Hash: The Magic Behind Bitcoin That You Probably Didn't Understand

Forget the boring theory. A hash is basically a transformation machine: you input data of any size, and you get a fixed-size code that is always the same. Change one letter in your input, and the code changes completely. Input the same thing 1000 times, and you get the same result. Deterministic, predictable, unbreakable.

Why does Bitcoin need this?

The magic is that it is very easy to create a hash FROM data, but impossible to do the opposite ( guessing what data created that hash ). It's like a door that only opens in one direction.

In Bitcoin, miners basically play this game: “Find a secret number that, when hashed, the result starts with X zeros”. They can try millions of times per second, but only the one who finds it first “wins” the block. If the price of Bitcoin goes up, more miners enter, increasing the total hashing power (hash rate), and Bitcoin automatically makes it harder (adds more required zeros). This way, a new block is maintained every ~10 minutes. Ingenious, right?

The Three Properties That Cannot Be Broken

1. There are no easy collisions: Two different pieces of data producing the same hash is mathematically so difficult that it would take millions of years.
2. Irreversible: Viewing a hash and guessing the original data is impossible ( that's why hashed passwords in databases cannot be “decrypted”).
3. There is no shortcut: Even if you know a previous hash, it does not help you manipulate the next one.

The Reality

SHA-256 is the algorithm that Bitcoin uses. SHA-1 and SHA-0 are already broken (they found collisions). Now they only trust SHA-2 and SHA-3. Each block of Bitcoin is connected to the previous one through these hashes, creating a chain that is practically impossible to alter.

Without hash, there is no blockchain. Simple as that.