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Original title: "Detailed Explanation of Cryptocurrency Mining Algorithms: The "Digital Gold Rush" Password from Bitcoin to Dogecoin" Original source: Dr. Chai said crypto Today, we'll delve into the "core engine" of mining – the mining algorithm. What is a mining algorithm? Why are Bitcoin, Dogecoin & Litecoin mining very different? How should beginners choose the right algorithm for mining? This article will unlock these "digital gold rush" passwords for you in plain language, taking you from scratch into the world of algorithms! 01 What is the mining algorithm? The "mathematical code" of blockchain Mining algorithms, the core rules of cryptocurrency networks, are a complex set of mathematical instructions that guide miners in validating transactions, generating new blocks, and maintaining blockchain security. To put it simply, it is like a "super math problem" that needs to be solved with computing power, and miners who successfully solve the problem can receive cryptocurrency rewards (such as Bitcoin, Dogecoin). > Life metaphor Imagine the mining algorithm as a lock and the miner's hardware as the key. Bitcoin's lock (cryptographic hashing algorithm SHA-256) requires a super strong dedicated key (ASIC miner). Different algorithms determine what tools you need, how much it costs, and how much "gold" you can make. > The core application of algorithms · Verify Transactions: Ensure that each transaction is legitimate, preventing double-spending (spending the same money twice). · Generate blocks: Package transactions into blocks and add them to the blockchain ledger. · Reward Mechanism: Miners who successfully solve the problem receive new coins and transaction fees. · Network security: The complexity of algorithms makes it extremely expensive to attack networks, ensuring decentralization. 02 Why are there different mining algorithms? Since the inception of Bitcoin in 2009, cryptocurrencies have evolved rapidly, giving rise to a variety of mining algorithms. Why are there so many algorithms? There are three main reasons: · Hardware compatibility: Different algorithms have different hardware requirements. For example, SHA-256 is suitable for ASIC miners, while Scrypt and Ethash are better suited for GPUs or CPUs, lowering the barrier to entry for the average person. · Decentralization and security: Algorithm design affects computing power concentration. ASIC-resistant algorithms, such as Scrypt, encourage more people to participate, preventing a few large mining farms from monopolizing the network. · Project uniqueness: New algorithms can make projects stand out. For example, Dogecoin and Litecoin's Scrypt algorithm improves network security through merged mining, attracting more miners. 03 Analysis of mainstream mining algorithms: Bitcoin, Dogecoin, etc Currently, cryptocurrencies use a variety of mining algorithms, each with unique hardware requirements and mining experiences. Here are four common algorithms, focusing on Bitcoin's SHA-256, Dogecoin/Litecoin's Scrypt, and briefly describing other algorithms. 1 SHA-256: Bitcoin's "super problem" > Introduction SHA-256 (Secure Hashing Algorithm 256-bit) is a proof-of-work (PoW) algorithm adopted by Bitcoin, designed by the National Security Agency (NSA). It requires miners to compute a 256-bit hash to find results that meet the difficulty requirements (starting with multiple zeros). > Features · High computing power demand: The computing power of the entire network will be about 859.01EH/s (8.59 trillion hashes per second) in 2025. · Dedicated hardware: ASIC miners (devices designed for SHA-256) are required. · Block time: about 10 minutes > Applicable currency · Bitcoin (BTC) · Bitcoin Cash (BCH) > Advantages and disadvantages · Advantages: extremely high security and huge attack costs; Bitcoin has high market recognition and stable long-term value. · Disadvantages: ASIC miners are expensive and consume a lot of energy > Suitable for people Large professional miners or large mines with cheap electricity rates. 2 Scrypt: "Beginner-friendly" algorithm for Dogecoin and Litecoin > Introduction Scrypt is a memory-intensive algorithm originally designed to be ASIC-resistant. It requires a lot of memory to perform hash operations, reducing reliance on computing power. > Features · High memory requirements: Compared to SHA-256, Scrypt relies more on memory than pure computing power. · Fast block time: about 2.5 minutes for Litecoin and 1 minute for Dogecoin. · Merge Mining: Dogecoin can be mined simultaneously with Litecoin to increase yields. > Applicable currency · Litecoin (LTC) · Dogecoin (DOGE) > Advantages and disadvantages · Advantages: low threshold, GPU can participate; fast block generation and frequent income; Merge mining increases returns. · Disadvantages: ASICs are gradually entering Scrypt mining, and GPU competitiveness has declined; The price of the currency fluctuates greatly. > Suitable for people Newbies on a budget, or players who want to try Dogecoin/Litecoin. 