Understanding Cadence Mining

The Cadence Mining system is a hybrid mining mechanism, first introduced by Fractal Bitcoin, that forms the basis of Fractalink’s mining operations. It combines the core principles of Bitcoin’s Proof-of-Work (PoW) with innovative features designed to enhance both security and scalability. The core principles of Cadence Mining revolve around:

Permissionless Mining

Like Bitcoin’s PoW, anyone can participate in mining, ensuring that the network remains decentralized and resistant to manipulation. However, Cadence Mining builds upon this by allowing for faster block confirmations (under 30 seconds) and improved transaction throughput, compared to Bitcoin’s base layer.

Merged Mining

Cadence Mining allows miners to simultaneously mine blocks on both Fractal Bitcoin and Bitcoin networks without requiring additional computational power. This dual-purpose mining leverages Auxiliary Proof-of-Work (AuxPoW), a protocol that enables miners to use the same hash power to validate blocks across multiple blockchains.

• AuxPoW Process: When a miner solves a cryptographic puzzle (the PoW function) for a Fractal Bitcoin block, that same solution is valid for Bitcoin's PoW, allowing the miner to submit it to both networks.

• One in Three Blocks Merged with Bitcoin: Every third block mined on Fractal Bitcoin is merged with Bitcoin’s blockchain. This means that Bitcoin miners can simultaneously mine for Fractal Bitcoin and Bitcoin without expending additional computational power. By aligning with Bitcoin's mining infrastructure, Fractal Bitcoin inherits part of Bitcoin’s security, as Bitcoin miners are incentivized to participate in securing both networks​.

• Standalone Fractal Bitcoin Blocks: The other two-thirds of the blocks are mined solely within the Fractal Bitcoin ecosystem, which ensures that the network maintains its own integrity and independence while still benefiting from the security provided by merged mining.

def merged_mining(fractal_block, bitcoin_block):
    # Hash both block headers using SHA256d algorithm
    fractal_block_hash = double_sha256(fractal_block.header)
    bitcoin_block_hash = double_sha256(bitcoin_block.header)
    
    # If hashes match, the proof-of-work is valid for both chains
    return fractal_block_hash == bitcoin_block_hash

This merged mining approach not only increases security but also allows miners to maximize rewards by earning from two networks simultaneously.

Security Benefits

The security of blockchain networks is largely dependent on the hash power they can mobilize. Smaller chains, like most Bitcoin sidechains, can be vulnerable to 51% attacks, where an entity controlling the majority of the network’s mining power can potentially manipulate transactions or double-spend coins.

Cadence Mining mitigates these risks by utilizing the hash power of Bitcoin miners during merged mining periods. Because Bitcoin is the largest and most secure blockchain network, merging Fractal Bitcoin blocks with Bitcoin allows Fractal Bitcoin to tap into Bitcoin's immense security infrastructure. This makes it highly resistant to attacks that would be difficult to execute on Bitcoin due to the sheer amount of computational power required​.

Furthermore, by only requiring every third block to be merged with Bitcoin, Cadence Mining ensures that Fractal Bitcoin maintains its own blockchain identity and functionality while still benefiting from periodic boosts in security. This makes the network more resilient compared to other sidechains that might rely entirely on Bitcoin’s mining infrastructure for every block.

Recursive Layering for Scalability

Another crucial feature of the Cadence Mining method is its recursive layering structure, which boosts network scalability. Each new layer of the blockchain adds a 20x increase in transaction capacity. This ensures that the Fractal Bitcoin network can handle increased transaction volumes without sacrificing performance or security.

• Layer Functionality: Each layer is mined concurrently with the base chain, meaning that as more layers are added, the network’s overall throughput increases exponentially. This layered structure allows the network to process transactions in parallel across multiple layers, avoiding congestion.

• Efficiency: By processing more transactions within the same time frame, recursive layering enhances the network's overall efficiency, making it ideal for applications such as decentralized finance (DeFi) and NFTs.

Fast Block Confirmations

Cadence Mining dramatically reduces block confirmation times, offering block validations in under 30 seconds, compared to Bitcoin’s 10-minute confirmation window. This improvement is critical for blockchain applications requiring quick settlements, such as real-time payments, DeFi protocols, and decentralized exchanges (DEXs).

• Transaction Speed: Faster block confirmation ensures that the network can handle high-frequency transactions while maintaining security.

• Economic Benefit for Miners: Miners benefit from faster block generation, as they are rewarded more frequently for validating blocks on the network.