Note We are still in the process of finalising the software infrastructure for mining, so this information is provided on a best-effort basis. Expect to finalisation to happen imminently.
Our algorithm, Dashimoto (Dagger-Hashimoto), is based around the provision of a large, transient, randomly generated dataset which forms a DAG (the Dagger-part), and attempting to solve a particular constraint on it, partly determined through a block's header-hash.
It is designed to hash a fast verifiability time within a slow CPU-only environment, yet provide vast speed-ups for mining when provided with a large amount of memory with high-bandwidth. The large memory requirements mean that large-scale miners get comparatively little super-linear benefit. The high bandwidth requirement means that a speed-up from piling on many super-fast processing units sharing the same memory gives little benefit over a single unit.
TODO: Content from formal requirements doc.
TODO: Content from design decisions doc.
Mining will be accomplished in one of two ways: either on CPU (and possibly the GPU, to be confirmed) with the Mist client or on the GPU though a combination of the Ethereum daemon and sgminer.
An sgminer module for Dashimoto is expected to be released by the 1st of March.
Communication between the external mining application and the Ethereum daemon for work provision and submission happens through the JSON-RPC API. Two RPC functions are provided; eth_getWork and eth_submitWork.
These are formally documented on the JSON-RPC API wiki article.