3 Ethash: Ethereum's classic "GPU paradise" > Introduction Ethash is a PoW algorithm used by Ethereum Classic (ETC) and is designed to be memory-intensive and ASIC-resistant, requiring hashing operations on dynamic datasets (DAGs, approximately 6GB). > Features · Memory Dependency: DAG size grows over time, around 6-8GB in 2025. · Hardware: GPUs are mainstream, ASICs are less efficient. · Block time: about 15 seconds. > Applicable currency Ethereum Classic (ETC) > Advantages and disadvantages · Pros: ASIC-resistant, suitable for GPU mining; High degree of decentralization. · Disadvantages: low yield, requires high-performance GPU; DAG growth increases hardware requirements. > Suitable for people Players with high-performance graphics cards who want to try non-Bitcoin mining. 4 Introduction to other algorithms · Equihash (Zcash): Memory-intensive, ASIC-resistant, suitable for GPU mining, with a focus on privacy. · RandomX (Monero): CPU-friendly, ASIC-resistant, encouraging ordinary computers to participate, maintaining decentralization. · X11 (Dash): Combines 11 hash functions, is energy-efficient and secure, supports GPUs and dedicated ASICs. Chart: Comparison of mainstream mining algorithms Note: Hardware requirements and block times may vary slightly due to network dynamics. Litecoin and Dash used GPUs for mining in the early stages, but were eventually replaced by ASICs, and GPUs were largely uncompetitive. 04 Future trends in mining algorithms The evolution of mining algorithms is not only subject to technological advancements but also driven by energy costs, environmental policies, and the concept of decentralization. In the context of the acceleration of global computing power layout, the iteration of chip manufacturing technology, and the diversification of the blockchain ecosystem, future mining algorithm trends may show the following directions: > More efficient algorithms and hardware adaptation As chip manufacturing enters the era of 3nm or even 2nm processes, future mining algorithms will pay more attention to matching hardware performance with energy efficiency ratios. The new algorithm may reduce redundant computation, increase computing power output per watt, extend hardware life cycle, and reduce equipment depreciation pressure without reducing security. > Anti-ASIC design and computing power distribution optimization To prevent excessive concentration of hashrate in large mining farms, more projects may employ CPU or GPU-friendly algorithms. For example, Monero's RandomX algorithm can take full advantage of the cache and instruction set of general-purpose processors, making the ASIC advantage almost disappear. In the future, dynamic algorithms (such as regular adjustments to hash functions or memory requirements) may emerge to curb the economic viability of ASIC development, allowing for longer participation cycles for individual miners. > Green mining and carbon neutrality goals In 2024, about 54% of the world's Bitcoin hashrate will be powered by renewable energy (data source: Bitcoin Mining Council), but energy consumption is still criticized by the outside world. The new algorithm may be more suitable for intermittent energy sources (such as wind and solar) and combined with intelligent scheduling systems to automatically increase computing power when renewable energy is sufficient and reduce load during trough periods, thereby reducing carbon footprint and electricity bills. > balance between PoW and PoS Ethereum completed the "Merge" and switched to PoS in September 2022, with annual power consumption dropping by more than 99.95%, which has aroused the attention of some projects to PoS. However, PoW still has unique advantages in terms of security, trustlessness, and censorship resistance, so hybrid consensus models (such as PoW+PoS or PoW+PoA) may emerge in the future to balance decentralization and energy efficiency. 05 Choose a suitable "Digital Gold Rush" password Mining algorithms are the "mathematical code" of the cryptocurrency world, determining the threshold, cost, and benefits of mining. Different algorithms have varying requirements for computing power, energy consumption, and hardware performance, impacting the profitability of mining. Bitcoin's SHA-256 algorithm attracts professional miners with high security and high yields, but requires expensive ASIC miners and low electricity price support, which is a high threshold for small and medium-sized miners. Dogecoin and Litecoin's Scrypt algorithm provides newcomers with a low-barrier "gold rush" opportunity to get started using GPUs. Algorithms like Ethash, RandomX, and others are designed for ASIC-resistant, helping to attract more participants and promote decentralization. Whether it's challenging Bitcoin's "super puzzle" or testing Dogecoin's "meme wealth," understanding mining algorithms is the first step to success. Original link