What is a hash function? How SHA-256 keeps blockchains honest
By SendPay Business · · 2 min read
A hash function takes any input, from one letter to a whole file, and turns it into a short fixed-length string called a hash. Good hash functions are one of the building blocks of blockchains, passwords and secure payments.
What makes a good hash
- Same input, same hash, every time.
- Fixed length: SHA-256 always gives 256 bits, written as 64 hexadecimal characters.
- One way: you can't work out the input from the hash.
- Avalanche effect: change one character and the hash changes completely.
- Collision resistant: it is practically impossible to find two inputs with the same hash.
How Bitcoin uses SHA-256
Each Bitcoin block includes the hash of the block before it, chaining them together, so changing an old block would change every later hash and be spotted. Miners hash block headers over and over, changing a number each time, until they find a hash below the network's target. That work is the proof in proof of work.
Other everyday uses
Websites store hashes of passwords rather than the passwords themselves. Software downloads publish hashes so you can check a file hasn't been altered. Transaction IDs on blockchains are hashes of the transaction data.
Hashing is not encryption
Encryption is designed to be reversed by whoever has the key. Hashing is designed never to be reversed. That's why a hash can prove data hasn't changed without revealing the data itself.
Where SendPay fits
SendPay platforms let customers buy, sell and hold crypto, held with regulated partners, alongside GBP, EUR and USD accounts, powered by licensed partners. SendPay doesn't offer trading tools, DeFi or lending.
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SHA-256 hash generator →What is a blockchain?
A shared record of transactions, chained together by hashes.
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This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.