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What is the SHA-256 Algorithm In Bitcoin? | Understanding the Basics

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cryptomarketupdate
What is the SHA-256 Algorithm In Bitcoin? | Understanding the Basics

With Bitcoin reaching mainstream adoption, its core security mechanism is being analyzed frequently. Proof-of-work is often described as a "cryptographic puzzle," but what exactly is that challenge? There is a complex set of algorithms associated with it.  

Cryptography, the underlying technology of blockchain and cryptocurrencies, was developed long before it became popular. It is the study of encrypting and decrypting information. Cryptocurrencies such as Bitcoin use cryptographic hash functions like SHA-256 to validate transactions on the network. 

In this article, we will look at how SHA-256 works and why it was implemented in the Bitcoin network. 

What is SHA-256 Cryptographic Hash Algorithm?

SHA-256, or Secure Hash Technique 256, is a hashing algorithm that converts variable length input into a 256-bit fixed-size hash (32 bytes). These cryptographic hashes work in the same way as data fingerprints do. For any text of any length, there is a unique hash generated by this algorithm. 

SHA256 Hash

 

The National Security Agency (NSA) of the United States designed SHA-256 in 2001. SHA-256 is a part of the NSA-designed SHA-2 family of cryptographic hash algorithms. 

Cryptographic hash functions are mathematical operations performed on digital data; the integrity of the data can be determined by comparing the calculated "hash" (the output of the algorithm's execution) to a known and anticipated hash value. Any piece of data may be used to make a one-way hash, but the hash cannot be used to generate data. This algorithm is commonly used in website SSL certificates (encrypted communication between web browsers and web servers) and the DKIM message signing standard for email clients.



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