Close Navigation

Hash Function

Trading Term

A hash function is a cryptographic algorithm that converts any input (like a transaction or file) into a fixed-length string of numbers and letters, called a hash. Hashes are deterministic (the same input always produces the same output), but even tiny changes in the input produce completely different hashes. In crypto, hash functions secure blockchains by linking blocks together, ensuring data integrity.

For example, Bitcoin uses SHA-256 (Secure Hash Algorithm 256-bit); each block’s hash confirms the transactions in that block and connects it to the previous block.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.