Close Navigation

SHA-256

Trading Term

SHA-256 stands for “Secure Hash Algorithm 256-bit”, a cryptographic hash function widely used in blockchain networks. It takes any input—like a transaction or file—and produces a fixed 256-bit (64-character) output called a hash. SHA-256 is deterministic, irreversible, and collision-resistant, meaning the same input always produces the same hash, it’s practically impossible to reverse the hash to the original input, and no two different inputs should produce the same hash. In blockchain, SHA-256 secures transactions and links blocks together, making tampering extremely difficult.

For example, Bitcoin uses SHA-256 to hash every transaction and block. If someone tries to change a past transaction, the hash changes, breaking the chain and alerting the network. SHA-256 is also used in Bitcoin mining to solve Proof-of-Work puzzles.

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.