Hashing - what is it and what is it for?

Hashing is a mathematical algorithm that converts input data of varying sizes into a single string of characters of a certain size, that is, a hash. Each result obtained is unique. Any changes in the input data lead to a change in the final result, that is, to a new hash.

Hashing is a one-way order function and is irreversible. Accordingly, it is impossible to obtain initial data with a ready-made result. In cryptocurrency, this function is used in blockchains to ensure the system's stability as a whole, maintain its level of security, maintain the integrity of all data, and confirm the authenticity of transactions.

How does Hashing work?

The entire hashing process is a clear sequence of specific actions:

  • the source data is processed using a special algorithm, which creates a hash of a fixed length;
  • the result is stored in the blockchain as a unique identifier.

Depending on its purpose, Hashing is used for different purposes:

  • transactions - any transaction in the blockchain that is a technically unique hash that indicates its authenticity;
  • blocks - hashing is used to identify each new block, and each new block that is presented in the chain necessarily contains the hash data of the previous block.

In mining, the headers of each new unique block are hashed.

Modern Hashing Algorithms

There are quite a lot of protocols for converting data into a hash; the most popular ones are listed below:

  • SHA-256 is the most popular algorithm, which stands out for its high speed and security;
  • Scrypt - the system of such cryptocurrencies as Dogecoin and Litecoin is based on it; the main differences are - that it consumes more memory, due to which it is less susceptible to ASIC-based attacks;
  • Ethash is a unique algorithm that is used in the blockchains of the Ethereum ecosystem, shows high resistance to attacks via ASICs, consumes a lot of memory and computing power;
  • Blake2b is one of the fastest hashing protocols, with a hash length of 512 bits, used in the Grin and Beam cryptocurrency systems, ensuring data security and confidentiality;
  • SHA-3 is an improved version of SHA-2 that provides better security results due to its length of 512 bits.

The most popular hashing methods used today are Proof of Work (PoW), Proof of Stake (PoS), and Proof of Authority (PoA).

Hashing - advantages of technology

This function is decisive for the operation of the blockchain in the format envisioned by the creators of the ecosystem. The main benefits that hashing provides are as follows:

  • increased security, which is manifested by the effectiveness of resistance to various types of attacks;
  • excellent protection against unauthorized access to data;
  • simplifying the processes of information verification and data authentication;
  • irreversible processes, which ensures correct data storage in the long term; that is, hashing eliminates the possibility of changing the original data.

Hashing is one of the blockchain's most important elements, allowing you to create unique identifiers. Thanks to this function, it maintains the stability of the ecosystem and its development.