Understanding Cryptographic Hash Functions
A cryptographic hash function is an algorithm that performs a series of specific actions to transform a data string of any length into a fixed length and format called the hash.
One example of a simple hash function involves adding up the digits in a number until a single-digit output is obtained. For example, if the input is 49, adding 4 and 9 gives 13. The digits 1 and 3 are then added together, resulting in an output of 4. Regardless of the length of the input number, the output will always be a single digit.
However, this algorithm is not considered to be good because a hash function needs to have specific characteristics in order to effectively perform its functions:
- The ability to easily compute an output for any given input, while making it nearly impossible to reverse the process and calculate the input based on a known output.
- Determinism, meaning that feeding a specific input into the algorithm will always produce the same output.
- Collision resistance, ensuring that it is highly unlikely for two different inputs to produce the same output.
- Avalanche effect, where even a slight change in the input data should result in a significantly different output.
Hash functions are used in various applications, such as checksums to verify the integrity of computer files during transmission or storage, as well as in randomizing functions.
They also play a crucial role in the mining of proof-of-work cryptocurrencies like Bitcoin (BTC), which utilizes the SHA-256 hash function. Miners who want to add a new block to the blockchain and claim their mining reward must first generate a hash value that is below a specific threshold known as the target.
The pseudorandom nature of hashes and the impossibility of predicting an output before running it through the hash function ensure that miners cannot create new Bitcoins out of thin air. They must provide proof of the work they have done.