Before diving into different mining algorithms used in cryptocurrencies, we need to understand what is Cryptocurrency?
Cryptocurrency or crypto is the digital currency the individual can use for their online transactions which are maintained and verified by a decentralized system using cryptography. Cryptocurrency is in electronic form only, and the public ledger maintains the user’s transaction details, their cryptocurrency balances which are entirely stored in the blockchain.
Over the past decade,Cryptocurrency market has valued USD 1.03 billion by 2019 and the prices are rapidly increasing with an average growth rate of 94.56% in 2021.
Different types of mining algorithms used in Cryptocurrency:
Cryptocurrency mining demands mathematical calculations and security which helps to keep the blockchain more secure and trustworthy. All transactions are finalized and executed on the Internet without any centralized authorities to identify the hashing algorithms used.The algorithms used for mining must be powerful to handle the blockchain and provide secured transactions.
SHA-256 Algorithm
SHA stands for ‘Secure Hash Algorithms’ which generates a 256-bit unique signature for each text. The “d” part in SHA-256d denotes the double hash iterations. It is one of the popular hashing algorithms used by Bitcoin. The SHA-256 algorithm mining is performed on ASCI (Application Specific Integrated Count).
The data is fragmented into smaller segments of 512 bits /64 bytes performing cryptographic mixing which results in producing a 256 bits hash code.
The SHA 256 cryptocurrency algorithm is used to mine:
Bitcoin(BTC)
Tigercoin(TGC)
eMark(DEM)
ZetacoinZET()
Scrypt Algorithm
The scrypt algorithm is a password-based key derivation algorithm designed to be computationally intensive which takes a large amount of memory compared to other password-based KDFs. The scrypt algorithm is estimated to be simpler and quicker which raises the resources demand of the algorithm.
Developed in 2016,This algorithm uses proof of work and is designed to prevent custom harder attacks which require a huge amount of memory. The scrypt algorithm is often implemented on GPUs due to their high processing power unlike CPU.
X11 Algorithm
Designed by Evan Duffield the X11 algorithm uses 11 rounds of hashing algorithms with more efficiency than any scrypt algorithm and is also compatible with GPU and CPU miners.
The use of the X11 algorithm increases the security which is not vulnerable to brute force attacks. It runs on low electricity compared to SHA 256 and Scrypt algorithms.
The X11 algorithms are remarkably faster designed to be ASCI resistant and is one of the most advanced hashing algorithms used in Cryptocurrency mining.
NeoScrypt Algorithm
The NeoScrypt algorithm provides increased security, better performance at a low cost. This algorithm was designed to overcome and provide better impenetrable cryptography with less usage of memory.Invented in 2014 Neoscrypt algorithm is ASCI resistant with a more secure environment.
Some prominent cryptocurrencies such as Feathercoin and Crowdcoin make use of the Neoscrypt Algorithm.Together with these there are 47 cryptocurrencies make use of Neoscrypt algorithm :
IPchain
GoByte
CropCoin
CryCash
Quark
Another algorithm in the Cryptographic family is Quark, which is a lightweight algorithm designed by Jean,Luca,Willi and Maria to meet the minimum design criteria, based and implemented on a single security level to minimize the memory usage and give the desired output in a more reliable way.
Quark is made up of three main components u-Quarz, d-Quark, t-Quark. The d-Quark, t-Quark offers more security than u-Quark, which provides at least 64 bit security against collisions and distinguishers.
The algorithm is used mostly in RFID and cryptocurrencies like PVIX and ODIN.
Lyra2
The Lyra2 algorithm was designed in the year 2015 is a password hashing scheme which also works as a key derivation function. The execution is completely based on time and memory requirement and provides utmost security.
The whole hashing process of password is stored in memory which takes sufficient amount of memory space.
The processing time used by this algorithm is similar to scrypt but is a comparatively more enhanced version of it providing more reliability and having parallelism capabilities.
