SHA-256 vs. Scrypt: Which Mining Algorithm Reigns Supreme?
The SHA-256 and Scrypt algorithms are both hashing algorithms used for mining different digital coins that are compatible with their designs. Bitcoin and Dogecoin are key examples of cryptocurrencies mined on the two algorithms, respectively.
While the SHA-256 might hold a record of first market penetration as a result of Bitcoin’s early market dominance, the Scrypt algorithm still goes toe-to-toe with it on some critical matters. For clarity’s sake, I would love to emphasize that other digital coins enjoy the services of both algorithms, respectively, only that in the course of this article, you just have to fall in love with Bitcoin and Dogecoin because you will see them being used more often than usual.
With that out of the way, let’s make progress. I believe you are pumped and at the same time intrigued to delve straight into the comparison of both algorithms to see who eventually emerges with the plaque of the best hashing algorithm ever. Before that, let’s quickly explain what a hashing algorithm is, and what it does.
What is the Hashing Algorithm in the Crypto Market?
Think of it as some sort of mathematically designed function that converts data imputed into a fixed-length string of characters. This mathematical design and setup is what allows the mining community to secure transactions, maintain the blockchain integrity, and enable the cryptocurrency involved to validate block rewards through Proof of Work (PoW), Proof of Stake (PoS) and other Consensus mechanisms.
So you see, my friend, the hashing algorithm decides a whole lot, and this is why discussions around it should not be ditched or trivialized. It is the founding pillar of the mining cryptocurrency ecosystem.
Understanding the SHA-256
SHA-256 is the initials for Secure Hash Algorithm 256-bit. It was developed by the NSA and quickly adopted by Bitcoin up to date as its cryptographic algorithm. In other words, Bitcoin’s whole network architecture is built on the SHA-256 algorithm, its consensus mechanism, wallets, and other key features it is known for are SHA-256 compatible.
The SHA-256 algorithm was designed to meet the need for raw computational abilities. It is not as memory intensive like its other counterparts that require much memory space. This quality made it easily adopted by CPUs, GPUs, ASICs and other mining technologies.
A Breach in Protocol?
The early years of Bitcoin saw miners mining with CPUs and GPUs until ASICs broke out and raised the bar, so much so that mining was done by the select few who could afford and fund the capital-intensive miners. Nonetheless, SHA-256 supported all mining technologies, dating from early usage of CPUs to ASIC invasions.
The Scrypt Algorithm
The Scrypt algorithm was designed in 2009 by Colin Percival. The central idea behind its creation was to combat ASIC dominance, hence its memory-intensive ability, proving resistance to ASIC mining. It was able to see off this feat as it progressed through the years; however, at some point, the Scrypt algorithm soon gave way to ASIC penetration.
Litecoin and its close relative Dogecoin adopted the Scrypt algorithm in 2011 and 2013 respectively. The most likely reason they adopted this algorithm was probably because the Scrypt algorithm was Memory intensive and had faster block time. (2.5 min for Litecoin and 1 min for Dogecoin).
Why Did Litecoin and Dogecoin Choose the Scrypt Algorithm?
Although this point was highlighted a bit in the preceding sections of this article, we’d love to go extensively and delve further into unveiling the motivating drive behind the adoption of the Scrypt algorithm by Litecoin and Dogecoin.
Merged Mining Properties
This point sticks out more clearly than the others if you ask me because this transition in mining technology saw a kind of collaborative mining between Dogecoin and Litecoin on the same mining equipment with no extra cost. The outcome is that miners earn more rewards faster than mining just one singular coin.
Reduction in Power Consumption
Power is one of the most considered factors put into consideration before running into any mining exercise. During its early stages in the market, Scrypt was more powerful and energy-efficient on GPUs than other algorithms.
Faster Block Time
Litecoin and Dogecoin have a block time of 2.5 minutes and 1 minute respectively which is preferred a million times over Bitcoin, which has a block time of 10 minutes. The lesser the block time, the more frequent block creation happens. All of these use fewer resources per hash.
Decentralization Agenda
One of the agendas that necessitated the quick adoption of the Scrypt algorithm by Litecoin and Dogecoin was the desire to combat the ASIC dominance on the SHA-256.
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Conclusion
Although both SHA-256 and Scrypt algorithms aren’t the only mining algorithms in the crypto space, their impacts still dominate. There is no clear-cut preference between both as they are masters in their preferred areas of coverage.