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What is the CryptoNight mining algorithm, and how does it work?

Blockchain technology relies on mining algorithms, such as CryptoNight, to regulate cryptocurrency projects. Find out here what CryptoNight is and how…



Blockchain technology relies on mining algorithms, such as CryptoNight, to regulate cryptocurrency projects. Find out here what CryptoNight is and how it works.

Understanding mining algorithms

Mining algorithms are the backbone of blockchain-based networks like Bitcoin and other protocols. 

In blockchain technology, mining algorithms are necessary for transaction verification and network security. A mining algorithm instructs miners’ computers to follow a set of rules to generate a valid block. 

Proof-of-work (PoW) is the well-known consensus algorithm used by Bitcoin and other cryptocurrencies. In PoW, miners compete using computational power to find a specific hash value that will give them the new block. Application-specific integrated circuits (ASICs) are the specialized hardware necessary for miners to be competitive in such an energy-intensive process, but before ASICs, lower-scale CPU and GPU mining equipment was utilized by users at home.

ASIC mining primarily uses the SHA-256 hash function, which was designed by the United States National Security Agency (NSA) and published in 2001 as a data integrity standard. Bitcoin uses SHA-256 to ensure maximum security and integrity, as the slightest change to the algorithm would alter the mining hash function output.

To keep up with industrial-scale mining operations, many miners join mining pools to combine their computational power, thereby increasing the chances of successfully mining a block. Block rewards are shared proportionally based on each member’s contribution.

Choosing the mining algorithm is a crucial decision for a cryptocurrency project, as it determines the rules and requirements necessary to create and secure the blockchain network, other than how the participants are rewarded with newly minted coins. Examples of other popular mining algorithms include Ethash, used by the Ethereum blockchain, and CryptoNight, used by the Monero Network. 

What is the CryptoNight algorithm?

CryptoNight is one of the fastest mining algorithms and part of the CryptoNote consensus protocol.

CryptoNight is a PoW mining algorithm for CPU and GPU mining, designed to be ASIC-resistant to prevent the centralization of mining power. It hopes to help users mine more efficiently using a combination of hashing functions, including the CryptoNight and the Keccak hash functions. 

Its cryptographic hash function works around the Advanced Encryption Standard (AES), a military-level algorithm for extreme security, making CryptoNight a mining algorithm highly focused on security. Since Monero started using it as the hash algorithm for its blockchain consensus, CryptoNight’s reputation as a security algorithm has strengthened across the crypto world.

The CryptoNight algorithm’s creation is fascinating and recalls the origin of Bitcoin. Its creator — who goes by the fictitious name of Nicolas van Saberhagen — disappeared, just like the famous Satoshi Nakamoto

Given the similarity, many believe that the two developers are the same person, with the mystery further enhanced by the spooky release date of CryptoNote, Dec. 12, 2012 (12/12/2012). CryptoNote was a security protocol and a privacy tool that promoted confidential transactions, non-linkable transactions and ring signatures.

How does the CryptoNight mining algorithm work?

CryptoNight uses the CryptoNote consensus protocol to strengthen privacy so that nobody can tell which participant in the transaction is paying and who is receiving the money.

CryptoNight is GPU-mining friendly, but its characteristics make it ideal for CPU mining. With its set of 64-bit fast multipliers for maximum speed, the CPU architecture is very efficient; moreover, the heavy use of CPU caches guarantees the best performance.

Its working process involves three main steps:

Creating a “scratchpad” 

A large memory with intermediate values is stored during a hashing function. The first input data is hashed with the Keccak-1600 hashing function, resulting in 200 bytes of randomly generated data.

Encryption transformation

It then takes the first 31 bytes of this Keccak-1600 hash and transforms them into the encryption key for an AES-256 algorithm, the highest value within the AES family.

Final hashing

CryptoNight takes the entire data set created by the AES-256 and Keccak functions in the previous step and passes it through the rest of the hash functions. Ultimately, a final hash results from the CryptoNight proof-of-work. This hash has a 256-bit extension or a total of 64 characters.

Why is CryptoNight important?

CryptoNight was designed to give CPUs and GPUs an equal opportunity to mine blocks and discourage ASIC miners’ use.

