Different Types Of Cryptocurrency Algorithms
There are several different types of cryptocurrency algorithms that are used to secure and validate transactions on a blockchain network. Some of the most commonly used algorithms include:
- Proof-of-Work (PoW): This is the most widely used algorithm in the cryptocurrency world, and is the algorithm that is used by Bitcoin. In a PoW system, miners compete to solve complex mathematical problems in order to validate transactions and create new blocks on the blockchain. The first miner to solve the problem is rewarded with a block reward, which is usually a certain amount of cryptocurrency.
- Proof-of-Stake (PoS): This algorithm is an alternative to PoW that aims to address some of the issues with PoW, such as high energy consumption. In a PoS system, instead of competing to solve mathematical problems, validators are chosen to create new blocks based on the amount of cryptocurrency they hold and are willing to “stake”. This means that the more cryptocurrency an individual holds, the higher their chances are of being chosen to validate a transaction and earn the block reward.
- Delegated Proof-of-Stake (DPoS): This is a variation of the PoS algorithm that allows token holders to vote for delegates who will validate transactions and create new blocks on their behalf. The delegates are usually chosen based on their reputation, stake and the number of votes they receive.
- Proof-of-Authority (PoA): This algorithm is designed for private networks and it’s based on the identity of the validators. It’s commonly used in enterprise blockchain solutions and it’s a more secure and efficient alternative to PoW and PoS.
- Proof-of-Burn (PoB): This algorithm is a relatively new concept and it’s still in an experimental phase. In a PoB system, a miner sends a certain amount of cryptocurrency to an unspendable address, effectively “burning” it. This act of burning the cryptocurrency is used as a proof of work in order to secure the network and validate transactions.
Each of these algorithms has its own set of advantages and disadvantages and can be suitable for different types of blockchain networks and use cases. It’s important to note that some of the newer algorithms like PoS and DPoS are designed to be more energy efficient than PoW and also to increase decentralization and security.
First, we need to understand what is “Hash”?
Hash is a “message digest” – a number generated from a string of text, the hash itself is smaller than the text, so it is almost not possible to generate another string of text with the same hash value. Learn more about hashes
Second, we need to understand what is it “Mining Hashing Algorithm”
A hashing algorithm is a cryptographic hash function, the mathematical algorithm that maps data of arbitrary size to a hash of a fixed size. Hashing algorithm is being used for digital signatures and authentication.
The Most Common Cryptocurrency Mining Algorithms
What cryptocurrency uses SHA256?
SHA stands for “Secure hash Algorithm” (SHA-256) generates a unique 256-bit (32-byte) signature for a text string. Block processing time for SHA-256 generally ranges from six to ten minutes and requires hash rates at the Giga hashes per second (GH/s). SHA-256 hash rate is measured by GH/s: Gigahashes per second, or one billion hash computations per second. SHA-256 algorithm mining can be performed on an ASIC hardware (application-specific integrated circuit)
The SHA -256 cryptocurrency algorithm is used to mine:
Scrypt algorithm requires large amounts of memory and there was a need to design it to perform large-scale custom hardware attacks. The Scrypt algorithm is more simple and quicker than the SHA-256 algorithm.
Scrypt’s hash rate is measured by KH/s: Kilohashes per second, or one thousand hash computations per second.
Scrypt algorithm mining can be performed on a computer CPU, Graphics Processing Unit (GPU), there is some ASICs hardware that is available for Scrypt mining.
The Scrypt cryptocurrency algorithm is used to mine:
The X11 hashing algorithm created by Dash core developer Evan Duffield. The X11 uses a sequence of eleven scientific hashing algorithms for the proof-of-work. One of the biggest benefits of using X11 algorithm is energy efficiency, GPUs require approximately 30% less wattage and run 30-50% cooler than they do with Scrypt.
X11’s hash rate is measured by MH/s: mega hashes per second, or one million hash computations per second.
The X11 cryptocurrency algorithm is used to mine:
The Cryptonight algorithm was designed to be suitable for PC CPUs, it was implemented in an open-sourced protocol that allows increasing privacy in cryptocurrency transactions – “CryptoNote”.
Unlike the Scrypt algorithm, the Cryptonight algorithm depends on all the previous blocks for each new block.
