# Understanding the hash function used by the blockchain technology

How is blockchain algorithm put into operation. Blockchain Technology is one of the most emerging Technologies of the decade. It has proved to provide Real-world solutions to a number of problems. It is able to find applications in almost all the fields. But most importantly it has affected the financial and business economy by providing a whole new set of decentralized cryptocurrencies.

The blockchain technology actually works on the proof of work concept and distributed ledger Technology. They both are implemented in order to provide security to the system.

## Hash function or SHA 256 – blockchain algorithm

One of the most important function that the blockchain network uses, in order to provide security to itself, is the **hash functions**, specifically SHA-256.

Hash Function is basically an algorithm which takes the input of any size but gives an output of fixed size. Depending on the size of the input the input is either squeezed or expanded in order to make the output of the desired size. The implementation of this particular **algorithm in the blockchain technology** is when one needs to generate a particular Hash of a block which contains a large amount of information like the transactions, the user ids, and the public keys which are basically nothing but characters.

This is necessary because we need to compare the blocks in the future and also to check if the block has been tampered with or not. Also, we need to take the hash of a particular block as an input to the next block in order to generate its hash.

## Miners – blockchain algorithm

The miners run this particular Hash algorithm in a set of a large number of transactional records in order to generate a particular Hash. This set of records from a single block. Then the miners need to solve the **complex algorithms** and when they successfully do it they are permitted to add their particular block in the **blockchain** which is verified by the other miners in the network. It is also to be kept in mind that as the number of miners in the network increases the difficulty of the complex mathematical problem also increases exponentially and the reward for adding a particular block to the blockchain keeps decreasing.

The transactions which are contained in a single block are said to have happened at the same time and the transactions which are not yet added to the blocks are said to be unconfirmed. Each and every node in the network has the authority to group a set of unconfirmed transactions and suggest it’s addition to the block. But since there are a huge number of nodes and each and every node of the **network** can suggest the blockchain, so how does the blockchain decide which particular block to accept. This is decided based on which particular node solves the complex mathematical problem posed by the blockchain to them which is created by an irreversible **cryptographic Hash Function**. At this point in time, a typical computer would take years together to calculate or specifically guess the result. Hence these days specialized circuit board is used to solve the algorithms.

## Complex blockchain algorithm

As the difficulty of the solving Complex algorithm increases with increase in the number of nodes, the people, intelligently have started to come together and act as a single node but dividing the number of guesses that each particular one does working themselves. In this way the difficulty level of the complex algorithm is not increased by the addition of a number of nodes, also there is the higher probability of finding the solution and they share the reward within themselves. Such systems are called as **mining pools**. Some of the mind phones have become so large that they constitute almost 20% of the total mining done on the network. If at all in future if this percentage reaches up to 50% then it is a great threat to the whole network as they can manipulate or tamper the data easily as they would have gained control over 50% of the total network.

Currently, the **Bitcoin** reward is around 12.5 Bitcoin. It is estimated that over a span of 4 years the reward will keep decreasing by a factor of 2. A number of different algorithms have been put forward in order to overcome the drawback that Bitcoin possesses. The proof of stake concept is one of the best examples. With the efforts to make the Bitcoin network more secure, the hackers and the criminal minds somehow find a way to dodge them.