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Hashing Explained: An Essential Guide for Crypto Enthusiasts

Updated: Nov 18


In the world of computer science and especially cybersecurity, hashing has become a foundational pillar. It’s a powerful tool used daily without most people even knowing. If someone sends a secure email or trades crypto, hashing is playing a crucial behind-the-scenes role. Let's break down what it is and explore why it's become so vital.


What is Hashing?


Hashing transforms data of any size (like your password, a document, or even a movie) into a unique code through a hash function. This code is called a "hash" or "hash value," which acts like a digital fingerprint for your data. The hash will always be a fixed size.


For example, the SHA-256 cryptographic hash algorithm takes any input data and transforms it into a unique 64-character code, regardless of the input size. You could enter a four-letter word or the entire Harry Potter book series into SHA-256, and it will result in a 64-character code. You can even experiment with this using a SHA-256 generator!



Why Hash? What are the Benefits?


Hashing offers significant advantages in data management and security. It's much more efficient to use a short, fixed-size hash key to find data in a hash table instead of searching through the entire input data. This makes hashing essential for indexing and retrieving data in databases.


Hashing also plays a critical role in ensuring data integrity and security. It's used for password security, digital signatures, file verification, and many other crucial technologies we rely on daily.


Let's explore some of these applications in more detail.


Use Cases of Hashing


Protecting Your Passwords

Imagine websites storing everyone’s passwords in plain text. This would pose an enormous security risk, making it easy for hackers to gain access to sensitive information. Websites mitigate this risk by using hashing to store passwords securely.


When you create an account, your password is immediately hashed, and only the hash value is stored. During login, the entered password is hashed, and the resulting hash is compared to the stored one. If they match, it confirms you've entered the correct password.


This approach ensures that even if a data breach occurs, hackers will only find hash values instead of actual passwords. Since hashing is designed to be a one-way function, it's extremely difficult to reverse-engineer a hash back to the original password.


Ensuring File Integrity

Consider downloading a large program or an important document. How can you be sure that the file hasn't been tampered with during transmission? Data can become corrupt accidentally or intentionally. Hashing offers a solution by generating a unique hash of the file before it's sent.


Once you receive the file, you can use the same hash function to create a hash of the received file. Compare this generated hash to the original hash provided by the sender. If the hashes match, it means the file hasn't been altered during transmission.


Hashing is very sensitive to changes. Even modifying a single character within a document will result in a different hash output, making it easy to detect tampering. This sensitivity makes hashing essential for data integrity. Many websites and software developers provide the expected hash alongside the downloadable file, allowing you to verify the file's integrity quickly.


Digital Signatures

In today's digital world, we often rely on emails and other forms of electronic communication, especially for important documents like contracts. Digital signatures provide a way to verify the sender's authenticity and ensure the integrity of the signed document.


Digital signatures utilize sophisticated hashing algorithms and cryptography. A unique hash of the document is created and then encrypted using the sender's private key. The recipient receives the signature, decrypts it using the sender's public key, and retrieves the original document's hash.


The recipient then generates a new hash of the received document and compares it with the decrypted hash. A match confirms the document's integrity and authenticity, proving it hasn't been altered in transit and originated from the holder of the private key, the intended sender.


The Foundation of Blockchains

Hashing forms the bedrock of many blockchain technologies, including Bitcoin and Ethereum. Blockchain relies on decentralized ledgers to maintain a secure and transparent record of transactions. Each block added to the blockchain contains transaction data linked to the previous blocks.


To ensure these blocks are in the correct order and haven't been tampered with, each block gets a unique hash. Since hashing is a one-way function, any modification to a block would result in a completely different hash, disrupting the entire chain. Attempting to modify a past transaction in the Bitcoin blockchain would create a hash mismatch, immediately alerting the network.


This tamper-proof characteristic makes blockchain technology highly resistant to fraud. Blockchain's secure nature, driven by hashing, is being explored for applications beyond cryptocurrency, such as supply chain tracking, secure storage of medical records, and more. Blockchain technologies leverage hashing's strength for secure and transparent data management.


Digging Deeper: Hashing Algorithms & Properties


While "hash function" is a general term, there are various hashing algorithms used in practice. Each has strengths, weaknesses, and suitability depending on its intended use. Examples include the Secure Hashing Algorithms (SHA) family, such as SHA-1, SHA-256, and SHA-512. Other algorithms, like MD5 (Message Digest 5), are considered less secure and are mainly found in legacy systems. Additionally, there are algorithms like SipHash, xxHash, MetroHash, and SipHash1-3. Regardless of the algorithm, good cryptographic hash functions share key properties:


  • Determinism: The same data input into a hash function will always produce the same hash output, ensuring reliability.

  • One-wayness: It should be easy to calculate the hash value from the input data, but computationally infeasible to reverse the process and derive the original data from the hash. This property makes it extremely difficult to determine the input data from its hash value.

  • Collision-resistance: Given the vast possibilities of input data and fixed-size hash outputs, it's theoretically possible for different inputs to produce the same hash, known as a collision. However, good hash functions make collisions incredibly difficult to find. They ensure that finding two different inputs that generate the same hash would require an impractical amount of computational power, making such collisions nearly impossible to exploit in practice.


Conclusion


While hashing may seem like a complex concept, it ultimately simplifies digital security and reliability. From everyday file sharing to the complexities of bitcoin transactions, hashing helps keep integrity and authenticity. It ensures data remains unchanged, communication originates from trusted sources, and sensitive information stays protected.


FAQ

What do you mean by hashing?

Hashing transforms data of any length into a short, fixed-size string called a hash or hash value. Hash functions, the special algorithms performing this transformation, guarantee each output is unique to the input. This process ensures data integrity and security by creating a "digital fingerprint" of the data.

What is hashing in cybersecurity?
What is Hashing vs. encryption?
What are examples of hashing?
Disclaimer

The information contained herein has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for financial, legal, or investment advice. Wirex and any of its respective employees and affiliates do not provide financial, legal, or investment advice.


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