Top most used mining algorithms in blockchain (2024)

LMining algorithms are the algorithms in charge of making possible the cryptocurrency mining. Normally these algorithms are cryptographic hash functions very complex and they can adjust the mining difficulty. A process that makes it more or less difficult for you to put together the puzzles that must be solved by the miners. This is to get miners to do complex computational work that, once solved, allows them to access a reward for that work.

In this article we will show some of the most used mining algorithms in the world of cryptocurrencies, showing some of their characteristics and potential.

Mining algorithm: which are the most used?

SHA-256, the Bitcoin algorithm

SHA-256 is a cryptographic algorithm that began its history as a hashing system for data. Basically, what SHA-256 does is take a given amount of information and summarize it into a single alphanumeric block 64 characters long that is generated deterministically.This means that if you enter the same data an infinity of times you will have the same output each time.

This is vital to protect data integrity, as the slightest change completely alters the output of the SHA-256 hash. It is for this reason that it is used extensively on the Internet to protect documents and other valuable information that you want to keep intact. It should be noted that SHA-256 is not an encryption algorithm, but rather it is only a data integrity algorithm and the only way to check it is to enter the same information obtaining the same result. Likewise, the opposite process is practically impossible to carry out.

SHA-256 was designed by the US National Security Agency (NSA) and published by the National Institute of Standards and Technology (NIST) in 2001 as a data integrity standard. The system can be implemented to be generated by means of CPUs, GPUs, FPGAs and ASICs. Hence, Bitcoin mining, which uses SHA-256, can be done on all these media without problems.Of course, the power is different in each case, the least being that which we can obtain in CPUs, passing through FPGAs, GPUs and finally ASICs, which are the ones that currently dominate SHA-256 mining.

Cryptocurrency projects using SHA-256 as the mining algorithm include Bitcoin, Bitcoin Cash, Bitcoin SV, Namecoin (using merged mining), RSK (merged mining), and Stacks (merged mining). There are many other projects that use SHA-256, but most of them are projects without any innovation and therefore of little value within the community.

Ethash, “the Ethereum algorithm”

Ethash was Ethereum's Proof of Work mining algorithm. Proof of work on Ethereum was completely disabled with The Merge, and now Ethereum is secured using proof of stake instead.

This was the hash function designed for Ethereum and one of its main characteristics was its high memory requirement thanks to the use of an extended DAG for mining. In principle, Ethash was designed to prevent ASIC mining. However, the cost of memory was so high that Ethash mining was still possible with GPUs, where GPUs benefit from the large amount of memory they have, making it easy to create the DAG for mining.

Ethash relied on a function called Keccak or SHA-3, in addition to using versions of the Dagger-Hashimoto hashes, so the algorithm was initially known as Dagger-Hashimoto and later changed its name to Ethash.

Scrypt, the most complete cryptographic function

Scrypt is a hash/encryption function designed by well-known FreeBSD developer Colin Percival. The feature was designed to be part of a commercial product he had created calledtarsnap, whose purpose is to create remote data backups for users and companies. Tarsnap is a product known for its very high security and speed, something in which Scrypt plays a fundamental role.

Scrypt is an extremely optimized hash function designed to process large amounts of data, offer cryptographic guarantees of integrity and also facilitate data recovery if necessary.Its ability to do secure encryption and decryption adds extra functionality that other hash functions do not have, which is why Scrypt is considered one of the most complete and secure functions that exist, as well as being a free software implementation, thanks to its license BSD 2. Scrypt is an algorithm that can be mined using implementations for CPUs, GPUs, FPGAs, and ASICs, the latter being the most powerful.

Among the main cryptocurrencies that use Scrypt as a mining function are Litecoin and Dogecoin.

X11, the Dash algorithm

The X11 mining algorithm is not actually a hash algorithm, but the union of 11 of them that are applied serially so that the final hash is obtained at the end. The idea behind its creation is to ensure the complete security of the resulting hashes and to add a certain complexity that will prevent the creation of ASICs that centralize mining.

It is worth saying that the first idea is considered by many cryptographic specialists, as a complete absurdity.This is because many algorithms used in X11 do not even have formal verification of their operation.This undermines the security of the system by betting on a "security by obscurity" scheme, since that obscurity is the lack of specific cryptographic tests that ensure that these functions are really secure.

While the second idea of ​​offering ASIC resistance was true, it didn't take long for ASIC developers to overcome this challenge and start offering ASICs for X11. In response, developers began creating variations on the X11 algorithm that prevented ASIC mining until a future firmware update would get the machines back up and running. From these unproductive efforts, derivatives such as X13 (applying 13 different hash functions), X15 and even X17 were born.

