Hash
A hash is a digital fingerprint of data, produced by a hash function. The same input always gives the same hash, but even a tiny change to the data produces a completely different one.
How a hash function works
A hash function takes input of any size, a word, a file or a whole block of transactions, and produces an output of fixed length. Bitcoin's SHA-256, for instance, always outputs 256 bits, usually written as 64 hexadecimal characters.
Cryptographic hash functions have three key properties. They are deterministic: the same input always yields the same output. They are one-way: you cannot reconstruct the input from the hash. And they are collision-resistant: it is practically impossible to find two different inputs with the same hash. Changing a single character, say a comma, yields a hash that looks entirely unrelated, which is called the avalanche effect.
Where blockchains use hashes
Each block stores the hash of the previous block, which links the chain and makes any change to past data obvious. Transactions are identified by their hash, often called the transaction ID. In proof-of-work mining, miners repeatedly hash a block header until the result falls below a target. Addresses are also derived from public keys using hash functions.
An example
Hash the text hello and you get a particular 64-character string. Hash Hello with a capital H and you get a completely different string, with no visible similarity. Anyone can recompute both hashes and check them, but nobody can work backwards from the string to the word, other than by guessing inputs.
Limits and misconceptions
A hash is not encryption: there is no key and no way to decrypt it. Hashing a short or predictable input, such as a simple password, does not hide it well, because attackers can hash common guesses and compare. And while SHA-256 has no known practical weaknesses, older functions such as MD5 and SHA-1 have been broken for collision resistance and should not be used for security.
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Frequently asked questions
What hash function does Bitcoin use?
SHA-256, applied twice for block headers and transaction IDs, and RIPEMD-160 combined with SHA-256 for some address types. Ethereum uses Keccak-256.
Can two different inputs have the same hash?
In theory yes, because inputs are unlimited and outputs are fixed. For SHA-256, finding such a collision is considered practically impossible with current technology.
What is a transaction hash?
The unique identifier of a transaction, calculated by hashing its data. You can paste it into a block explorer to look up the transaction.
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