energy, emphasising the smart utilisation of existing networks to bolster security and growth without additional expenditure.

Notably, Namecoin, one of the first to adopt this with Bitcoin, aims at decentralising domain-name registration. While Dogecoin, known for being merge mined, actually pairs with Litecoin due to the shared Scrypt algorithm, not Bitcoin. Myriadcoin’s unique approach supports multiple algorithms, including SHA-256, making it compatible with Bitcoin. Syscoin and Elastos also leverage Bitcoin’s hash power for enhanced security through merge mining.

Elastos and Bitcoin Merged Mining

Elastos, which began with the vision of creating a secure, decentralised internet, incorporated merged mining with Bitcoin in 2018. BTC.com helped mine its first block, and today, its network and currency ELA benefits from over 50% of Bitcoin’s mining security. So, what does this mean?

• Elastos Utilises the Strongest Proof of Work Security Model in Existence: By merged mining with Bitcoin, Elastos capitalises on the most extensive PoW network, inheriting Bitcoin’s unparalleled security attributes. This symbiotic relationship means Elastos’ blockchain integrity is as robust as Bitcoin’s, mitigating risks without directly vying for Bitcoin’s mining resources.
• Elastos Has Achieved an Energy-Efficient Design Without Compromising Security: Energy efficiency is a major concern in cryptocurrency mining. Elastos adds transaction and block validation on its network by piggybacking on the work done by Bitcoin miners, thus maintaining high security with no additional energy requirements. This model serves as a case study in eco-conscious blockchain design.
• Elastos Offers a Unique Combination of a Decentralised Operating System with Bitcoin-Level Security: Unlike conventional blockchains, Elastos is a fully-fledged operating system for decentralised applications, secured by a blockchain layer. By integrating Bitcoin’s hash power through merged mining, it ensures a fortified environment for running dApps, differentiating itself significantly from competitors.
• Elastos Is Pioneering the True Decentralised Internet Backed by the Robustness of Bitcoin’s Network: Elastos’ aim to revamp the internet structure into a truly decentralised form is ambitious. By aligning its consensus mechanism with that of Bitcoin, it anchors its network to the tried-and-tested resilience of Bitcoin’s mining power, driving forward a new paradigm for digital communication and interaction.
• Elastos’s Ecosystem Is Designed to be Self-Sustaining and Independent, Yet Benefits Directly from Bitcoin’s Continued Growth: The design of Elastos’s ecosystem ensures it remains autonomous. As Bitcoin’s network expands and becomes more secure, Elastos indirectly benefits from these enhancements, bolstering its own proposition without the need for additional investment in security.
• Elastos May Be the Most Direct Implementation of Satoshi Nakamoto’s Vision for Merged Mining: Elastos’s use of merged mining is arguably a direct reflection of Satoshi’s initial musings on the subject. Its broad strategic outlook that includes an operating system, a carrier network, and SDKs for developers, all secured by the hash rate of Bitcoin, makes it a comprehensive and multidimensional implementation of the concept.

BTC’s Queen

Elastos, by merging mining with Bitcoin, can be likened to a queen in the chess game of digital finance, where Bitcoin holds the position of king. Just as a queen’s versatility and power are essential for protecting the king and dominating the board, Elastos’ integration with Bitcoin’s security framework amplifies the ecosystem’s resilience and innovation and gives it’s own ecosystem a plethora of utility. This includes:

• Transaction Fees: ELA powers Elastos by covering transaction fees, including smart contracts and asset registrations, ensuring network security and efficiency.
• Digital Asset Exchange: ELA fuels a decentralised economy in Elastos, enabling direct trade of digital assets and services, cutting out middlemen.
• Incentive Mechanism: ELA rewards participants, including miners who secure the network via merge mining with Bitcoin, enhancing security and sustainability.
• Governance: Holding ELA grants governance rights, allowing stakeholders to vote on network decisions through the Cyber Republic, promoting community-driven development.
• Decentralised Applications (DApps): ELA is essential for using DApps on Elastos, providing access to a broad range of services and expanding the ecosystem’s functionality.

Together, Bitcoin and Elastos form a formidable duo, combining the steadfast security of the king with the dynamic reach and versatility of the queen, setting the stage for a future where digital finance is both secure and boundlessly innovative. What’s more, Elastos is developing BeL2, the Bitcoin Elastos Layer 2 protocol, allowing EVM smart contracts to run directly on top of Bitcoin, a scalable BitVM innovation. What if such services enable anyone with their decentralised wallet the ability to generate their own Bitcoin-backed algorithmic stablecoins, free from censorship? If Bitcoin introduces the concept of “Be Your Own Bank,” what if Elastos can expand on the idea to “Be Your Own Central Bank?”, both secured in POW. This could drastically disrupt finance as we know it.

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