What is "Hashing" and How Does it Work?

What is "Hash" and why is it important?

Bitcoin mining is based on cryptographic functions known as "hashing," which ensures both the security and decentralization of the Bitcoin network. But what exactly is a "hash" and how does it contribute to the mining process? This article will break down the concept of hashing in easy-to-understand terms, starting with the basic principles of how a cryptographic hash works.

What Hashing Algorithm does Bitcoin use?

We’ll explain that in Bitcoin's case, the SHA-256 hashing algorithm is used, and how it works to turn input data into a fixed-length output of 256 zeros and ones. The fixed-length property of the hash, along with its deterministic yet random nature, ensures the integrity and security of transactions.

What is a Block header?

Block Headers, which contain information such as the previous block’s hash and a list of transactions are hashed in Bitcoin mining. Miners use hashing to continuously search for a valid hash that meets the network’s difficulty target. A nonce is used, (a random number used to change input data), how miners perform trillions of hash attempts per second, and why this is necessary to secure the network.

Miners contribute to the Bitcoin ecosystem by verifying transactions and securing the blockchain through their work. Readers will understand why harshing is the key to Bitcoin's decentralized nature and security, as well as how miners are incentivized to keep the network running.