CryptoNight is important for three crucial reasons: It provides stronger privacy with untraceable transactions, its ASIC resistance feature, and scalability. Most cryptocurrencies, including Bitcoin (BTC), are all but private, as someone’s transactions and balance can be easily traced on the open-source blockchain through a public address

On the other hand, CryptoNight was designed to satisfy more privacy-concerned users who want to execute private blockchain trades. Its creators integrated two crucial privacy tools into the algorithm to achieve maximum security and anonymity: ring signatures and stealth addresses, both developed by the Monero team.

Mitigating growing concerns around cryptocurrency centralization due to ASIC mining rigs was one crucial rationale behind the development of CryptoNight. The project’s developers focused on challenging ASIC dominance and advanced a system where GPUs and CPUs could retain their competitive edge in mining. 

Scalability and high efficiency are also at the core of CryptoNight, which has its computation increased exponentially, guaranteeing greater scaling through faster transactions.

Which cryptocurrencies use the CryptoNight mining algorithm?

Bytecoin was the first cryptocurrency to apply the CryptoNote protocol to its blockchain, but its application on Monero helped the project gain more reputation and notoriety.

A number of cryptocurrencies have integrated the CryptoNight algorithm, with the first-ever example being CryptoNoteCoin, a clear reference to the CryptoNight project. 


Though initially committed to resisting ASIC dominance, the first CryptoNight coin that supported the project’s development announced in 2018 that it would integrate ASIC mining while keeping the algorithm to prevent security and anonymity issues.


Despite Monero no longer using CryptoNight, it was one of its strongest supporters for its stance against ASIC power. Monero inherited CryptoNight as its proof-of-work in 2014, and since then, it has slightly evolved the algorithm, creating CryptoNight-R to intentionally break compatibility with the existing ASICs. 

However, an efficient ASIC-compatible CryptoNight was developed in 2017 by Bitmain, and by 2018, ASICs had rejoined the Monero network. In 2019, Monero changed its mining algorithm to RandomX, which focused on CPU mining.

Electroneum (ETN) 

Electroneum utilizes the CryptoNight mining algorithm, with a notable innovation in its mobile version, allowing users to mine the cryptocurrency not only through the conventional method but also by utilizing their smartphones via a mobile miner.

Other lesser-known projects that implement the CryptoNight algorithm include Boolberry, Dashcoin, DigitalNote, DarkNetCoin and Pebblecoin. However, these projects have been exposed to malicious attacks in 2017, raising concerns around the security of their networks and the reliability of the CryptoNight algorithm.

Different variants were created for the CryptoNight algorithm, and CryptoNight Heavy is one version of the hashing algorithm. It is implemented in various cryptocurrency projects, including Ryo Currency, Sumokoin and Loki. 

However, since CryptoNight Heavy relies on a trustless peer-to-peer network, it may lead to serious vulnerabilities. Since nodes must check every new block’s PoW and spend a significant amount of time evaluating every hash, they may become more vulnerable to distributed denial-of-service (DDoS) attacks, ​​coordinated botnet-targeted activities that overwhelm a network with fake traffic.

What’s ahead for CryptoNight algorithm?

Since its inception in 2012, the CryptoNight algorithm has undergone significant changes, upgrades and slight modifications to accommodate the different cryptocurrency projects until the ultimate version created by Monero, CryptoNight-R, was introduced.

Is CryptoNight still a valid mining algorithm, or has it failed its mission to become an egalitarian tool? All the different versions had one common goal: ASIC resistance and preventing its further dominance in crypto mining. 

Many believe this did not happen, and the project failed to deliver on its original stance. The Monero team stated that the failure was due to security reasons. Since the CryptoNight hash is rather expensive and time consuming to verify, it may represent a DoS risk to nodes as previously highlighted for some of CryptoNight-based cryptocurrencies. 

Others think it did its best to prevent further expansion of ASIC corporate power. It was born as an egalitarian type of algorithm that could guarantee equal rights for people to mine, not only to the corporate world. 

It still works as a mining tool open to everyone, even though the ASIC resistance capability is no longer feasible since the ASICs were able to adapt to successfully mine for this algorithm. Nevertheless, it can still be a good starting point for developing future cryptocurrency projects, especially for users who value privacy and fair mining.

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Bitcoin price must break $31K to avoid 2023 ‘bearish fractal’

BTC price needs to recoup some more key levels before ditching longer-term bearish risk, the latest Bitcoin analysis says.



