The Top 5 Proof-of-Work (PoW) Blockchain Networks After Ethereum’s Merge
12 Oct 2022
It's time to see the top 5 blockchains by market capitalization that continue to utilize the Proof-of-Work (PoW) algorithm to secure their networks after Ethereum's Merge.
As you may already know, Ethereum successfully completed its long-awaited Merge on September 15.
Consequently, the blockchain network with the second-largest market capitalization switched from the mining-based Proof-of-Work (PoW) consensus mechanism to the less energy-intensive Proof-of-Stake (PoS) algorithm.
However, that doesn't mean that every blockchain within the crypto industry will shift from mining coins to validating blocks via staking. In fact, a July 2022 report revealed that PoW chains dominate the market with a 58% share compared to PoS' 12%.
As we have already explained the consensus mechanism's advantages and disadvantages, it's time to see the top 5 blockchains by market capitalization that continue to utilize the Proof-of-Work (PoW) algorithm to secure their networks after Ethereum's Merge.
1. Bitcoin (BTC)
Coin ranking: 1st
Market cap: $366.7 billion
Hashrate: 261.61 EH/s
Mining algorithm: SHA-256
Created by the mysterious Satoshi Nakamoto in the aftermath of the 2008 global financial crisis, Bitcoin is described as a peer-to-peer (P2P) electronic cash system in its official whitepaper.
Bitcoin empowers users with the ability to store, transfer, and spend digital assets via a decentralized blockchain network without intermediaries. While its lack of scalability makes its mainnet less efficient for processing everyday transactions, the Lightning Network on BTC's second layer facilitates inexpensive and instantaneous micropayments between market participants.
Since its launch in 2009, BTC has maintained its position as a leading cryptocurrency by market capitalization.
At the same time, Bitcoin has by far the largest pool of hash rate among all Proof-of-Work blockchain networks at 261.61 EH/s. For comparison, it has nearly 600,000 times the hash power as Dogecoin, which ranks second in this field among the coins we have listed in our article. Due to its decentralization, the BTC network has an extensive history of extreme resilience, with nearly 99.99% uptime.
Miners leverage expensive specialized mining equipment called Application-Specific Integrated Circuits (ASICs) to mine BTC via the SHA-256 algorithm.
2. Dogecoin (DOGE)
Coin ranking: 10th
Market cap: $7.87 billion
Hashrate: 469.83 TH/s
Mining algorithm: Scrypt
Originally this coin started out as a joke to make fun of crypto speculation at the time, Dogecoin (DOGE) has since become a leading cryptocurrency on the market. As the first-ever meme coin featuring the "doge" meme with the face of a Shiba Inu dog, DOGE was launched in December 2013 as the fork of Lucky Coin, which is a fork of Litecoin (LTC).
Dogecoin gradually turned out to be a more serious project than anticipated. While the community has been serving as the hotbed for memeing, cryptocurrency has been advocated by many celebrities and billionaires, such as Elon Musk, Mark Cuban, and Snoop Dogg. In addition to the increased adoption by businesses as a payment method, DOGE has been utilized for many purposes, from charity fundraising to the DOGE-1 mission to the moon.
Regarding its consensus mechanism, Dogecoin utilizes PoW with the Scrypt mining algorithm. Unlike SHA-256, Scrypt makes it significantly more challenging for miners to leverage ASIC rigs. While it is already possible to mine DOGE and other Scrypt-based coins with a few ASIC models, the algorithm enables validators to use their CPUs or GPUs with increased profitability compared to SHA-256 digital assets.
3. Litecoin (LTC)
Coin ranking: 20th
Market cap: $3.71 billion
Hashrate: 455.08 TH/s
Mining algorithm: Scrypt
While Dogecoin's code is based on the Litecoin fork Lucky Coin, Litecoin (LTC) is also a fork of another blockchain: Bitcoin.
Indeed. Litecoin is not much different from Bitcoin. While the latter utilizes the SHA-256 algorithm for mining and generates a new block every 10 minutes, the former leverages the same Scrypt as Dogecoin with a 2.5-minute block generation. At the same time, Litecoin also has a max supply cap of 84 million coins instead of 21 million, with the halving event taking place after 840,000 blocks instead of 210,000 blocks.
However, the similarities between the blockchains have proven beneficial for both Bitcoin and Litecoin, as the latter has been serving as the testbed for future BTC upgrades.
4. Ethereum Classic (ETC)
Coin ranking: 23rd
Market cap: $3.31 billion
Hashrate: 155.7 TH/s
Mining algorithm: Ethash
Ethereum Classic (ETC) was born in the aftermath of the infamous DAO hack in 2016, in which an attacker exposed a vulnerability to steal $60 million of ETH.
Later on, Ethereum developers initiated a hard fork to recover the lost funds. However, due to a disagreement between stakeholders, a small part of the community stayed with the original, unmodified chain (Ethereum Classic), while the others moved to the Ethereum we know today.
While Ethereum shifted to the PoS consensus mechanism, Ethereum Classic still uses PoW with the GPU mining-focused Ethash algorithm.
Interestingly, while ETC suffered multiple 51% attacks in the past due to its lower hash rate, the Merge significantly increased the blockchain's hash power with over 200% growth in less than a month, providing a much-needed boost to the network's security.
5. Monero (XMR)
Coin ranking: 27th
Market cap: $2.6 billion
Hashrate: 2.42 GH/s
Mining algorithm: RandomX
As the fifth-largest PoW coin, Monero (XMR) is a privacy-focused crypto project.
Despite some myths, most digital assets are not anonymous, especially considering the public and traceable nature of the blockchains they reside on. As a potential solution, XMR enhances users' privacy through different technologies, such as Ring Confidential Transactions (RCT), Stealth Addresses, and Ring Signatures.
In terms of mining, Monero uses the RandomX algorithm, which has been quite efficient at eliminating the use of both ASICs and GPUs for block validation. Instead, it is optimized exclusively for CPUs.
While CPU mining significantly decreases the network's hash rate (Ethereum Classic's hash rate is nearly 65,000 times higher than Monero's), it makes validation much more accessible for users due to the lower barriers to entry.
Share this article