Cryptographic Hash Function

Cryptographic Hash Function

In the world of cryptocurrency, the Cryptographic Hash Function plays an integral role. Stripped down to its essentials, a Cryptographic Hash Function is a special type of function used for security purposes. It takes an input (or 'message') and returns a fixed-size string of bytes which appears to be random and dependent on the input only.

Cryptographic Hash Properties

The outcome of a Cryptographic Hash Function, known as a hash, possess three important properties:

  • Deterministic: For a given input the output (hash) will always be the same. So, if you input a certain piece of data, the hash function will always give out the same hash result.
  • Fast computation: The hash function is capable of producing the hash value quickly and efficiently. This lends to the speediness of transactions in cryptocurrencies.
  • Pre-Image Resistance: It's virtually infeasible to generate the original input value from its output hash. This adds to the secureness of the transaction in the cryptocurrency universe.

Role in Cryptocurrency

Within the context of cryptocurrencies, like Bitcoin, the Cryptographic Hash Function has a few crucial jobs:

  • Transaction Verification: The Hash Function is used in the processing and verification of transactions. It helps in maintaining the integrity and security of cryptocurrency transactions.
  • Creating new blocks: Whenever a new block is added to the blockchain (the ledger that records all the transactions), that block is processed through a hash function to generate a hash that will represent that block.
  • Forming Blockchains: Part of the input for the hash of a new block is the hash of the previous block. This arrangement creates a chain of blocks, or the 'blockchain', where altering any block's data would mean changing all following blocks and redoing all the work of the block addition, making the blockchain resistant to alteration.

Common Cryptographic Hash Functions in Cryptocurrency

Two most commonly used Cryptographic Hash Functions in cryptocurrency include:

  1. SHA-256: Secure Hash Algorithm 256-bit is commonly used in Bitcoin. It generates a unique hash value that verifies and protects the integrity of information.
  2. Scrypt: Used by cryptocurrencies such as Litecoin, it tends to be more memory-intensive than SHA-256, offering some different trade-offs in terms of security and performance.

So, the Cryptographic Hash Function is like the backbone of cryptocurrency. It works behind the scenes as the guard of cryptocurrency, upholding its secure, anonymous, transparent, and unalterable nature.