In the cryptocurrency world, there is one important question almost everyone has searched in Google at some point. It’s the question that makes crypto beginners sit up all day and night, scrolling down multiple web pages finding for an answer. The question that has started a lot of crypto & blockchain wars, and yet, has managed to stay open.
That question is, what is the Cryptocurrency Hashing Algorithms?
Before that get some idea about What is Cryptocurrency or Fiat currency?
A cryptocurrency is a digital currency that runs in a decentralized manner and uses encryption. In simple words, no central bank or government regulates this currency (it's decentralized). It is digital in that it is virtual, not like physical money. And it uses security features in order to avoid counterfeiters, secure transactions, and generate the units of currency.
The validity of each crypto coins is provided by a blockchain. A blockchain is a frequently growing list of records, called blocks, which are linked and secured using cryptography.
Now, you might have got the basic idea of what a cryptocurrency is. Cryptocurrencies make use of different algorithms named as hashing algorithms.
Cryptocurrencies algorithms and hash functions are used to secure blockchain transactions and are a necessary component of the crypto mining process.
In this Blog, we going to explain in detail about the Top Cryptocurrency Hashing Algorithms and How Developcoins works with Cryptocurrency Development platforms using trendy hashing algorithms.
In this article covered by the below topics:
What is Hash?
A hash is nothing but it is a function that converts an input of letters and numbers into an encrypted output of a fixed length. A hash is created using an algorithm and is important to blockchain management in cryptocurrency.
What is a Cryptocurrency Hashing Algorithm?
Cryptocurrency algorithm or hashing algorithm – is a mechanism that encrypts virtual currency or digital currency. Some algorithms can be used in multiple cryptocurrencies because the number of cryptocurrencies today exceeds the number of existing algorithms. Miners decrypt this algorithm (seek hash). If the decryption is successful the new block is generated. This block stores records about transactions carried out in the system and the cryptocurrency blockchain expands. As a result, miners provide blockchain’s work and get rewards. Algorithm decryption turns the body of random data into a primary succession of data that grants cryptocurrency operation. The result of computing operations that miners carry out is called hash.
The hashing algorithm is a Cryptographic hash function, the mathematical algorithm that maps data of arbitrary size to a hash of a fixed size. Hashing algorithm being used for digital signatures and authentication.
Whats is Blockchain Consensus Algorithms?
The consensus algorithms are an important part in the blockchain of any cryptocurrency, these algorithms are responsible for ensuring that the protocols or rules of the blockchain are met. Among the most known algorithms, we can find the POW (Proof of work) or the POS (Proof of stake).
Explore more from here - What are Blockchain Consensus Algorithms & Types of Consensus Mechanism?
How Does Hashing Work?
Blockchains hash every transaction before grouping them together into blocks. Hash pointers link each block to its prior, by holding a hash of the data in the previous block. Because every block links to its prior, data in the blockchain is immutable. The hashing function means that a change in any transaction will produce a wholly different hash, which will alter the hashes of all subsequent blocks. To propagate a change across the blockchain, 51% of the network would have to agree to it. Hence, the term “51% attack”.
Various blockchains use different cryptography algorithms. The Bitcoin blockchain uses the SHA256 algorithm, which produces a 32-byte hash. Dogecoin and Litecoin both use Scrypt, which is one of the faster and lighter cryptography algorithms.
Cryptography is a complex and detailed methodical study of part of the material world, that reaches way as well as the scope of the blockchain technology.
Here are the different types of cryptocurrency hashing algorithms like:
Here we will explain some of the important hashing algorithms which is used in many Cryptocurrencies:
SHA algorithm was initially developed by the US National Security Agency in 2002. In 2009, Proof-of-Work SHA256 was implemented in Bitcoin, and later in other similar cryptocurrencies.
SHA256 algorithm creates a 256-bit hash. The speed and efficiency of decoding based on the processing power of a miner. The possibility of searching hash equals the ratio of miner`s processing power to the power of the whole network. This is why the special mining equipment to improve the power appeared – ASIC-miners.
ASIC in fact monopolized Bitcoin mining and made it impossible or at least rather difficult for a wide range of users to mine BTC.
The SHA -256 cryptocurrency algorithm is used to mine:
Explore more from here - What is SHA-256?
Scrypt is one of the most popular PoW hashing algorithms, along with SHA256. It is currently used in Litecoin, Dogecoin, and other cryptocurrencies. This algorithm is, in fact, more complex, as it requires a lot of memory, available on the mining equipment. That was a big problem for ASIC-miners.
Scrypt aimed to prevent mining monopolization by ASIC, and at first, it really worked out. Today ASIC equipment is also used to mine scrypt-algorithm cryptocurrency, which makes the process more centralized and less available.
Scrypt’s hash rate is measured by KH/s: kilohashes per second, or one thousand hash computations per second.
The Scrypt cryptocurrency algorithm is used to mine:
CryptoNight is a proof-of-work algorithm. It is developed to be suitable for ordinary computer’s CPU, but currently, there are no special purpose devices available for mining.
CryptoNight was initially implemented in the CryptoNote code base. CryptoNight can only be CPU-mined for the time being.
Unlike the Scrypt algorithm, the Cryptonight algorithm depends on all the previous blocks for each new block.
Cryptonight’s hash rate is measured by H/s: Hashes per second, hash computations per second.
The Cryptonight cryptocurrency algorithm is used to mine:
Dagger-Hashimoto - Ethash:
The algorithm dagger-Hashimoto was enabled to mine Ethereum (and later Ethereum Classic). It was related to scrypt, but needed even more available memory. That protected Ethereum mining from ASIC. Then the algorithm was advanced and called Ethash. Users have an opportunity to mine Ethereum using graphics cards. Ethash algorithm hash rate is measured by Mega-hashes per second (MH/s).
The X11 algorithm uses 11 distinct algorithms that are interconnected with each other, that's why it is the name of a chained hashing algorithm. For securing cryptocurrency in the cryptocurrency network, the x11 algorithm uses the “Proof of work” calculations.
The X11 algorithm requires only 30% less wattage because it is 35 to 50% cooler and it is more energy efficient then Scrypt, this is its major advantage, that’s why it is preferred over Scrypt. Its hash rate is measured by Mega-hashes per second (MH/s).
The X11 cryptocurrency algorithm is used to mine:
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