Hashings play a key role in securing crypto transactions. If you’re the least bit curious, you may already have noticed these famous transaction hashes or blockBlock A fundamental element of a blockchain, containing a set of transactions. hashes while browsing the Web3. Perhaps you’ve even read somewhere, without much explanation, that they are what make it possible to secure a large proportion of the various blockchains in use today.
What does it mean to hashHash A cryptographic function that converts input data into a fixed-size alphanumeric string. ?
What we call ‘hashing‘ simply defines a mathematical function or algorithm which takes as input a certain type of data (a sentence, an entire book, transaction data) and returns as output a sequence of characters of a fixed length.
The main purpose of hashing functions is to secure the transfer of data or information between two systems which, by default, have no means of guaranteeing the securitySecurity The measures and technologies used to protect blockchain networks and assets from theft, fraud, and attacks. of the exchange. There are many different hashing algorithms, and the SHA-256 hashing algorithm, for example, is particularly well known for its use in the Bitcoin blockchainBlockchain A public and immutable ledger of cryptographic transactions, organized in blocks. to ensure the total security of transactions and exchanges.
The particularity of hashing is first and foremost its principle of irreversibility: a hashing algorithm can take incoming data and convert it into a hash, but a hash cannot reveal the data used in the first place.
An example of hashing
To better understand how hashing secures exchanges, let’s look at a simple example
Let’s imagine that two individuals, Sam and Caroline, exchange a message containing crucial information that they wish to protect from modification or interception by a third party.
After receiving the message, Sam could provide Caroline with the hash, and if Caroline manages to find the same hash on the message received, this means that they have received the same message and that it has not been altered.
Or even simpler, as a security measure, hashing is used by web sites to store your password. Imagine you create an account on a website. Instead of storing your password as it is (e.g.: “123456”), the site applies a hashing function that transforms this password into a string of characters such as:
e10adc3949ba59abbe56e057f20f883e
If someone steals the database, they won’t be able to use your passwords directly. This method is essential to reduce the risks in the event of a cyber-attack, and when you wish to log in we apply the hashing function to the password supplied and compare the two hashes if they are similar – you’ve typed the right password.
What about blockchain ?
Now that we understand how hashing secures exchanges, let’s see how it is used to guarantee the security and integrity of blockchains. Irreversibility and anonymization are all well and good! But where do we actually use it when dealing with a blockchain like Bitcoin?
Creating and linking blocks
Each block of a blockchain contains a set of transactions. To ensure that these blocks are secure and immutably linked, each block includes a unique hashing calculated from the data it contains, as well as the hashing of the previous block. This chain structure ensures that if someone changes the data in a block, the hashing of that block also changes. As a result, all subsequent blocks would be affected, making any attempt at tampering quickly identifiable.
Transaction validation
Miners on the blockchain use hashing functions to validate transactions and create new blocks. During the miningMining The process of validating transactions and securing a blockchain network through computational work. process, a miner must find a special number, called a nonce, which, when combined with the block data and passed through the hashing function (such as SHA-256), produces a hashing that meets certain predefined conditions (a number of zeros at the beginning, for example).
This process is at the heart of the consensusConsensus An agreement among blockchain participants on the validity of transactions. It is a key concept, essential for ensuring that all nodes on a chain share the same information. mechanism known as Proof of WorkProof of Work A consensus mechanism where miners compete to solve complex mathematical problems to validate transactions and secure the network. (PoW). Hashing makes mining difficult and resource-intensive, protecting the network against attacks while ensuring the integrity and order of transactions.
Thanks to the irreversibility of hashing functions, once a transaction has been included in a block and validated by the network, it is virtually impossible to modify it. Any attempt to modify it would require recalculating the hashing of that block and all subsequent blocks, a task that would be almost impossible to achieve, as it would require colossal computing power beyond that of the rest of the network.
Proof of work and sha-256
Bitcoin, for example, uses the SHA-256 hashing function for mining. This function guarantees that each entry produces a hashing of fixed length, and that a small change to the entry results in a completely different hashing. This is what makes the blockchain so reliable and secure. By finding a nonce that produces a hashing that conforms to the rules of the network, miners add new blocks and receive rewards in Bitcoin.
The backbone of the blockchain security
Hashing, with its characteristics of irreversibility and uniqueness, is an essential technology that guarantees the integrity, transparency and security of blockchains. It links blocks, secures transactions and protects the network against attacks. Without hashing, the Web3 ecosystem, cryptocurrencies, and the many use cases of blockchain could not function with the reliability we know today. While the use of blockchains continues to diversify in sectors such as crypto and finance, hashing remains a central technological pillar. Understanding the mechanics of hashing will give us a better grasp of the future of digital security and decentralized exchanges.
