Hash (hash value)

The key properties

• Always the same: the same data always produces the same hash.
• Fixed length: one letter or a whole book – the hash is the same length.
• Unpredictable: change a single character and you get a completely different value.
• One-way street: it is practically impossible to find data that matches a given hash, or two inputs with the same hash.^[1]

Example with SHA-256 (own calculation, shortened): ‘Bitcoin’ gives b4056df6…4eb63aa4, while ‘bitcoin’ with a lower-case b gives 6b88c087…05ca107b.

The one-way street only protects unpredictable data: if a hash hides a well-known word, anyone can find it by trial and error. That’s why even words or sentences you make up yourself are no good as a secret key.

What Bitcoin uses hashes for

• Chaining: every block header contains the hash of the previous block. Change an old block and its hash changes – the next block no longer fits.^[2] This is what makes the blockchainGlossaryBlockchainBitcoin’s public ledger: a chain of blocks in which each block refers to its predecessor. Anyone wanting to change an old entry would have to recreate all the blocks that follow it.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →×.
• Mining: in proof of workGlossaryProof of workThe method by which miners prove that they have done real computing work for a new block. It lets the network agree on the valid chain without a central authority, and makes rewriting old blocks extremely expensive.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →×, miners search for a block header whose hash does not exceed a target value.^[2]
• Identifiers: every transaction has a transaction ID (TXID) – its hash, which lets you find it in a block explorer.
• Addresses: many address formats are derived from the public key using a hash.

Bitcoin mainly uses SHA-256GlossarySHA-256A standardised cryptographic hash function that calculates a 256-bit fingerprint from any data. Bitcoin uses it for mining and identifiers – and even hashes the block header twice in a row.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →×.