BTC price needs to recoup some more key levels before ditching longer-term bearish risk, the latest Bitcoin analysis says.

Bitcoin (BTC) held above $30,000 at the Oct. 23 Wall Street open as analysis said BTC price strength could cancel its “bearish fractal.”

BTC/USD 1-hour chart. Source: TradingView

BTC price preserves majority of early upside

Data from Cointelegraph Markets Pro and TradingView followed BTC/USD as it hovered near $30,700, still up 2.5% on Oct. 23.

The largest cryptocurrency made snap gains after the Oct. 22 weekly close, stopping just shy of $31,000 in what became its highest levels since July. 

Now, popular trader and analyst Rekt Capital is keen to see the $31,000 level break. 

“Bitcoin has Weekly Closed above the Lower High resistance to confirm the breakout,” he commented alongside the weekly chart.

BTC/USD annotated chart. Source: Rekt Capital/X

Rekt Capital argued that BTC/USD could disregard the bearish chart fractal in play throughout 2023 next. This had involved the two year-to-date highs near $32,000 forming a doubletop formation, with downside due as a result.

Specifically, Bitcoin requires a “breach” of $31,000 in order to do so. 

More encouraging cues came from the True Market Deviation indicator from on-chain analytics firm Glassnode.

As noted by its lead analyst, Checkmate, on Oct. 23, the metric, also known as the Average Active Investor (AVIV) profit ratio, has crossed a key level.

Bitcoin’s True Mean Market price (TMM) — the level that BTC/USD spends exactly 50% above or below — is now below its spot price, at $29,780. 

“Have we now paid our bear market dues?” Checkmate queried, describing TMM as Bitcoin’s “most accurate cost basis model.”

Bitcoin True Market Deviation (AVIV) chart. Source: Checkmate/X

Institutions awaken in “Uptober"

Analyzing the potential drivers of the rally, meanwhile, James Van Straten, research and data analyst at crypto insights firm CryptoSlate, flagged the potential approval of the United States’ first Bitcoin spot-price-based exchange-traded fund (ETF).

Related: BTC price nears 2023 highs — 5 things to know in Bitcoin this week

While not yet awarded the green light, a U.S. spot ETF is being treated as an inevitability after legal battles resulted in regulators losing sway.

“The potential approval of a spot ETF for Bitcoin has spurred a significant increase in bullish inflows in the crypto market,” Van Straten wrote in an update published on Oct. 23.

He noted that Glassnode data shows inflows via over-the-counter (OTC) trading desks spiking since late September.

“In addition, the Purpose Bitcoin ETF, with its holdings of approximately 25,000 Bitcoin, has observed consistent inflow throughout the past month. Even though these inflows might not be termed as ‘large,’ they denote a positive market sentiment,” he continued.

“This uptick in inflows across various platforms indicates an optimistic market response to the potential approval of a Bitcoin ETF, bolstering the overall landscape of digital assets.”
Bitcoin transfers to OTC desk wallets. Source: CryptoSlate/Glassnode

The largest Bitcoin institutional investment vehicle, the Grayscale Bitcoin Trust (GBTC), continues to see a lower discount to the Bitcoin spot price, having already seen its smallest negative margin since December 2021.

This stood at -13.12% as of Oct. 23, per data from monitoring resource CoinGlass.

GBTC premium vs. asset holdings vs. BTC/USD chart (screenshot). Source: CoinGlass

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

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California bill aims to cap crypto ATM withdrawals at $1K per day to combat scams

A new legislative investigation found some crypto ATMs charging a premium as high as 33%, while a few ATMs had limits of up to $50,000.



