Blockchain - Hashing

A hash function transforms data of any size into data of a fixed size. Bitcoin uses SHA-256 hash function that produces a hash (output) of size 256 bits (32 bytes).

When Bob places an order with Lisa, he creates a message similar to the one shown above. A 32-byte hash is generated by hashing the message through a hash function. The beauty of this hash is that it is considered unique for all practical purposes for the message contents. If the message is modified, the hash value will change. Moreover, given a hash value, it cannot be reconstructed.

Having seen the importance of hashing, let's move on to another concept in Bitcoin: mining.

Frequently Asked Questions