## What is a hash?

A hash is a function that converts an input of letters and numbers to an encrypted output of a fixed length. A hash is created using an algorithm and is essential for managing the blockchain in cryptocurrency.

Key points to remember

- A hash is a function that responds to the encrypted requests necessary to solve a blockchain calculation.
- A hash, like a nonce or a solution, is the backbone of the blockchain network.
- The hashes are of a fixed length because it is almost impossible to guess the length of the hash if someone tried to break the blockchain.
- A hash is developed based on the information in the block header.

## How a hash works

The backbone of a cryptocurrency is the blockchain, which is a global ledger formed by linking together individual blocks of transaction data. The blockchain only contains validated transactions, which prevents fraudulent transactions and double spending of money. The resulting encrypted value is a series of numbers and letters that do not look like the original data and are called a hash. Cryptocurrency mining involves working with this hash.

Hashing requires processing the data in a block via a mathematical function, which results in output of a fixed length. Using a fixed length output increases security, as anyone trying to decrypt the hash will not be able to determine the length or length of the input simply by looking at the length of the output.

Solving the hash essentially solves a complex mathematical problem and starts with the data available in the block header. Each block header contains a version number, a time stamp, the hash used in the previous block, the hash of the Merkle root, the nonce, and the target hash.

The minor focuses on the nonce, a string of numbers. This number is added to the hashed content of the previous block, which is then hashed. If this new hash is less than or equal to the target hash, then it is accepted as a solution, the miner receives the reward and the block is added to the blockchain.

The blockchain transaction validation process is based on data encryption using algorithmic hashing.

Hash resolution requires the miner to determine which string to use as a nonce, which itself requires a significant amount of trial and error. Indeed, the nonce is a random chain. It is highly unlikely that a minor will successfully reach the correct nonce on the first try, which means that the minor can potentially test a large number of nonce options before getting it right. The greater the difficulty – a measure of the difficulty of creating a hash that meets the requirement of the target hash – the more time it will likely take to generate a solution.

## An example of hash

Hashing the word “hello” will produce output the same length as the hash for “I’m going to the store.” The function used to generate the hash is deterministic, which means that it will produce the same result each time the same input is used. It can generate a chopped entry efficiently, it makes determining the entry difficult (leading to extraction) and makes small changes to the entry result in an unrecognizable and entirely different hash.

Processing the hash functions necessary to encrypt new blocks requires significant computing power, which can be costly. To encourage individuals and businesses, called miners, to invest in the required technology, cryptocurrency networks reward them with both new cryptocurrency tokens and transaction fees. Minors are only compensated if they are the first to create a hash that meets the requirements defined in the target hash.