Lyra2 Algorithm | cryptocurrencies, blockchains & live prices

Lyra2 is a family of memory-hard proof-of-work hashing schemes built around the Lyra2 password hashing function, which was a finalist in the Password Hashing Competition (PHC). The algorithm operates by filling a large memory matrix with pseudorandom data through multiple passes, using the BLAKE2b hash function for compression and the sponge construction for state management. The most common variants in cryptocurrency mining are Lyra2RE (which chains Lyra2 with BLAKE, Keccak, Skein, and Groestl), Lyra2REv2 (an enhanced version adding CubeHash and Blue Midnight Wish), and Lyra2Z (which pairs Lyra2 with BLAKE for a simpler two-stage design).

The primary strength of Lyra2 and its variants lies in memory hardness — the algorithm requires a significant amount of RAM to compute efficiently, making it inherently resistant to ASIC and FPGA implementations where memory is expensive and limited. The configurable memory and time parameters allow individual cryptocurrency projects to tune the algorithm's difficulty profile to their specific decentralization goals. Lyra2REv2 in particular was designed to be power-efficient on consumer GPUs, reducing the energy consumption and heat generation associated with mining. The cryptographic security is reinforced by the use of multiple well-analyzed hash functions in the chain, providing defense in depth against potential weaknesses in any single algorithm.

Lyra2 variants have been adopted by several notable cryptocurrency projects. Vertcoin is the most prominent user, having adopted Lyra2RE and later upgrading to Lyra2REv2 as part of its commitment to ASIC-resistant, GPU-friendly mining. Monacoin, the popular Japanese cryptocurrency, also uses Lyra2REv2 for its proof-of-work consensus. Lyra2Z has been used by Zcoin (now Firo) before its transition to other algorithms. The Lyra2 family represents an important evolution in the proof-of-work design space, demonstrating that password hashing competition research could be successfully adapted for blockchain consensus mechanisms while maintaining strong resistance to mining centralization.