As discussed earlier in the Blockchain Introduction chapter, the Blockchain architecture consists of a series of blocks containing information. The data associated with each block within the chain of this technology depends on the type of Blockchain. A simple example of a Blockchain is a bitcoin block that contains information about the sender, receiver, and amount of cryptocurrency.

The Blockchain technology makes use of hashing function for the security of the Blockchain and its transaction. Security is one of the primary concerns that make blockchain technology so popular.

What Is Hashing?

One of the essential functions in the Blockchain security is the hashing function. A hash function is feed with an input string (which can be a number, any collection of alphabets, media files) of several lengths and alters it into a fixed length. This fixed-length bit will vary (as a 32-bit, 64-bit, 128-bit, or 256-bit) based on the hashing function used in the blocks. That fixed-length output is termed as the Hash. Such a hash is the cryptographic by-product of the hash algorithm.

What is Blockchain Hashing?

A Blockchain block has a hash in itself. It can accept as a unique fingerprint for each block. This helps identify a block along with all its contents, which is always unique as a fingerprint. So as the block is created, changes inside the block will cause the hash to change. Therefore, the hash plays a significant role for you to detect the changes to intersections. If your Blockchain's fingerprint changes, it does not stay the same block any longer.

So, it can be said that each block has:

  • Data
  • Hash
  • Hash of the previous block

Unique Hashing Properties and Characteristics

The hash algorithm used in Blockchain has certain unique properties. These properties are:

  1. The technology is designed so that this produces a unique output or hash for every transaction.
  2. The hashes used in the blockchain are one-way hash functions, and therefore cannot be reversed and altered.
  3. The Blockchain makes use of the cryptographic hash function's properties as its consensus mechanism. The cryptographic hash acts as a digest and a digital fingerprint for a definite quantity of data.
  4. In the Blockchain's cryptographic hash functions, the transaction is accepted as an input and sprint through a Hash algorithm and gives an output of fixed size.

The Bitcoin's Blockchain

The Blockchain of Bitcoin makes use of SHA (Secure Hash Algorithm)-256, which was developed by the National Security Agency (NSA) of the USA. In case you take the example of Blockchain implemented in cryptocurrencies, transactions done in that chain vary in lengths and go through a specified hashing algorithm where the output provided by all are of a fixed length. The output, in this case, is called the hash. A typical example used in the popular cryptocurrency is Bitcoin's Secure Hashing Algorithm 256 (SHA-256).

Blockchains and Hashing - Where Is It Used?

Hashing can be useful and implemented in Blockchain, as discussed above. Here are some more examples of it.

  • Addresses used on any Blockchain are derived from hashing.
  • Hashing also leads to defining a cryptographic signature that helps in determining the valid transactions.
  • Any transaction's hash can make it easy to keep a trail of every transaction on the Blockchain. Rather than looking for a specific transaction ID and tracing it as a linear search, it is better to have a copy of the hash into a Blockchain where everyone can witness the transaction details.
  • Hashing functions are vital in crypto mining, where a valid activity is discovered by calculating several hashes—this aids in forming a consensus on the Blockchain.
  • The application of "hash of data" aid in storing huge amounts of data on the Blockchain.
  • Hash rate is used to determine how fast or smooth the mining process will run. It becomes essential to determine the intricacy levels throughout the mining.