A new legislative investigation found some crypto ATMs charging a premium as high as 33%, while a few ATMs had limits of up to $50,000. California legislators have proposed a new bill titled “Digital financial asset transaction kiosks,” calling for a cap on crypto ATM withdrawals of $1,000 per day in light of growing scams. Additionally, starting in 2025, the law would limit operators’ fees to $5 or 15% (whichever is higher). The bill, if approved, would come into effect on Jan. 1, 2024. The bill was introduced after legislative members visited a crypto ATM in Sacramento and found markups as high as 33% on some crypto assets compared with their prices on crypto exchanges. On average, a crypto ATM charges fees between 12% and 25%, according to a legislative analysis. Government officials also found ATMs with limits as high as $50,000, prompting them to take regulatory measures to curb such high premiums and withdrawal limits. There are more than 3,200 Bitcoin ATMs in California, according to Coin ATM Radar. Democratic State Senator Monique Limón, who co-authored the proposed legislation, said the “new bill is about ensuring that people who have been frauded in our communities don’t continue to watch our state step aside” when there are real issues happening. Another provision of the bill would require digital financial asset businesses to obtain a license from the California Department of Financial Protection and Innovation by July 2025 Crypto ATMs are a popular way for people to exchange cash for their choice of cryptocurrency but have become a hub for scams and exploits because of the nature of transactions (i.e., hard cash). Unlike bank and wire transfers, each transaction leaves less of a trail. Related: CoinSmart president says crypto taxes are a ‘little bit more favorable’ outside US Some residents have recently been caught up in such scams, where the scammer persuades the victim to go to a nearby crypto ATM and deposit cash for the crypto of their choice. Some of those affected by ATM scams have lauded the bill and said the low transaction limit would give victims time to realize if they are being duped, reported the LA Times. On the other hand, crypto ATM businesses said the new bill would harm the small operators who must pay rent on their ATMs. The operators noted that the bill fails to address the core issue of the fraud and instead takes a punitive path focused on a specific technology. They warned such a move would shudder the industry and hurt consumers while doing nothing to stop bad actors. Magazine: Bitcoin is on a collision course with ‘Net Zero’ promises

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An airline just launched one of the country’s longest domestic flights

The trip from New York’s JFK to Anchorage International Airport will take over seven hours.



While the title for longest commercial flight in the world will soon be taken over by the 20-hour and 10,576-mile journey between Sydney and London that Australia's Qantas Airways  (QUBSF) - Get Free Report is preparing to launch in 2025, the U.S. is a big country with a number of long-haul domestic flights on its own.

Without even looking at U.S. territories overseas such as Guam or American Samoa, one can spend more than 10 hours in the air and end up only in another state. Some of the longest domestic flights in the U.S. include routes from Boston to Honolulu in Hawaii and Chicago to Alaska's Anchorage.

Related: The World's Longest Flight Is a New Route: Here's Where It Goes

In a move to bring more service from mainland U.S. to Alaska, Alaska Airlines  (ALK) - Get Free Report is about to launch its longest flight yet that is subsequently also one of the longest in the country — the route from New York's JFK to Anchorage International Airport will take over seven hours and cross 3,386 miles.

An Alaska Airlines aircraft.

Image source: Shutterstock

New flight takes travelers to 'land of midnight sun'

The route will debut on June 13, 2024 and take place daily on a Boeing 737-8  (BA) - Get Free Report. The airline recently invested in the plane with the longest capacity in its fleet to be able to serve faraway destinations on the East Coast.

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"We're eager to welcome guests to our great state from the city that never sleeps to the land of the midnight sun on Alaska's new nonstop flight," Jillian Simpson, president and CEO of the Alaska Travel Industry Association, said in a statement. "There's so much to do in Anchorage and in the smaller towns nearby, mapping out your itinerary might be the toughest thing you do before heading west."

The route is part of Alaska Airlines' wider efforts to expand its coverage between Alaska and the mainland U.S. On May 18, it will also launch a nonstop route between Anchorage and San Diego that will take just over six hours and span nearly 2,500 miles. While the airline serves many Californian cities, San Diego's smaller size meant that residents would have previously needed to transfer in Seattle or LA on their way to Alaska.

New routes meant to serve both burgeoning tourist interest and local demand

After adding the new flights, Alaska Airlines expects to have 63 flights a day leaving from Anchorage during the summer of 2024. This is designed to meet the burgeoning traveler interest in the state as well as serve Alaskans who are separated from large American cities by geography.

"Alaskans like to get out," the airline said in announcing the new routes. "Sometimes that might mean hitting all the must-sees in New York City or taking surf lessons in SoCal. We'll make it more convenient for our guests to get there from Anchorage, as well as lots of other places."

For those who are able to make travel plans this far in advance, both the New York and San Diego flights to Anchorage are already available for booking on Alaska Airlines' website. The former starts at $400 each way for mid-week departures, while flying into the state from San Diego will cost from $300.

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