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Hashing – Hash Function

02 Funcion Hash

What is Hash e and what role does it play in the Cryptocurrency ecosystem?

As we all know, Cryptocurrencies are founded and secured by a mathematical process called computational Cryptography; Thanks to this, information can be stored in the safest way without worrying that someone can make any changes or distort said information.

When we talk about the hash function within a computational process, we refer to the name of the Cryptographic function that is used for some computer process, which is of vital importance and very relevant in security and information protection processes.

These Cryptographic functions have a basic objective in all computer systems, this objective is to be able to encode the data of a system allowing the creation of a unique sequence of characters regardless of the amount of information that is being entered or encrypted.

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Thanks to these Cryptographic functions, today we can safeguard and ensure the veracity and authenticity of the data, we can also safely enter passwords and sign documents in digital rooms.

Cryptography and Hash functions are widely used within the security system of Blockchain platforms and networks; The first Cryptocurrency to use this Hash encryption methodology was Bitcoin, which was developed by Satoshi Nakamoto.


What are the existing types of Hash 

The work carried out by the different hash functions is practically the same in any Blockchain, since they help to protect the data and prevent its reproduction. But not all these functions are the same and there is no exclusive function to protect Blockchains through encryption, since there are different types of hash algorithms that can be used depending on the case and the design of the Blockchain.

We can find various encryption standards throughout history, but the most significant are MD5, RIPEMD, and the SHA standard. Each one was very safe in its time of use and some are more secure and complex than others as we will see below.

  • Hash MD5: It was one of the first Hash functions created, was developed by the Cryptographer Ronald Rivest in 1989, the hash MD5 function was born as a substantial improvement of the old encryption algorithm called MD2. It has the particularity of having a high degree of security and a very remarkable level of optimization, allowing its incorporation into different systems; Despite the fact that for its time it was widely used and with an admirable performance, by current standards it is a bit outdated, which is why it is still used but in areas where security is not a factor of extreme priority.
  • Hash RIPEMD: It was developed in 1992 in a European project for computer security called RIPE, which would seek to change the standard in security systems based on encryption. Thanks to its development and popularity, this project underwent various changes over time, allowing the encryption algorithm to be updated and improved, giving other hash variants such as RIPEMD 160, 256 and 320; Despite the fact that almost 3 decades have passed since their development, these algorithms are very safe and reliable even by current standards and it is very common for them to be used in open source software systems.
  • Hash SHA: It is the most widely used standard in the field of Cryptography and security of computer systems today. It was developed in 1993 by an internal project of the National Security Agency or NSA of the United States, so far SHA and all its derivatives are considered the most reliable and secure Cryptographic algorithms; and it is so far the most secure algorithm of all. In addition, thanks to this standard, the security system that Bitcoin currently has SHA.256 was devised.


How Cryptocurrency encryption technology works

Hash functions operate thanks to a complex system of mathematical and logical processes that are responsible for converting base information into a unique code that represents said information. Sometimes these mathematical processes are implemented or executed within a software or program to be used within a computer system.

The basic idea of ​​encryption by means of Hashes is that thanks to these programs any series of data or information can be taken and encryption processes applied, where the previously entered data will be subjected to the algorithms within the computer program, once completed the process we will obtain a string of characters with a fixed length, this length depends on the Hash function that is applied in the process.

Thanks to this conversion process to which the data is subjected, it makes said result in Hash practically impossible to convert again. That is to say, it is virtually impossible to convert a Hash code into the original data, since these systems were designed to be used in only one direction.

An example of how the conversion process works through SHA-256 when encrypting information:

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SHA-256: 763a0794524f886734b0d71424c474108361234991c6c184b0072f4d5a7ced45

Although it is almost the same text, except that one letter is omitted at the end, we can see that the Hash code in SHA-256 changes.

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SHA-256: 7e4b1e441464fd7f8fd500c7db5e398d76022fb90c3c993f0a9d7ef99d41d331

The process of conversion or encryption of information in Cryptocurrencies is carried out within the Blockchain network thanks to the computational power of the miners, in a Cryptocurrency the information that is used within said process is all the information referring to the transactional data that is stored in a block, such as the number of coins being sent, the date, the address of the person receiving, the address of the person sending, among other technical data.

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Not in the slightest, hash technology is used in countless computer security and communication processes globally, it is true that these processes became popular thanks to Cryptocurrencies such as Bitcoin, but this technology was not used for the first time in Cryptocurrencies anymore. that its first use was to authenticate electronic documents.

This is due to the fact that this technology is the most powerful encryption hash function currently known, and also due to its one-way characteristic, it does not allow a Hash to be converted back into the original information, giving anonymity and maximum information security.

No, it is true that many Cryptocurrencies make use of the SHA-256 Hash function but this is because many of them are copies or use the Bitcoin code as a base, but there are many other popular Cryptocurrencies that make use of other encryption algorithms.

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