Cryptocurrency mining algorithms
A mining algorithm is an order in which a certain cryptocurrency is mined. The first cryptocurrency - bitcoin - was mined using the SHA-256 algorithm. Today there are many different mining algorithms, of which there are 3 most popular. Let's take a closer look at each of them.
- SHA-256 is a cryptographic hash function that is used to solve the problem of mining bitcoin on a CPU, GPU, or a specialized processor. A hash is the signature of a new block of data, which consists of thousands of strings. It takes a lot of time to find one suitable hash combination for them. The more powerful your software is, the faster you pick it up. All ASIC miners for bitcoin use this algorithm. The upside and downside of SHA-256 is that there is an opportunity to implement software solutions that will make this mining many times more efficient. So bitcoin was first mined on CPU, then on video cards, and now only on expensive specialized devices. This has led to a great centralization of bitcoin mining.
- Scrypt. The second most common mining algorithm. It is designed in such a way that more different computer resources are needed for mining. For example, when mining via Scrypt, both the amount of memory and the size of the video cards installed on the computer matter. This partially solves the problem of centralizing cryptocurrency mining.
- X11. You can guess from the name that the X11 algorithm has 11 hashing steps with different hash functions. This makes it one of the most secure algorithms in the cryptocurrency world. Because of the 11 layers of this algorithm, it is impossible to create a special device for mining. That's why X11 mining is now done on video cards and is available to almost everyone.
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