Hashing is the creation of a sequence of characters that use a mathematical function. This sequence is highly secure and allows you to send messages safely. The process is also used in cryptography.
Cryptographic hash functions
A cryptographic hash is a specific kind of hash that is secure and ideal for cryptography. Hash functions have the following features:
- Determinism. With a certain input value, a fixed amount of hashes must be produced each time.
- Computational efficiency. The computing power must be sufficient to return the hashes quickly. Almost all computers can process a hash function in a split second.
- Resistance to finding a preimage. The hash function should not provide any information about the input value.
- Resistant to collisions. Getting two inputs that could give two outputs. Must be very difficult or impossible. Because the input value can be any length, its variations are endless.
Outlets have a fixed length, and in this case, the number of options is limited. However, multiple inputs can produce the same output.
If the collision resistance is not high enough, so-called birthday attacks can occur. It is an attack in which mathematics prevails over probability theory. You may have already heard of such cases. The simplest illustration of such attacks is that if there are 27 people in a room, there is a 50% chance that two people present have the same birthday.
Why is this happening? For one person, the probability of guessing a birthday is 1/365, based on the number of days in a year. The second person has the same probability. To determine the probability of the coincidence of their birthdays, you need to multiply one indicator by another.
So, it turns out that there are 365 birthdays and 365 coincidence probabilities, and if you take the root of this number, it turns out that 23 randomly selected people have a 50% chance of coinciding birthdays.
If you apply this theory to hashing, it becomes clear that technically no hash function is completely collision-resistant, but it can take a very long time before that happens.
What is blockchain hashing?
Bitcoin works with the blockchain and uses the SHA-256 hashing algorithm (256 cryptographic hashing algorithms). With its help, any amount of information can be converted into a string of 64 characters.
In the case of Bitcoin, hash functions have three major tasks:
- Mining. Miners compete to solve problems. Each miner takes information from blocks that he/she already knows about and builds a new block from them. If the algorithm outputs a value less than the target digit, it is considered valid and can be accepted by the rest of the network participants. So, the miner gets the right to create the next block.
- Connecting blocks – for added security. Each block in the blockchain is linked to the previous one, which is achieved by using a hash pointer. Thus, each block contains the hash result from the previous one in the blockchain. Due to this feature, you can easily track the history in the blockchain and eliminate the possibility of adding a malicious block to the network.
- Key Generation. Public and private keys are required to send or receive cryptocurrency. Both keys are linked to each other through a hash function. It is an integral component that prevents third parties from obtaining your private key.
Why does it matter?
Common hash functions have a wide range of use cases, including database search, large file parsing, and data management. In turn, cryptographic hash functions are widely used in information security applications for message authentication and digital fingerprinting. When it comes to Bitcoin, cryptographic hash functions are integral to the mining process and play a major role in generating new keys and addresses.
Hashing demonstrates its full potential when dealing with a huge amount of information. For example, you can run a large file or dataset through a hash function and then use the output to quickly check the accuracy and integrity of the data. It is possible due to the deterministic nature of hash functions: the input will always result in a simplified compressed output (hash). This method eliminates the need to store and remember large amounts of data.
Hashing is particularly useful concerning blockchain technology. There are several operations performed in the bitcoin blockchain, which include hashing, most of which is mining. Virtually all cryptocurrency protocols rely on hashing to bind and compress groups of transactions into blocks, as well as to create cryptographic relationships and efficiently build a blockchain.
Conclusion
There is no doubt that hash functions are one of the main tools in computer science, especially when dealing with huge amounts of data. Combined with cryptography, hashing algorithms can be very versatile, offering security and a variety of authentication methods. Thus, cryptographic hash functions are vital for almost all cryptocurrency networks, so understanding their properties and how they work is useful for anyone interested in blockchain technology.
