Most cryptocurrencies rely on proof-of-work (PoW) mining to secure their networks from double-spending in a censorship resistant way. In order to maintain censorship resistance, the network of miners must be sufficiently decentralized.
In the early days of cryptocurrency, it became apparent that ASICs were leading to centralization of mining. There were many attempts to create algorithms that would be “impossible” to implement on specialized hardware in response. Litecoin’s Scrypt algorithm is one example of this first wave of ASIC resistance.
However, by 2014 almost every one of these algorithms had an ASIC built for it that was orders of magnitude more powerful than any other hardware on the network. It wasn’t long before most coins were in threat of mining centralization — and the trend was getting worse.
This culmination of events is what inspired a couple of scientists from Luxembourg to look into the problem themselves and see if they could offer any solution. The result was the creation of the Equihash algorithm.
What is Equihash?
Equihash is a proof-of-work mining algorithm that was invented by Alex Biryukov and Dmitry Khovratovich from the University of Luxembourg’s Interdisciplinary Centre for Security, Reliability and Trust (SnT). They sought to create a memory intensive algorithm that would be impossible to implement in an ASIC. This would lower the entry costs for new miners, foster decentralization of miners, and fragment manufacturers of the hardware.
Equihash was first introduced in early 2016 at a symposium on system security in San Diego. Zcash was the first cryptocurrency to implement it in April of that same year. Their team stated that they chose this algorithm for its efficiency, security, and most of all ASIC resistance.
Two of Zcash’s founders, Zooko Wilcox and Jack Grigg, explained in a blog post:
“Equihash is a memory-oriented Proof-of-Work, which means how much mining you can do is mostly determined by how much RAM you have. We think it is unlikely that anyone will be able to build cost-effective custom hardware (ASICs) for mining in the foreseeable future.”
In spite of all the effort and intelligence that went into creating Equihash, it has ultimately failed in its original form. Equihash ASICs hit the market in May 2018 and are now dominating some Equihash coins. Other coin developers have tweaked the algorithm to fend off ASICs, though the machines may be unavoidable in the end.
Equihash Coins (By Market Cap)
- Zcash (ZEC)
- Bitcoin Gold (BTG)
- Komodo (KMD)
- ZenCash (ZEN)
- Bitcoin Private (BTCP)
- Zclassic (ZCL)
- Zelcash (ZEL)
- BitcoinZ (BTCZ)
- Zero (ZER)
- Hush (HUSH)
Zcash is a fork of Bitcoin with added privacy options, shorter block time, a slow start emission, and a founder’s reward (20% of miner income) built into the protocol. Utilizing zero knowledge proofs (zk-snarks), Zcash can offer shielded transactions which hide a transaction’s sender, receiver, and amount. Only a small percentage of users utilize private transactions, and no exchanges support them, leaving the true anonymity benefits a subject of debate. The developers of Zcash have chosen not to devote effort to protecting their network from ASICs.
2. Bitcoin Gold
Bitcoin Gold is a fork of Bitcoin that has changed nothing except for the proof-of-work algorithm. The team’s original goal was to decentralize mining, and indeed they followed this course by altering the algorithm to block ASICs. Recently, the coin has been delisted from some major exchanges such as Bittrex and Yobit.
Suggested Reading : Learn more about Bittrex in our review.
Komodo is a fork of Zcash that was originally intended to be a pure cryptocurrency platform. Some time in 2016, Komodo rebranded as an ICO platform with their own decentralized exchange. Currently their focus is on providing a selectively private and secure platform for issuance and interaction with tokens. Like Zcash, Komodo’s developers have not made an effort to resist ASICs.
4. Horizen (Formerly ZenCash)
ZenCash forked from Zclassic on May 18, 2017. They have since rebranded to Horizen, but maintain the original ticker symbol (ZEN). The goal of the project is to deliver everything that Ethereum can do, but with stronger privacy. Deriving from Zclassic (itself a fork of Zcash), ZenCash has inherited the zk-snarks privacy features. Additionally, ZenCash uses “Secure Nodes” to offer encrypted communication between peers.
Bitcoin Private is a co-fork of Bitcoin and Zclassic by the founder of Zclassic. In this case a co-fork means that the code was forked from Zclassic, but the initial coins were distributed 1-to-1 to any holders of Bitcoin or Zclassic on February 28th, 2018. The coin brought shielded transactions from Zcash, and they changed the algorithm accordingly to stop ASICs.
Zclassic was the first fork of Zcash, beginning in late 2016. The project’s aim was to remove the founder’s reward and slow start mining from Zcash. Since the founder’s reward was controversial from the beginning, Zclassic offers miners a way to opt out of it while still supporting privacy. The team splintered upon the creation of Bitcoin Private, but development hasn’t stalled.
Zelcash is a combination of Zcash and Ethereum, providing zk-snark privacy as well as DAPP support. The coin uses a combination of proof-of-work to secure the blockchain and proof-of-stake for DAPP security. The aim of the project is to build tools and a community for distributed development.
BitcoinZ was created by an anonymous developer that forked the Zcash code base. Their blockchain launched on September 9, 2017 with no premine or ICO. The goal of the project is to be a community driven coin that has the Zclassic spirit, the Zcash core, and Bitcoin fundamentals. The notable changes they have made to the original code are the addition of bigger blocks and tweaking the algorithm to protect against ASICs.
Zero forked from Zcash on February 19, 2017. They’ve made some minor adjustments to the mining algorithm in an effort to resist ASIC production and removed Zcash’s founder’s reward. In the future the team plans to implement staking and reduced block times.
Hush is a fork of Zcash which has removed the founder’s reward and added additional privacy features. The developers added Tor to the protocol to protect users’ IP addresses, as well as a private messaging and list system. There’s also a Counterparty port for Hush which allows users to create and issue assets.
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