Cypherium uses a PoW (Proof of Work) algorithm where a miner (that’s your system) is asked to solve a complex mathematical puzzle by finding a correct nonce (this stands for number only used once and is sometimes referred to as “nonsense”)

You might wonder how the miner is supposed to find this nonce, and how it knows that it has found a correct one the answer is by “trial and error” in other words the miner needs to try allot of them until it finds a nonce that yields an answer that is considered to be correct. Where correct means that it is less than a predetermined target value. This target value determines how “hard” (how many tries on average) it will be to find a correct nonce where a “lower” value is typically harder (there are less nonces that are correct)
At this point you might wonder why the miner is going to all of this trouble and if it is possible to pick a correct value and calculate the correct input (nonce) from that. As you might have expected, it is not and this is also one of the very important characteristics of a deterministic one-way PoW hash algorithm. At this point you might wonder what this is, well a one-way hash algorithm is a complex mathematical function that produces a certain output value when presented with an input value, this output value is always the same for the same input value this characteristic is called deterministic, it is however impossible to use the output value to determine the input value the hash function is one-way. This is also the reason why a miner needs to try many different nonces in order to find the correct one.

So, as you might expect, a PoW miner, like the Cypherium miner needs some serious power in order to get the job done. In order to understand what kind of power we need to know what PoW algorithm Cypherium uses, and that’s Ethash.

As you probably already know Ethash is used by Ethereum and is a memory hard algorithm, meaning that it requires frequent memory access making it quite resistant for ASICS and FPGA’s