Hashing is the creation of a sequence of hashes using a mathematical function. This sequence is characterized by a high level of security and allows you to send messages safely.
This is a certain kind of hash that is secure and ideal for cryptography. The hash features have the following features:
Determination - A fixed volume of hashes must be produced at a given input value each time.
Computational efficiency - The computing power should be sufficient to quickly return hashes. Most computers can process the hash function in a split second.
Resistance to finding the prototype - The hash function should not give any information about giving any information about the input value.
Collision Resistance - Getting two inputs that could give two outputs. It must be very complicated or impossible. Since the length of the input value can be any, its variations are infinite. For outputs, the length is fixed and, accordingly, the number of variants is limited in this case. However, multiple inputs can produce the same output. If collision resistance is not high enough, the so-called "birthday" attacks can occur. It is an attack in which mathematics prevails over probability theory. You may have heard of such cases. The simplest example of an illustration of such attacks is that if there are 27 people in the room, there is a 50% chance that these two will have the same birthday.
Why is this happening? For one person, the probability is 1/365, based on the number of days per year. The second person has the same probability. To determine the likelihood 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 we take root from this number, it turns out that 23 randomly selected people have a 50% chance of coincidence.
Applying this theory to hashing, it becomes clear that from a technical point of view, no hash function is completely collision-resistant, but it can take a long time before it happens.
Bitcoin is blockchain-based and uses the SHA-256 hashing algorithm (256 cryptographic hashing algorithm). In the case of bitcoin, hash functions perform three main tasks:
Mining - Miners compete for problem-solving. Each miner takes information from blocks they already know about and builds a new block from them. If the algorithm outputs a value less than the target number, it is considered valid and can be accepted by the rest of the network. Thus, the miner gets the right to create the next block.
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The connection of the blocks is for added security. Each block in the blockchain is linked to the previous one, which is achieved through a hash pointer (variables that store the address of another variable). In fact, each block contains a hash result from the previous block in the blockchain. With this feature, you can easily track the history of the blockchain and eliminate the possibility of adding a malicious block to the network.
Creating keys - Private and public keys are required to send or receive cryptocurrency. Both keys are linked to each other via a hash function. It is an integral component that eliminates the receipt of your private key by third parties.
The hash function provides a high level of security for cryptocurrency. And while nothing is protected from theft in theory, this feature gives you the highest levels of complexity available to date.