Cryptocabulary of the Week - Hash
I don't know about you, but one of my breakfast favorites is a side of hash browns. Crunchy fried potatoes alongside two fried eggs, a couple of slices of bacon, and butter toast...YUM! That's a breakfast to me. Always has, and always will. For others, I suppose breakfast is a completely different experience. Maybe you take your breakfast potatoes differently...
But whatever...Hash browns, leave it or take it. To each their own!
But when it comes to cryptocurrency, you ain't going nowhere or doin' nothin' without hash! Hash is the backbone of blockchain security. It many not give you the warm feelings of home cookin' or make you want to go fly a kite (see: hash brownies), but it should give you a good night's sleep knowing that your crypto assets are safe and secure. In the world of cryptocurrency, it's everything. It provides transparency, security and anonymity at the same time.
What is Hash?
So what is a hash, exactly? Well, here's an example: 0xfd519d3868810057db71717b01fa4ade8ce38df3318851fd64a6a486e361692e
Hash is the digital alpha-numeric output created when data of arbitrary size is inputed into hash function or algorithm. It is the encrypted, fixed-length, character string form of the data of a transaction. It really is an amazing technology because it is one of the most secure data transfer practices. In the process of creating a hash, none of the original data can be access without the a hash key.
Created around 1950 by Hans Peter Luhn, the hash and hash alogrithm is the building block of all advanced computing. Hans figure out a way to create a machine that could sort through text and numbers and spit out a set string of characters and numbers, regardless of the input size and quantity. This process is called a hash function.
One of the simplest ways to demonstrate how a hash function works is to take any number and add all of the digits together, and keep adding the numbers of each subsequent result, until a single digit result remains. Take 56,723 for example:
5 + 6 + 7 + 2 + 3 = 23
2 + 3 = 5
5 would be the hash of 56,723. But this isn't a very good algorithm.
"...in order to perform its functions well, a hash function needs to possess several characteristics:
- It should be easy to compute an output for any given input, but nearly impossible to reverse the process and calculate the input of a known output;
- Determinism — feeding a specific input into the algorithm should always produce the same output;
- Collision resistance — two different inputs should be very unlikely to produce the same output;
- Avalanche effect — changing even a single bit of data in the input should result in a wildly different output."
Because of the randomness of hashes it's impossible to predict the output of any input.
"In fact, it is nearly impossible to reveal the initial data from a hash value itself. Moreover, a brute force attack is extremely unlikely to succeed thanks to the astronomical number of potential combinations. In addition, it’s also severely unlikely that two data values (known as collision) have the same hash." https://coinmarketcap.com/alexandria/glossary/sha-256
This prevents anyone just created a crypto coin of thin air, and making it near impossible for someone to hack into the blockchain.
Each blockchain uses a different algorithm to create encrypted hashes. For example, Bitcoin uses the SHA-256 hash function for creating new blocks on the blockchain. This hash function will always produce 256 bit long outputs regardless of the input size. You can see all sorts of hash examples being used in daily transactions on the various blockchain explorers on the web, like Bitcoin Block Explorer, Etherscan, or Binance Smart Chain Explorer, to name a few.
You may not understand the complexity of the math and science behind cryptocurrency, but you don't have to be a mathematician or a rocket scientist to appreciate the value of a good hash!
Until next time...go eat a good breakfast, and live today above the sun!
The Pied Piper
Questions? Need help? Email ATSTT Support.
Like what you're reading? Want more? Become an ATS Trading Tables member and get access to exclusive access to membership content and online discord community.