What Is Mining Algorithm?

An essential element of blockchain technology, a mining algorithm encompasses the set of guidelines or directives that a computer adheres to in order to generate a valid block.

Get to Know with Mining Algorithm

Diverse mining algorithms have been developed, each presenting distinct advantages and limitations. Among these algorithms, SHA-256 stands out as one of the most renowned, devised by the U.S National Security Agency (NSA).

In the realm of cryptocurrency mining, a mining algorithm dictates the procedures miners employ to compile their new blocks efficiently.

Prominent Mining Algorithms

1. SHA-256

SHA-256 represents a 256-bit cryptographic hash function crafted by the U.S National Security Agency. The acronym SHA denotes "secure hash algorithm." Operating as a cryptographic hash function, SHA-256 transforms input data into a longer "hash" output, ensuring data integrity and security.

2. Equihash

Introduced in 2016 by Alex Biryukov and Dmitry Khovratovich, Equihash serves as a memory-oriented Proof of Work algorithm. Engineered to promote fairness and resist GPU and ASIC dominance, Equihash relies on random access to a substantial hash table (2GB per instance). 

This approach is also utilized by other algorithms like Cuckoo Cycle, X11, and Cryptonight. By necessitating significant memory and computational resources, Equihash effectively deters ASIC-centric mining, making it conducive to GPU utilization.

3. Ethash

Ethereum adopts Ethash as its Proof-of-Work hashing algorithm. Similar to other algorithms such as script or SHA-256, Ethash demands substantial memory capacity and computational prowess. 

Ethash's primary objective is to thwart the dominance of ASICs (Application Specific Integrated Circuits) in mining operations. This strategic move by Ethereum's developers aims to prevent any single entity from controlling over 51% of the network's mining power, thereby safeguarding the network against potential attacks.

4. Scrypt

Scrypt functions as a password-based key derivation function (PBKDF), enhancing password security significantly. Engineered to fortify passwords within authentication systems, Scrypt utilizes cryptographic hash functions and operates as an iterated hash, repeatedly applying the underlying hash function to the input value. 

Widely utilized in various cryptocurrencies like Litecoin and Dogecoin, Scrypt serves as the foundation for proof-of-work mining and password-based authentication systems.

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DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.