SHA-256

SHA-256, or Secure Hash Algorithm 256-bit, is a cryptographic hash function developed by the National Security Agency (NSA) and widely used in various security protocols, including blockchain technology. This algorithm takes input data of any size and processes it into a fixed 256-bit hash value, ensuring that the output is both unique and irreversible. In the context of Bitcoin and other cryptocurrencies, SHA-256 is integral to the creation of secure digital signatures, which verify transactions on the blockchain and ensure the immutability of data.

In Bitcoin, SHA-256 is employed in the proof-of-work (PoW) consensus mechanism, where miners compete to solve cryptographic puzzles by hashing transaction data until they find a hash that meets the network's difficulty target. This process, known as mining, ensures the integrity and security of the blockchain by preventing unauthorized changes to the ledger. Once a miner successfully solves the puzzle, the resulting hash is used to validate the new block of transactions, which is then added to the blockchain.