What is a Hash Function, and How do They Relate to Cryptocurrency?


Cryptography has an increasingly important role in blockchain networks. One of these is the ability to calculate unique and real data. This system call Hash. You may be familiar with Hash and the unique codes found on Blockchain.

Digitalization of the financial sector will be possible in the future, thanks to cryptocurrencies like Bitcoin. Bitcoin, unlike fiat currency, distributes by the central banks. However, Bitcoin is usually circulating through blocks that reward miners for breaking a block. Miners use special hardware and software to solve complicated computational problems to generate 64-character output that looks random.

This output knows as a hash. What are hashes? The term is basically a mathematical function or process that combines data of different sizes into a series. When dealing with large transaction volumes, the size of some data can be critical and fixed. What must learn is not only that there are many other things that interconnect with each other, one of which is bitcoin mining.

How about hash functions?

A hash is an algorithm that replaces information in cryptography. Without changing the data size, you enter data that will convert into numbers, letters, or other characters using a hash role. The hash role cannot use to return data encrypted. This is what also makes the algorithm known as One-way Function or one-way encryption.

The hash function works according to your specific needs. The problem is an algorithm that is apply to the information can change depending on the direction. To ensure that the hash function works correctly, however, there are several requirements.

The algorithm used in a hash function must contain two similar keys to ensure that the hashing results do not differ, are low-level of complexity, and reduce the chance of collisions.

How do hash functions work?

Before you can understand how hash functions work, it is important to distinguish between encryption and encoding. Encryption is a process of protecting information by making it invisible to others without any special assistance. The next step is decryption or description, whose purpose is to read encrypted messages.

Encoding is another term for converting information to sent to the recipient using the data processing mechanism. Thus, encoding also knows as decoding. It is the process of translating data from the source into information that the recipient can understand.

Why is hashing so important?

Because of its complex and sensitive implementation, the hash function uses in many sectors. Therefore, some people may have difficulty understanding the algorithm or mathematical process for the first time. However, it is possible to learn the roles of hash functions by understanding them. The following are the main reasons why the hash process is important:

1. Normalize data of different lengths

In the beginning, I want to create an account in the market or application. It recommends that you create a password with a minimum of words. The password will save on the server to make it easier for laptops or computers to authenticate. To uniformize the length of the password field in the database, the characters will now store in a hash value with a fixed length. The hash role displays passwords processed in (*).

2. Data integrity

As mentioned above, hash functions can be very sensitive. Any slightest modification will cause the compiled code to change. This trait, however, makes it less likely that a similar hash will generate. This is why hashing is used for data that is confidential. For example, passwords that are used in ATMs and other mechanisms that contain individual data. Hackers are less likely to penetrate systems that have complex schemes created using the hash function.

3. Sending faster

The hash function in this problem can show you an example of how to verify the archived copy against the original. If the copies of the documents are located far from the original archive database, the shipping process can be difficult; instead of sending the entire document to a central server, which can take a while, use a proper hash function and send a message digest to the archive. Then, you can ensure that the message digest in the copy matches the message digestion of the original archive.

What are the different types of crypto-world hash functions?

1. SHA256

The first Hash that can be used on a public Blockchain network and is valid for use is SHA256. Bitcoin uses this Hash to process transactions and calculate the Hash value. NIST (National Institute of Standards and Technology) initiated this user in 2001.

SHA256 is the 2nd generation Sha type hash. The number 256 refers to the 256-bit database. Because it can send small, fast transactions, SHA26 is often used by other blockchain mechanisms. However, it can also process large transactions.

2. MD5

MD5 is often used with a 128-bit hash value. It is also used in several security applications (RFC 1321). MD is an abbreviation for message digest. How does MD5 function as a hash function? Sometimes, the process of retrieving files or documents can be interrupted by unstable internet access or the device turning off abruptly. These conditions can cause the file to be unavailable because it has been corrupted or deleted. If you apply MD5 correctly, MD5 may be able to save you from this risk.

3. RIPEMD160

Hash RIPEMD160 is an acronym for Race Integrity Primitive Assessment Message Digest. MD4 was the one who came up with the idea for the hash algorithm. MD4 developed the idea of the hash algorithm. It creates less transaction data than SHA256 (which is only 160 bits).

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