Cryptographic Hash Function

What Is a Cryptographic Hash Function?

A cryptographic hash function is an algorithm with a repeatable sequence of specific actions. This sequence is used to transform a variable-length arbitrary data string into a fixed-length format called a hash.

For a hash function to perform properly, it needs certain qualities, such as:

  • Avalanche effect — If an individual were to change a single bit of data in the input, it would massively affect the output.
  • Determinism — By entering a specific input in the algorithm, it will always produce the same output.
  • Collision resistance — When using the algorithm, if there are two different inputs, there should rarely, if ever, be the same output.
  • For a hash, it should be easy to compute the output of any input given. However, it should be the exact opposite for the reverse: it should be incredibly difficult to calculate the input from output.

What Are Cryptographic Hashes Used For?

One of the most common and important use cases for a cryptographic hash is with the cryptocurrency Bitcoin (BTC). A cryptographic hash is an important function in the Proof of Work (PoW) system of Bitcoin. For new blocks to be added to the Bitcoin blockchain, miners need to provide a hash value below a certain threshold. The hash used is known as SHA-256.

Why Are Cryptographic Hashes Important?

Cryptographic hashes are pseudorandom, meaning that deciphering the output of any input before putting it through a hash function is basically impossible. This ensures that miners cannot be malicious and try to produce BTC out of nowhere instead of contributing to the network.

Key Takeaway

A cryptographic hash function is an equation that verifies the validity of data.

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