What is a Bitcoin hash and SHA-256


You may have heard the term hash or SHA-256, but what do they actually mean? In order to decide
which block of transactions will be entered next to the blockchain some sort of contest is held
between the miners. They all get a riddle to solve, but you can’t actually
solve this riddle logically, you have to guess the answer. Imagine that you are miner, and each time you want to
enter your block into the blockchain and get a reward you would be given a combination lock and would need to guess the combination
in order to enter your block. Now let’s say that
your computing power or hash rate is the number of combinations
you can guess in a second. So the more computing power you have
the faster you’d guess the combination. Since the Bitcoin network
wants to keep the time between blocks created
in the blockchain constant, as more miners or computing power
are added to the network it will become harder to
guess the combination. Just imagine that as more and more people
try and guess the combination, you will be given locks with
more possible combinations. A hash is just a method used to
guess the combination for the lock. It’s used by turning
a random large number into a smaller number
by taking certain actions. So for example, let’s say that each time
you guess the lock’s combination you would randomly pick a large number and take the first, middle
and last numbers from it. If this doesn’t work you will randomly pick a different
large number and guess again. Of course the miner’s’ calculations
are much more complex but the idea is that you decide on
a certain method of action for guessing and execute it until you get the answer. The SHA-256
or “secure hash algorithm 256”, is just a specific way of hashing. The same way we could have named
our previous example for hashing the “99Bitcoins hashing method”. Using hashing helps the Bitcoin network
stay immuned to alteration and fraud – but more about that in a later video. For more information
visit 99Bitcoins.com, all the information you need
to get started with Bitcoin today.

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