Bitcoin Forum

As many of you are aware, Namecoin merged mining is now available giving miners the ability to mine both Bitcoin and Namecoin simultaneously (that is, with 100% of your shares counting for both Bitcoin and Namecoin).

Right now, the extra income that a miner would make by switching from a bitcoin pool to a merged mining pool is about 20% (that is if you sell your namecoins at https://exchange.bitparking.com/main (https://exchange.bitparking.com/main) as you collect them).  You can get an up-to-date figure at allchains.info (http://allchains.info) and can use http://dot-bit.org/tools/nextDifficulty.php (http://dot-bit.org/tools/nextDifficulty.php) for reliable future difficulty predictions.

To calculate this income bonus I use the formula:

As I understand, merged mining has been rushed out to patch Namecoin's high difficulty problem.  Most of the big pools are being prudent and waiting for a basic level of protocol documentation before implementing merged mining (see https://bitcointalk.org/index.php?topic=47136.0 (https://bitcointalk.org/index.php?topic=47136.0)).  Some smaller pools (including of course many Namecoin pools) started with the existing merged mining tools right away in an attempt to attract more miners.

People seem to be skeptical about this for now, the hashrate on masterpool started out pretty quick to 73gh/s but declined to 49 for now. But I guess the big stream will come once the first BTC blocks are found, so nobody can claim it is a scam.

I'd expect the NMC and BTC value to rise mid-term due to this for namecoin because of the increased popularity and for bitcoin less insecurity in respect to the potential harm parasitic alternate cryptocurrencies can do.

That seems very possible.  The rates at simplecoin have come down quite a bit from an initial spark of interest too.  I'd imagine there are some risk takers in the Bitcoin mining crowd though and with the potential reward as high as it is I expect there is also a significant problem with awareness.


I'm expecting the NMC value to fall in the mid-term as merged mining establishes itself and we have a temporary glut of supply as the Namecoin difficulty adjusts.  I'm looking forward to seeing how it goes.

Some interesting news here: https://bitcointalk.org/index.php?topic=42667.msg566146#msg566146 (https://bitcointalk.org/index.php?topic=42667.msg566146#msg566146)

Not only is this evidence in favour of the fact that merged mining is working (so a little less risk for miners considering moving to a merged mining pool) but there is a quickly growing lump of namecoins which will at some point be released possibly sending the namecoin market value down sharply and reducing the income bonus for using merged mining.  For those of you getting namecoins now it might be worth trading them for bitcoins before slush releases the stash.

Also, of course, it means that slush's pool is likely the most profitable of the big pools right now by far even if you don't hop it.  This is definitely worth a look for those miners that need to be paid hourly (the highly variance averse).

Following slush's official announcement of supporting merged mining the Namecoin market value has started to fall quickly (thus affecting the income bonus for all merged miners).  Right now it's still holding at around 40% and so is a very lucrative option.

Slush's pool is currently at around 1350 GH/s so there is finally a low variance option for merged miners (2% fee, proportional).  Very much worth considering for the server reliability and uptime which this pool can offer (I've seen reports of some problems with the smaller pools).

For maximum profit simplecoin.us still seems to be on top thanks to their 0% fee and promotions.  They also have a good reputation for server reliability, scalability, and uptime, and managed the switch to merged mining with no serious problems.  The only problem I see is the high variance although, unsurprisingly, it's falling fast.

Does anyone know how a new difficulty is calculated?  Is it simply based on the length of time taken to find the last 2016 blocks?  If so we should expect the Namecoin difficulty to fall sharply very soon which will give a temporary huge boost to merged mining (possibly over 100%).

I believe the last adjustment took difficulty down 75%, so we are only a couple days into the new adjustment.
Edit: Oh I'm sorry, I'm an idiot. It looks like difficulty has not yet been taken down 75%, so in a day it will go down that much. Yes, a large drop is in order (but market values of namecoin are slipping!).

Interesting, it seems that

http://allchains.info/ (http://allchains.info/)
and
http://dot-bit.org/tools/nextDifficulty.php (http://dot-bit.org/tools/nextDifficulty.php)

are suggesting very different future values for Namecoin difficulty.  In this case it seems that allchains is wrong.

Trying to find something of the calculation I found this page https://en.bitcoin.it/wiki/Difficulty (https://en.bitcoin.it/wiki/Difficulty) which confirms my expectations:


I can't be truly sure without looking at the code but this is enough for me to be reasonably confident that we are indeed headed for a massive drop in Namecoin difficulty.

yeah we have been on this difficulty for 3 months, some days only solving 1-2 blocks. so at this point you can add 100TH/s to the nmc network and would still drop 75% in difficulty, after which it will quickly balance out in difficulty in a few weeks we will be back at 6 blocks an hr. At which time there wont be a flood of coins into the exchange and the prices will lvl off again.  Because most of the people buying atm are supporters of NMC that most likely will hold onto their coins. (I know I plan to.)

Incase folks don't know... when you register a domain name the coins used to pay are Destroyed forever...

so the 21mil max coins will never be reached since some of those coins have already been destroyed and will continue to decrease in supply as more domains are registered.

Thanks, it's good to get confirmation on this.

It's interesting to see some buying pressure for Namecoins right now.  The pool DDOSing seems to have slowed down Namecoin generation a lot but I'm still surprised to find that the last two updates I've made to the income bonus stat have been to increase it!

I told you  :D

imo we would have to at least meet equilibrium in terms of profit/hash

I don't really follow but the market value does seem to still be rising.

Also, the Namecoin difficulty has dropped 4-fold to 23508.98 so, as has happended twice before, Namecoin mining is now more profitable than Bitcoin mining.  This means that merged mining is more than twice as profitable as normal Bitcoin mining.  Don't expect this to last for long.

you can easily see what the current bonus to merged mining at allchains.info the nmc profit cell so atm its 144% extra btc

so currently if you mine 1 btc at a merged mining pool you should earn 2.44 btc (if you sell the nmc right away)

looks like only 4 days or less at this difficulty.

Yes, it seems like this round is going to last longer than I expected.  Maybe we'll still have this bonus 2 days from now!  I assumed more people would move to merged mining with such serious profit involved but it seems this assumption was faulty and that there are lots of miners out there who don't keep up with mining news.

Happy mining everyone! :)

The Namecoin difficulty has just risen back up to 94`000 and so the income bonus of merged mining has dropped down to only 30%.  The market value of NMC/BTC seems to be holding a I guess this mining bonus will hold for the next 10 days or so.

We've just had a 65% increase in Namecoin difficulty and consequently the income bonus from using merged mining has plummeted to little more than 20%.