Mining Algorithm

Understanding Mining Algorithm

A mining algorithm is a set of rules that miners follow when creating new blocks in cryptocurrency mining. Different mining algorithms have been developed, each with its own strengths and weaknesses. One widely used algorithm is SHA-256, which was developed by the NSA.

Popular Mining Algorithms

SHA-256

SHA-256, short for “secure hash algorithm 256-bit,” is a cryptographic hash function created by the U.S National Security Agency. It takes an input and produces a longer data representation called a hash. This algorithm is commonly used in cryptocurrency mining.

Equihash

Equihash is a memory-oriented Proof of Work algorithm introduced in 2016 by Alex Biryukov and Dmitry Khovratovich. It was designed to be egalitarian and resistant to GPUs and ASICs. The algorithm relies on random access to a large hash table and is used by several other algorithms, including Cuckoo Cycle, X11, and Cryptonight.

To maintain ASIC resistance and prevent the use of ASICs, Equihash-based cryptocurrencies require significant memory and computational power, making them suitable for GPU usage.

Ethash

Ethash is the Proof-of-Work hashing algorithm used by Ethereum. Similar to other algorithms like script or SHA-256, Ethash requires substantial memory and computational power. Its main goal is to prevent the use of Application Specific Integrated Circuits (ASICs) in mining, ensuring a more decentralized network by avoiding concentration of mining power.

Scrypt

Scrypt is a password-based key derivation function (PBKDF) that enhances password security. It is commonly used in password-based authentication systems to strengthen keys. Scrypt uses cryptographic hash functions and applies the underlying hash function repeatedly to the input value, making it an iterated hash.

Scrypt is used in various cryptocurrencies, including Litecoin and Dogecoin, for proof-of-work mining and password-based authentication.