Actually, I have to think about this merge-mining thing a bit more. I'm starting to think it's better to do without merge-mining at all. As I explained in the forum post, the parent will put the hashes of its children headers as transactions inside its blocks. Thus parents will have an incentive to validate the children not by merge mining, but by collecting fees from the children for putting those transactions inside (fees that can be spent at the children chains). So, ya no merge mining needed for my proposal. But I will think about it a bit more :)

On Tue, Jun 16, 2015 at 6:43 PM, Andrew <onelineproof@gmail.com> wrote:

On Tue, Jun 16, 2015 at 6:17 PM, Peter Todd <pete@petertodd.org> wrote:
Merge-mined sidechains are not a scaling solution any more than SPV is a
scaling solution because they don't solve the scaling problem for
miners.

Some kind of treechain like sidechain / subchains where what part of the
tree miners can mine is constrained to preserve fairness could be both a
scaling solution, and decentralized, but no-one has come up with a solid
design yet that's ready for production. (my treechains don't qualify for
transactions yet; maybe for other proof-of-publication uses)

Well doesn't my proposal solve the miner decentralization problem. Only the direct parent and children chains are merge mined. To be more clear, let the top chain to have level 1. Each chain that is a child of a chain of level n has level n+1. For any chain C, a block is accepted if the hash of its header has an appropriate number of trailing zeros (as usual). It can also be accepted with special transactions as I will explain. Let C be a chain of level n. Let C0,C1,....,C9 be its children (each of level n+1). For any i in {0,1,...,9}, any solution to the mining problem of C can be inserted as a special transaction inside Ci and this enables the block to be accepted in Ci (so C and C0,C1,...,C9 are merge mined. But, for any i in {0,1,...,9} and any j in {0,1,...,9}, any solution to the mining problem of C cannot be inserted as a special transaction inside of child Cij of Ci. So that means all of the chains are not merge mined, only localised parts, right?

By the way, we can eventually get rid of the block size 1 MB limit by requiring more than just the header to be hashed, but that can be done in the future as soft fork with sidechains, and is a side topic.

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