Hashing

Hashing is the process of transforming input data (such as text, a file, or a message) into a fixed-size value (hash), which is a string of characters. This process is carried out using a special mathematical algorithm called a hash function.

Key characteristics of hashing:

1. Fixed output length: Regardless of the size of the input data, the hash always has a fixed length. For example, the SHA-256 hash algorithm always produces a 256-bit value.
2. Deterministic: For the same input value, the hash function always returns the same hash value.
3. One-way: Hashing is an irreversible process — it is impossible to recover the original data from the hash.
4. Sensitivity to changes: Even a small change in the input data (e.g., changing a single letter) results in a completely different hash value.

Applications of hashing in cryptocurrencies:

1. Security: In blockchains like Bitcoin or Ethereum, hashing is used to ensure the security of transactions and data.
2. Digital signatures: Hashes are used to create digital signatures that confirm the authenticity of transactions.
3. Mining process: Cryptocurrency mining involves solving the problem of finding a hash that meets certain conditions. This process requires significant computational resources.

Examples of hash functions:

• SHA-256: One of the most popular algorithms used in Bitcoin for creating block hashes.
• MD5: Previously a popular hash function but now considered outdated and insecure for cryptographic purposes.
• SHA-3: A modern hash algorithm that is considered more secure than SHA-256.

Examples of hashing usage:

1. Data integrity: Hashing is used to check the integrity of files or messages. If the data is altered, the hash value will change, indicating a breach of integrity.
2. Passwords: Instead of storing passwords in plain text, their hashes are stored. When trying to authenticate, the entered password is hashed and compared with the stored hash.
3. Transaction signatures in blockchain: In blockchains, each message or transaction is hashed to ensure the security and immutability of the data.

Example:

Let’s say we want to hash the string “cryptol.info” using SHA-256. The result of the hashing would be a string like this:

SHA-256(“cryptol.info”) = d97e8b1a80330f7c8de6f7af7f0104b96f9b5f96174a6ec9a4db9dc9d4f96473

In this example, you can see that even a small change in the input data (e.g., adding or removing a character) results in a completely new hash.