An overview of the Ethash algorithm for coin mining

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The cryptocurrency is based on a consensus mechanism that determines its properties. The Ethash algorithm was developed for Ethereum and was first called Dagger-Hashimoto. After several updates, it was renamed. The list of coins on the Ethash algorithm has grown significantly. In 2023, 32 blockchains and ERC-20 tokens are using it. The algorithm is based on the operation of directed acyclic graphs (DAGs). Ethash wastes a lot of RAM but produces a large amount of cryptocurrency. Therefore, mining on video cards remains popular, despite the emergence of powerful ASICs.

Features of the Ethash algorithm

The algorithm makes high demands on the RAM (RAM) of the video card and makes it difficult to mine cryptocurrency on asics. In this way, developers preserve the decentralization of the network and prevent monopolization of the digital market. Powerful asics increase the risk of a “51% attack”.

Ethash is based on 2 algorithms:

Dagger – developed by Vitalik Buterin. The mechanism shows high performance even with increasing blockchain complexity. Dagger is vulnerable to asics, so it is effective only when paired with Hashimoto. The algorithm is demanding on GPU memory.
Hashimoto – created by Thaddeus Driii. The mechanism requires a large amount of RAM to write and decrypt information. Therefore, to find a hash, you can’t endlessly search random values. This greatly complicates the work of asics.

Ethash is characterized by such features:

The speed of mining a new block is about 15 seconds. Nodes communicate with each other to verify the solution. This creates a delay that does not depend on the power of the equipment.
The developers provided for mining on the processor. However, in 2023, the complexity of the network is such that mining coins on the CPU is unprofitable.
On the video card you need to install a DAG file, which grows by 8 megabytes every 30 thousand blocks (about 125 hours).
RAM requirements are constantly increasing due to the increasing complexity of the network. In 2023, Ethereum mining on Ethash requires graphics cards with 4 GB of memory or more.
A large amount of energy is required to operate and save the last fragment of the DAG file.
Transaction processing time is 1 minute (6 network confirmations). Miners are looking for combinations at the same time. There may be a situation when 2 vorkers find a hash. To prevent blockchain backtracking, the longest chain is considered correct.

An overview of the Ethash algorithm for coin mining — Ethereum blockchain growth dynamics in 2022

History of emergence

The developer of Ethash is considered to be Vitalik Buterin. However, he created only a part of the algorithm – the Dagger mechanism. It was based on directed acyclic graphs (DAGs), which gave asics a slight advantage over GPUs. But the mechanism was vulnerable to hardware acceleration of shared memory because it allowed easy parallelization of computations. This aspect made it easy to create ASICs for Dagger networks.

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To remove the vulnerability, Buterin combined the development with Thaddeus Driya’s Hashimoto solution. He called it a proof-of-work algorithm with input and output binding. This means that Hashimoto-based intelligent analysis uses pseudo-random selection of items from a large shared dataset.

The new solution was called Dagger-Hashimoto. It created sequential chain elements that could be compared to a tree with many branches. This made it difficult to create a new block. It was almost impossible to get a hash by chance without trying many variants.

Over time, Dagger-Hashimoto was modified, which led to a new algorithm – Ethash. The metadata of the last block was additionally hashed using a random Nonce value. This makes it more difficult to find the correct hash value.

In 2023, Vitalik Buterin plans to abandon the Ethash algorithm and replace it with Proof-of-Stake.

Principle of operation

To ensure the stability of the blockchain, the system encrypts blocks according to certain rules. Miners search for the correct value. They receive a reward for this, the size of which depends on the complexity of the network. In Ethash, a new block is created as follows:

The system takes the header from the previous cell in the chain and the value of Nonce (a random number). The data transitions to SHA-3. This function generates a 128-byte array of decisions.
The system determines which 128-byte page from the DAG file to find.
The engine adds the sought part to the mix for mixing.
The previous 2 steps are repeated 64 times.
The system processes the resulting data array to form a short 32-byte mix.
The algorithm compares the result with the target level. If the digest mix is less than or equal to the target, Nonce is recognized as successful and transmitted to the network. Otherwise, the system selects a new value randomly or through adding a unit to the previous index. The algorithm is restarted with a different Nonce.

Ethash is popular with digital currency developers. In 2023, 32 coins most ERC-20 tokens run on the algorithm. This is convenient for miners. It is possible to switch the technique to mining another cryptocurrency with minimal costs.

Mining on the Ethash algorithm

In June 2022, Ethereum mining requires graphics cards with RAM of 4 GB or more. To work with the blockchain, you need to download the entire data chain (345.17 GB). This consumes a lot of energy. To increase productivity, miners gather farms of at least 5-8 video cards.

AMD graphics processors (especially with the latest generation Polaris architecture) are the most efficient in working with the mechanism.

Minimum video card requirements for etherium mining in June 2022:

Working memory – 4 GB or higher.
Frequency – from 1200 MHz.
Hash rate – 22-26 Mh/s.
Up-to-date versions of installed drivers.

The table summarizes the GPU specifications for EHT mining in 2023.

