Did you have any question like – What are Algorithms in cryptocurrency? What are mining algorithms? What algorithm is used by Bitcoin? & also why is it important to have a cryptocurrency algorithm?
Then you are at the right place – As we have an in-depth article on how mining works and what is the play of cryptocurrency algorithm.
Cryptocurrencies are usually decentralized virtual currencies. They don’t have any physical existence. And most of the time they don’t even rely on any physical entities to calculate their values. Value of a cryptocurrency is a product of supply and demand.Because cryptocurrencies have fixed supply, unlike fiat currencies.
Fiat or traditional currencies are also controlled by the respective governments. They have the power of creating new units as well as destroy when needed.In our traditional economies, there are also central banks. These banks regulate the flow of the monetary units. They also maintain a centralized ledger to settle transactions.But as I said above cryptocurrencies are decentralized. Meaning no particular body holds the power to govern a cryptocurrency. Each and every investor of a cryptocurrency has rights to vote.Also, cryptocurrencies usually have public ledgers, easily accessible by anyone. Cryptocurrencies don’t have centralized institutions like banks either.
But cryptocurrencies still need a mechanism to verify transactions. This consensus process can be done in two ways. Either by using a proof of work algorithm and miners to verify and add transactions to the blockchain.
In this article, we are going to cover only the mining section. And talk about different mining algorithms used by popular cryptocurrencies.
I hope I was able to provide useful information in this article. I could not cover all the hashing algorithms. But I made sure I covered the popular (and profitable) ones in this article.
For the curious souls out there, there are other hashing algorithms like Groestl, Lyra2REv2, Blake (2b, 2s, 14r), LBRY, NeoScrypt, Pascal, Skunkhash etc.