As so, one must assume this issue of centralized mining must be dealt with from the start.Įnter Scrypt-N, an algorithm brought about by Vertcoin. Since miners are required to vote on changes to the network, these would just vote against any change that would render their expensive mining equipment useless, as he would have a direct monetary incentive to do so. However, changing the algorithm after ASICs are built would probably be impossible in Litecoin. As so, Litecoin has failed its initial purpose. Although Litecoin was able to do this with its Scrypt algorithm, it also didn’t last long.Ĭompanies were able to build ASICS for Scrypt despite the high memory requirements and no upgrade or change has been made in the network in order to change this situation. The idea was to employ an algorithm with high mining requirements as a means to bring back CPU and GPU mining. In light of this centralization, one of the most popular altcoins today was created, Litecoin. Since ASICs are specific for the job, they have made it impossible for regular users to mine from their homes due to the difficulty increase they brought to the network. This is because mining companies have an easier time selling their hardware in bulk. Due to this specialized machines,Bitcoin mining has become a largely industrialized practice, available only to those that are capable of hosting large mining operations. In Bitcoin’s case, this algorithm is SHA256. As mining evolved, GPU miners came along and then came ASICs (Application-specific integrated circuit).ĪSICs are basically big calculators that have only one purpose: To solve one or various specific algorithms. When Bitcoin was first created, mining was done in CPUs, meaning that anyone could mine from their home computer. However, this security comes with a cost, centralization. Not only has it withstand the test of time, it is also the network with the most computational power in the world. Today, Bitcoin is considered the safest cryptocurrency out there.
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