Before jumping into our topic, let me explain what a cryptocurrency is and how it uses the blockchain. If you have no idea what a blockchain is, then you gotta read my previously published article. I’ll make it a bit more convenient for you; click on this “blockchain” to give it a read!
So, what is a cryptocurrency, and how it makes use of blockchain?
A cryptocurrency is an encrypted data string that denotes a unit of currency. It is monitored and organized by a peer-to-peer network called a blockchain, which also serves as a secure ledger of transactions. Unlike physical money, cryptocurrencies are decentralized, which means governments or other financial institutions do not issue them. A blockchain provides the validity of each cryptocurrency’s coins. A blockchain is a continuously growing list of records, called blocks linked and secured using cryptography.
Now, you might have got the overall idea of what a cryptocurrency is. Cryptocurrencies make use of different algorithms named hashing algorithms. By the way, Hash is a “message digest” -a number generated from a string of text; the hash itself is smaller than the text; it’s almost impossible to generate another string of text with the same hash value. There are different hashing algorithms used for various cryptocurrencies, such as:
SHA-256 stands for “Secure Hash Algorithm” that belongs to the SHA-2 family. It generates a 256 bit(32 bytes) signature for a text string. Its block processing time is generally around seven minutes and requires hash rates at Giga hashes per second. This mining algorithm was used by bitcoin, the most popular cryptocurrency. Some of the other cryptocurrencies that are mined using this algorithm are:
Ethash is Ethereum’s Proof of Work hashing algorithm. The algorithm is GPU memory intensive to discourage CPU mining and future development of ASIC’s. It uses Keccak, a hash function eventually standardized to SHA-3. The cryptocurrencies that are mined using this algorithm are:
- Ethereum Classic
Scrypt is used in many cryptocurrencies as a proof-of-work algorithm. It was first implemented for Tenebrix (released in September 2011) and served as the basis for Litecoin and Dogecoin, which also adopted its scrypt algorithm. The Scrypt algorithm is more simple and quicker than the SHA-256 algorithm. Scrypt’s hash rate is measured by Kilohashes per second or one thousand hash computations per second. The cryptocurrencies that are mined using this algorithm are:
Equihash is a proof of work mining algorithm that allows people to mine cryptocurrency on standard computers. Equihash has proof-of-work schemes with three parameters n, k, and d, which determine the scheme Equihash-n/k/d and the time and memory complexity of the puzzle solver for it, and seed S, which makes every puzzle unique and solutions incompatible. The cryptocurrencies that are mined using this algorithm are:
- Bitcoin Gold
CryptoNight is a proof-of-work algorithm. It is designed to be suitable for an ordinary computer’s CPU, but currently, there are no special-purpose devices available for mining. CryptoNight was originally implemented in the CryptoNote codebase. CryptoNight can only be CPU-mined for the time being. The cryptocurrencies that are mined using this algorithm are:
Dash developers developed X11 algorithm, and it’s called a Proof-of-Work. The algorithm was based on multiple rounds of different hashes (blake, BMW, groestl, JH, keccak, skein, luffa, cubehash, shavite, simd, echo) making it one of the safest cryptocurrency in existence. The cryptocurrencies that are mined using this algorithm are:
Food for thought:
LiteCoin is considered to be the silver to Bitcoin’s gold.