Hashing has always been a central element of cryptocurrencies like bitcoin. With hashing algorithms making it possible to record an unchangeable ledger of transactions without compromising user privacy, bitcoin relies heavily on this idea to operate. Of course, though, this begs the question of what precisely a hash function is and how it is calculated. This article will be answering these questions and more.
In simple terms, a hash function is an algorithm that can turn a string of any length into a hash that is always the same length. This process is considered irreversible, making it ideal for transactions that need to be public without compromising the privacy of those involved. This process is central to crypto mining, with computers working hard to find hashes that meet specific requirements.
While not every cryptocurrency is the same, Bitcoin is widely regarded as the standard for hashing. The Bitcoin blockchain uses the SHA-256 hashing algorithm to calculate hashes. When a computer puts a string through this algorithm, the algorithm will turn it into a long hex code unique to the string. If the same string is re-hashed, the result should always be the same. This means that hashing is deterministic because the outcome for any given string is dictated before it is ever hashed.
It can take a lot of processing power to turn a string into a hash, and this is one of the things that has made Bitcoin so valuable over time. Alongside this, though, hashes for strings have to be entirely unique. Consequently, there is a limit on the number of bitcoins that can ever be mined, which sits at 21 million.
The crypto mining process involves using a computer to calculate huge ranges of hashes while looking for specific results. For bitcoin, hashes that start with a 0 are able to generate new bitcoins, though this has become harder and harder over time. Thanks to the fact that hashes have to be unique, there are only so many hashes that start with 0. Those that begin with one, two, or three 0s have all been mined a long time ago, with modern hashes requiring a minimum of 18 0s at the start to generate a bitcoin. This is why it has become so much harder to mine these valuable coins; you need a lot more processing power to find a hash with this many zeros.
Hashing is essential to the world of cryptocurrencies, and this isn’t likely to change anytime soon. Websites like Unblocktalent can help you to build a better understanding of bitcoin, hashing, and a range of other cryptocurrency and blockchain topics, making them extremely valuable when you want to invest in this market.
"I really, really like the article. It's very clear and well written."