The X11 algorithm was designed by Evan Duffield, the creator of Dash, being the first cryptocurrency to use X11 and the only currency of any value to use it.

Equihash, an algorithm based on a complex mathematical problem

Equihash was created thanks to the work of Alex Biryukov and Dmitry Khovratovich, who sought to create a hash algorithm that would offer resistance to ASIC mining. To achieve this, Biryukov and Khovratovich used a curious mathematical problem on which they designed their hash function: the "Birthday Problem" and the results of their work were presented in 2016 at the University of Luxembourg. This project was run by a group called CryptoLUX, of which they were a part in theSymposium on Security of Networks and Distributed Systems 2016 in San Diego.

The “Birthday Problem” tells us that:

Out of a set of 23 people, there is a 50,7% chance that at least two of them have birthdays on the same day. For 57 or more people the probability is greater than 99,666%. Strictly speaking this is not a paradox since it is not a logical contradiction.

However, it is a mathematical truth that contradicts common intuition. Many people think that the probability is much lower, and that it takes many more people to reach the 50,666% probability. If a room had 367 people, by the Pigeonhole Principle we know that there would be at least two people having a birthday on the same date, since a normal year has 365 days, and a leap year has 366.

Based on this, the Equihash function leads computers to perform memory-intensive operations that make parallel computation difficult. This is because it is extremely expensive to create ASICs with large amounts of high-speed, high-bandwidth memory.

As a result, Equihash is one of the most problematic ASIC resistant algorithms.In fact, even today this algorithm represents quite a challenge for ASICs (which finally managed to overcome the resistance), since they are not capable of reaching high levels of solutions to the problem, which makes these devices quite energy inefficient, albeit much faster than their CPU, FPGA and GPU counterparts.

The main currency that uses this algorithm is Zcash, although it is also used by Bitcoin Gold and Komodo.

Cryptonight, the first algorithm for anonymous coins

CryptoNight is a unique algorithm for a well-known reason in the community: it is meant to make it easy to build anonymous coins. In fact, the person (or group of people) who built the algorithm is a complete mystery, on the same level as Satoshi Nakamoto. Different users claim that the creator of CryptoNote (the base consensus algorithm for CryptoNight) is Satoshi Nakamoto himself acting under a new pseudonym:Nicholas van Saberhagen. To add more mysticism, CryptoNote was presented on 12/12/12, a complete riddle that no one has been able to solve to this day.

In any case, CryptoNight was developed as a hash function for CryptoNote and the first coin to implement it was Bytecoin. The algorithm is designed from the ground up to provide a very high level of privacy, anonymity, and resistance to ASICs and GPUs.To provide a high level of security and anonymity, one of its main features is its high resistance to ASIC and GPU mining, making it extremely difficult to develop for these devices.

However, with the abandonment of Bytecoin, Monero, the second coin to implement the function for its mining, took the reins of development thanks to a larger and more specialized development group, together with a more active community. Thus, Monero became the main developer of CryptoNight and constantly updated it to prevent ASICs from wreaking havoc against it. Despite the effort, CryptoNight lost the battle and understanding this point, the Monero developers announced that they were working on its successor, declaring CryptoNight to be abandoned soon.

Currently, CryptoNight is a little used and abandoned algorithm. In fact, most of the projects that use it are abandoned.

RandomX, the evolution of CryptoNight

The Monero community, seeing that it had lost the battle in CryptoNight, understood the need to develop a new algorithm from scratch. In this way, a new front could be opened for privacy coins.

The result of all that effort is RandomX. This is an algorithm for privacy coins so complex that it is theoretically impossible to implement in an ASIC.In fact it is extremely complex to implement efficiently for GPUs and FPGAs.

RandomX owes its operation to an implementation that works based on a computational introspection virtual machine. Basically, RandomX creates a virtual machine with certain cryptographic characteristics that are randomly generated. On this virtual machine, its cryptographic function for Monero mining is launched. All of this makes RandomX demanding. It requires RAM memory capacity, CPU instructions and their cache, as well as the cryptographic calculation necessary for its operation, which is based on AES-256, and also makes use of the Blake2b and Argon2d functions.

The implementation has been so successful that almost 3 years after the algorithm was created, there is still no efficient implementation for GPUs and FPGAs. And indeed, the ASCI implementation is still theoretically impossible. All this ends up making the use of these tools unfeasible, leading everyone to mine with the CPU, the goal of RandomX.