Cryptonight’s hash rate is measured by H/s: Hashes per second, hash computations per second.
The Cryptonight cryptocurrency algorithm is used to mine:
Safex Token (SFT)
TFT Network (TFTN)
Dagger Hashimoto – Ethash Algorithm:
Dagger Hashimoto is a proposed spec for the mining algorithm for Ethereum and builds on two key pieces of previous work:
1. Dagger: algorithm by Vitalik Buterin, Dagger was meant to be an alternative to existing memory-hard algorithms like Scrypt, which are memory-hard but are also very hard to verify when their memory-hardness is increased to genuinely secure levels. However, Dagger was proven to be vulnerable to shared memory hardware acceleration by Sergio Lerner and was then dropped in favor of other avenues of research.
2. Hashimoto: algorithm by Thaddeus Dryja which intends to achieve ASIC resistance by being IO-bound, ie. making memory reads the limiting factor in the mining process. Hashimoto uses the blockchain as a source of data, simultaneously satisfying.
(source: “Etherum / WIKI“)
Dagger Hashimoto’s hash rate is measured by MH/s: mega hashes per second, or one million hash computations per second.
The Dagger Hashimoto – Ethash algorithm is used to mine:
Ethereum Classic (ETC)
Lyra2REv2 is a proof-of-work algorithm written for Vertcoin (VTC). It is chain-based, with various hash functions contained within. The hash functions are Blake, Keccak, Cubehash, LYRA2, Skein and BMW (Blue Midnight Wish).
This algorithm favours GPU miners as a single CPU-based botnet controls a majority of the network’s hash power. Thus Vertcoin forked from Lyra2RE to Lyra2REv2 back in 2015.
The Lyra2REv2 algorithm is used to mine:
NeoScrypt is an offshoot of Scrypt algorithm. It was originally designed for a new cryptocurrency called Feathercoin. The predominant feature is the rate of awards accrual: 60-90 coins per block on average. The mining complexity is relatively low, making it a relatively profitable algorithm.
Another feature is the fast transaction times. The network can process transactions relatively quickly even at peak times. The network’s authentication enables quicker transactions. It creates an individual hash that is not related to the user, but users can still use it to self-identify.
The NeoScrypt algorithm is used to mine:
X15 is an algorithm that uses 15 different hash functions. This means it is extremely secure from attacks, as a hacker would have to hack all 15 algorithms to breach the system. The algorithm is based on the X11 algorithm. Thus anyone who was accustomed to mining on X11 or X13 should have a very easy transfer. The hashing algorithms on board are: BLAKE, BMW, Groestl, JH, Keccak, Skein, Luffa, Cubehash, Shavite, Simd, Echo, Hamsi, Fugue, Shabal and Whirlpool.
The X15 algorithm is used to mine:
SHA-3 or Keccak was written in 2008 by a team lead by Yoan Dimen. In 2015 it became accepted as the new FIPS standard. It is a unidirectional function for generating digital prints of the selected length (the standard accepts 224, 256, 384 or 512 bits) from input data of any size.
With the aim of achieving cryptographic stability and a high-performance level, the Keccak algorithm had multiple configurable parameters such as block size, algorithm state size, number of rounds in the f function, etc). The SHA-3 has made some changes to this original algorithm. It simplified the algorithm of filling. It discarded slow modes c=768 and c=1024.
The X15 algorithm is used to mine:
Bitcoin Classic Token (BCT)
What algorithm is Auroracoin?
Auroracoin launched in early 2014 as a crypto alternative to the Icelandic króna as well as a Bitcoin alternative. The creators (or creators) remain unknown. The name the creator used was Baldur Friggjar Óðinsson. The creator’s based the coin on Litecoin originally. The aim was to be an alternative to the long-term instability and very limited króna.
The creator claimed they would release 50% of Auroracoin to everyone registered in the Iceland Nation ID system free of charge. This massive national distribution system was the catalyst for the development of the airdrop system which would be used for the distribution.
In 2015 the Aurorcoin foundation started operating with the aim of promoting the proliferation and use of Auroracoin in Iceland. This cryptocurrency’s legal status is yet undetermined, a fact which affects the crypto’s value to this day.