Hashing Algorithms

Cryptocurrencies algorithms and hash functions are used to secure blockchain transactions and are an essential component of the cryptomining process. We’ll now discuss some of the most common types of crypto mining algorithms and identify some of the digital currencies with which they’re used.

Proof of Work Algorithm

The Proof of Work (PoW) algorithm is the foundation upon which most cryptocurrencies, including Bitcoin, are based. In basic terms, PoW is a system which comprises difficult to calculate but easily verifiable data. This makes it well-suited for use on a blockchain.

Producing a proof of work is a random process with low probability which requires a sizeable amount of processor power. The most widely used proof-of-work-scheme is based on the SHA-256 cryptographic hash algorithm.

SHA-256

SHA-256 is the most commonly-used proof-of-work hash function. SHA stands for ‘Secure Hash Algorithm’ and was originally developed by the US National Security Agency. Offering an extremely high level of security, it generates a 256-bit signature.

Due to slower data block processing, which is measured in minutes rather than seconds, SHA-256 has plenty of critics. However, advocates defend the superior protection it offers over algorithmic functions such as SCRYPT.

Mining an SHA-256 cryptocurrency requires hardware that generates hashes in the gigahash per second (GH/s) range. Such requirements are usually beyond the capabilities of consumer-grade CPUs which is why miners often use dedicated devices such as ASICs or mining rigs.

Currencies which use SHA-256:

  • 21Coin (21)
  • Battlecoin (BCX)
  • Benjamins (BEN)
  • Betacoin (BET)
  • Bitcoin (BTC)
  • BitcoinCash (BCH)
  • Bytecoin (BTE)
  • Devcoin (DVC)
  • Globe (GLB)
  • Ixcoin (IXC)
  • Joulecoin (XJO)
  • Namecoin (NMC)
  • Peercoin (PPC)
  • PetroDollar (P$)
  • Snowcoin (SNC)
  • Takeicoin (TAK)
  • Terracoin (TRC)
  • Unicoin (UNIC)
  • Unobtanium (UNO)
  • Zetacoin (ZET)

SCRYPT

SCRYPT is a simpler algorithm and offers quicker block processing times than SHA-256. It’s also far less resource hungry and can be run on standard CPUs.

Used for alt currencies such as Litecoin (LTC), SCRYPT doesn’t use anywhere near the energy required for SHA-256, which means that it’s preferred by many crypto miners.

Block processing rates are usually measured in kilohashes per second (KH/s) or mega hashes per second (MH/s) so mining can be performed with CPU processors without the requirement of ASICs or other dedicated devices.

Naysayers tend to identify its fast block processing rates as a potential security issue, because less time is taken to examine the data.

Currencies which use SCRYPT

  • Anoncoin (ANC)
  • Bitmark (BTM)
  • DigitalCoin (DGC)
  • Dogecoin (DOGE)
  • Ekrona (KRN)
  • Elacoin (ELC)
  • FeatherCoin (FRC)
  • GoldCoin (GLD)
  • Latium (LAT)
  • Litecoin (LTC)
  • MidasCoin (MID)
  • Novacoin (NVC)
  • PandaCoins (PND)
  • TagCoin (TAG)
  • WorldCoin (WDC)

Cryptonight

Cryptonight is intended for use on standard PC CPUs and uses random access to the processor’s slow memory. It sits inside the L3 cache and comprises just a megabyte of internal memory. However, its unsuitable for GPU, FPGA and ASIC architectures.

Currencies which use Cryptonight

  • AeonCoin (AEON)
  • ByteCoin (BCN)
  • Dashcoin (DSH)
  • Digital Note (XDN)
  • FantomCoin (FCN)
  • Karbo (KRB)
  • Monero(XMR)
  • MonetaVerde (MCN)
  • Pebble Coin (XPB)
  • Quazar Coin (QCN)

Ethash

ETHASH is a proof-of-work algorithm used on Ethereum blockchains. Based on the Dagger-Hashimot hash, it is GPU memory intensive which precludes the use of standard CPU processors – its also designed to be ASIC-resistant. Using an initial 1GB cache, ETHASH features a 16MB cache for light clients.

Currencies which use Ethash

  • Ahoolee (AHT)
  • Arbi (ARBI)
  • Ehterum (ETC)
  • Elementrem (ELE)
  • Ethereum (ETH)
  • Expanse (EXP)
  • Metaverse (ETP)
  • Musicoin (MUSIC)
  • Waltonchain (WTC)
  • WhaleCoin (WHL)

X11

The X11 algorithm was introduced in 2014 and is so named because it uses 11 rounds of hashes. It initially proved popular among low-budget miners because of its energy-efficiency  compared to mining with a CPU or GPU.

X11 places less demand on processing power which keeps hardware cooler and lowers electricity costs.

However, the increased use of ASICs and the introduction of cryptocurrency DASH, which adopted X11, means that solving the algorithm requires more powerful hardware. Since its introduction, there have been numerous iterations including X13, X14, X15 and X17.

Currencies which use X11

  • Achilles (ACH)
  • AdzCoin (ADZ)
  • Badgercoin (BDG)
  • BankCoin (BANK)
  • Bantam (BNT)
  • Capricoin (CPC)
  • CereiPayCoin (CRPC)
  • Checkcoin (CKC)
  • ChipCoin (CHIP)
  • Conspiracycoin (CYC)
  • CryptCoin (CRYPT)
  • DarkCash (DRKC)
  • Dash (DASH)
  • DigitalPrice (DP)
  • ESportsCoin (ESC)
  • EuropeCoin (ERC)
  • Fractalcoin (FRAC)
  • Givecoin (GIVE)

Proof of Stake Algorithm

Proof of Stake is an algorithm that was designed to provide distributed consensus on a blockchain network. For digital assets which use PoS, the creator of a block is identified according to random factors such as age or more commonly, the amount of coins held.

Proof of Stake was intended as an alternative to Proof of Work, which demands a high amount of electricity in order to solve its mathematical puzzles. To get around the problem, the PoS algorithm attributes power to the proportion of assets held by a miner.

So instead of using up energy to answer Proof of Work puzzles, the PoS crypto miner is restricted to mining a proportion of transactions which are commensurate to his or her ownership stake.