Video card	Power (Mh/s)
RX-470 Sapphire Nitro+ 4096 Mb	24
RX-480 Sapphire Nitro+ 8192 Mb	25
GTX-1070 Palit 8192 Mb	28
R9 Fury-X ASUS 4096 Mb	27
R9 Fury-X Sapphire 4096 Mb	27

Vitalik Buterin created an algorithm to counter ASICs. However, in 2018, the first ASIC for Ethash appeared. In 2023, several powerful integrated circuits for Ethereum mining are on the market.

ASIC	Hashrate (Mh/s)
Innosilicon A10 Pro	500
Innosilicon A10 ETHMaster	485
Antminer E3	180

Asics are expensive (from 500 thousand rubles), but the payback period of the devices does not exceed a year. However, most miners in 2023 mine ETH on GPU. A home farm on video cards can be assembled for 200-300 thousand rubles and gradually buy processors for the profit from mining.

Developers are ready to fight for decentralization of the blockchain. If they change the mechanism, miners on video cards will easily adjust to the new rules, and asics will become useless.

It will take time to create other integrated circuits. Vitalik Buterin has been working for several years to keep the ETH network decentralized and plans to move the cryptocurrency to PoS.

Coins based on the Ethash algorithm

At first, the consensus mechanism proposed by Buterin was applied only in Ethereum. In 2023, there are 32 distributed networks running on Ethash, including:

Ethereum Classic. The cryptocurrency was created in 2016 as a result of the ETH fork. The coin also runs on the ETH blockchain, but has differences – limited issuance, increased security and transaction speeds.
Pirl. The developers of the coin combined master notes and the etherium algorithm. The cryptocurrency works on smart contracts.
Ubiq. The asset appeared in 2017 after another fork of etherium. The developers prioritize the security of the network.
Expanse. Decentralized open-source cryptocurrency is used to create applications.
Callisto. A modification of Ethereum Classic is developed to increase the scalability of ETH.
Metaverse. The Chinese project creates a common technology platform for companies and individuals. Users can create tokens, exchange them, confirm identity, ownership and more.

In addition, thousands of tokens issued on the ETH blockchain can be mined on Ethash:

ERC20.
ERC721.
ERC777 and others.

How to mine on the Ethash algorithm

In 2023, you can use such equipment for mining digital currencies:

Video cards. Only a farm of 5 or more powerful GPUs will give the result. Due to the high prices for equipment and the decline in the crypto market, the payback is 2-3 years.
Ethash-miners. Powerful devices with a hash rate of 500 MN/s allow you to earn $40-60 per day. The device pays off in about a year.

Before you start mining, you need to prepare yourself:

Conduct calculations in an online mining calculator. This will help to assess the feasibility of mining the asset in the current situation.
Assemble the installation for mining.
Choose a software.

Mining coins can be done alone or through a pool. In the first case, the miner will receive the reward for the block completely. In 2023, the complexity of the network is such that only large miners with hundreds of graphics cards or asics are able to compete with the pool. A miner with a small hashrate can wait weeks for a reward.

A block found pays 2 ETH. If a miner computed a hash at the same time as another user, the rate drops to 1.75 ETH. Transaction fees also go to the miner who found the block first.

Pool mining is a more popular way to mine ETH. The user buys and sets up equipment and connects to the service. The pool distributes rewards daily, taking into account the power of the participant. For this, the platform takes a commission of 1-3%.

You need to choose a service according to such criteria:

The number of participants. The popularity of the pool indicates the trust of users.
Total hash rate. Powerful platforms more often find a valid hash.
Order of award distribution. In 2023, large pools pay per valid hash (PPS) or total number of decisions made (PPLNS).
Location. If ping exceeds 100 ms, balls may reach the platform with a delay.
Commission size. In 2023, platforms charge 2-3% of revenue for services.

A list of active pools can be found on the MiningPoolStats monitoring site. In June 2022, Sparkpool, Ethermine, and F2pool are the leaders in ETH mining. These platforms control half of the network’s capacity.

The complexity of the Ethereum network in 2022

To set up mining, it is better to choose the software recommended by the pool. Download programs should be downloaded on the developers’ website to eliminate the risk of virus infection. In 2023, such mining programs for ETH are popular:

Phoneixminer – universal software, suitable for AMD and Nvidia graphics cards.
CGMiner – the program is compatible with different hardware (GPU, ASIC, FPGA). CGMiner works with macOS, Linux, Windows operating systems.
Claymore – allows you to mine 2 coins simultaneously (for example, Ethereum and Siacoin, Decred, Pascal, Lbry).
Cudo Miner – the program is suitable for beginners. There is a graphical interface, you don’t need to learn how to work with the console. It supports Linux and Windows versions.

Summary

Despite the growing complexity of networks and competition, the mining business is popular with professionals and amateur beginners. Coin mining is easy to set up. It is a relatively stable system that generates passive income. Of the disadvantages – difficult repair of equipment, noise, the risk of rapid transition of ETH to PoS.

In 2023, etherium is mined on the Ethash algorithm. This solution allows you to perform hashing on a slow processor in a short time. On devices with a large amount of RAM and high bandwidth, the mechanism works much faster. By imposing acceleration on powerful processors using the same memory, there is a small benefit for forming a single block. This is how developers support decentralization of the network.

In 2023, the Ethereum team plans to move the asset to PoS. After that, miners will be able to mine other coins on the Ethash mechanism.