Recently, mining is a fairly popular form of earnings, but the vast majority of people who are just starting out on this path do not know much about the hardware. This is absolutely normal, since the nuances and junk of mining are a rather complex and extensive topic. Within the framework of this article, we will talk about such a concept as algorithms in the mining: what is it, what kinds of them are there and how do they differ from each other?
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The development of an encryption algorithm is a rather laborious process, which is exclusively for specialists in the field of cryptography. So, in order to understand what an algorithm for mining is, let’s recall a little how the coins are arranged. Digital currencies are built on the basis of blockchain technology, which involves hashing of data in a chain of blocks. But directly the algorithm is responsible for decoding and reliability of the data.
The main task of the miners, for which they receive coins, is just the maintenance of the network in a given algorithm. There are several dozens of them.
But it is worth noting that to achieve reliability of the network, one encryption cannot be avoided. We’ll recall that the blockchain is built on the principles of equality, where each participant can make his entry to the register, so their reliability should be checked. For these purposes, the consensus algorithm is used. There are several, but by right the two most popular are:
- PoW – proof of the work done;
- PoS – evidence of a share.
It should be noted that in the field of cryptography new discoveries occur every year, and accordingly new and more efficient encryption algorithms appear. Newer solutions often receive protection from specialized equipment for mining (ASICs). The fact is that with the help of this equipment (and with a decent start-up capital) you can take 50% of the processing power of the network and deprive it of the basic principle of cryptocurrency – decentralization. Unfortunately, the first coin comes to this edge closer and closer.
Within the framework of this material, we physically cannot describe all the algorithms of hashing, we just dwell on the main and most common ones on the market. So, let’s start:
- SHA-256 is a pioneer in the market, as it is used to support the network of such a giant as Bitcoin. By the way, with normal video cards here (in the BTC network) you will not be able to mine anything, as the complexity of the network has long been adjusted to the industrial scale of specialized equipment. It is quite reliable and time-tested, for this reason it is still used both in various forks of the bitcoin and in other decentralized projects.
- Scrypt is a very popular algorithm, because it built one of the most popular altcoins – Litecoin. It was fairly common and popular with the miners until there was no ASICs for it. Nowadays, this algorithm is not suitable for home mining.
- X-11 is the main tool for the operation of one of the most anonymous cryptocurrency – Dash. Until last year, digital coins, which worked on the basis of this algorithm, had perfectly been mined with conventional video cards. The situation changed with the beginning of the release of the ASICs.
- Cryptonight is the foundation for another anonymizer in the crypto-currency world – Monero. This algorithm is reliably protected from specialized equipment, so can be mined using ordinary CPUs and video cards.
- Dagger Hashimoto (Ethash) is the main second coin in the industry. It is protected from ASICs, but recently rumors began to circulate about the release of special equipment for it. If they are confirmed, then it will make significant adjustments to the mining of the Ethereum.
In this article we have dealt with the basic algorithms of data encryption in the most popular cryptocurrencies. Since the industry is only at the initial stage of its development, literally every year there are new solutions for hashing data and achieving consensus within the blockchain.
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