Each cryptocurrency uses its specific cryptographic algorithm, which is decrypted by mining equipment in order to ensure blockchain functionality, transaction processing and to receive therefore a remuneration in form of certain cryptocurrency coins.
Each cryptocurrency uses its specific cryptographic algorithm, which is decrypted by mining equipment in order to ensure blockchain functionality, transaction processing and to receive therefore a remuneration in form of certain cryptocurrency coins. Some algorithms are more popular and are used for several different cryptocurrencies (blockchains).
The most popular cryptographic encryption algorithms today are as follows: DaggerHashimoto, Scrypt, SHA256, ScryptNf, X11, X13, Keccak, X15, Nist5, NeoScrypt, Lyra2RE, WhirlpoolX, Qubit, Quark, Axiom, Lyra2REv2, ScryptJaneNf16, Blake256r8, Blake256r14, Blake256r8vnl, Hodl, Decred, CryptoNight, Skunk, Lbry, Equihash, Pascal, X11Gost, Sia, Blake2s.
As you can see, the list of algorithms is quite extensive, we'll tell you more about the most popular and reliable ones:
SHA256 is the base algorithm of the classic bitcoin, video cards are no longer enough to work with this algorithm, because the Chinese have invented a special equipment for it, ASIC (application specific integrated circuit). Many bitcoin copying cryptocurrencies, for example, the recently introduced BitcoinCash, are based on this algorithm.
Scrypt – Litecoin, the ‘digital silver’, is based on this algorithm. At one time this algorithm was an excellent alternative, when ASICs were designed for SHA256 only. But time is getting on, new Scrypt-ASICs have appeared, and this algorithm is also unavailable for most miners.
Ethash (DaggerHashimoto) is the encryption algorithm which is applied for Ethereum cryptocurrency. To work effectively, it is necessary to have a video card with a large RAM capacity preferably based on AMD microprocessors, although Nvidia 10 series copes with DaggerHashimoto. X11 is used in Dash coin and is available for modern video cards. However, at the end of 2017 — at the beginning of 2018, first series of ASIC miners for Dash will appear.
Decred is a modification of Blake256 algorithm applied in Decred cryptocurrency. Mining on video cards is possible. In most cases, Decred mining is launched in parallel with DaggerHashimoto in the Claymore’s Dual Miner program.
CryptoNight – Monero works based on this algorithm. The algorithm is notable for the fact that it is relatively well calculated on processors. Specifically for the moment, Intel Xeon E3 processor brings me about a quarter of a dollar a day (comparable figures for Intel Core I7). It’s a funny money, but a crypto investor should keep any machine mining at least in the background.
Equihash is the base for Zcash currency, which is nowadays quite popular among video card miners, due to the fact that the Ethereum (leader among GPU miners) network complexity increased greatly.
X11Gost is the base algorithm of Sibcoin cryptocurrency, which is also called ‘Siberian Chervonets’. In fact it is a fork, the Russian equivalent of the Dash currency. I will not go in cryptography, but just note that the algorithm is based on a hash function in accordance with GOST R 34.11-2012.