What is Hashing in Blockchain?

February 3, 2023

When you upload your identity documents to the ShareRing Vault, your information is hashed onto the ShareLedger blockchain to keep it secure. Hashing protects the integrity of your private information. But what does that mean?

A good analogy is a fingerprint. Your fingerprint is unique and can be traced to you by matching it with your finger. On its own, nobody could know whose fingerprint it is. 

In the same way, hashing can be used to work out who owns a piece of data without revealing whose data it is. The process of hashing gives blockchain its impeccable security and is an essential element of blockchain management. 

What is a hash function?

A hash is a mathematical function that takes a readable input such as text (in this case, the data on your identity documents) and converts it into an unreadable string of bytes with a fixed length (typically 64 digits). The output created by a hash function is called the ‘hash value,’ ‘hash code,’ or simply ‘hash.’ Because the hash value is always the same length, it’s extremely difficult for hackers to work out how long or short the input data was – adding another layer of security.

A hash function has many important properties. It must be: 

  • Deterministic. That means every time you enter a particular input, it will always produce the same hash value. 
  • Preimage resistant. This means the output reveals no information about the input.
  • Collision resistant. This means it must be impossible for two different inputs to produce the same output.

Together, these three characteristics are the fundamental elements that ensure a hash function is doing its job correctly.

Unlike encrypted data, it is near-impossible to convert hashed data back into readable content. However, every time you hash a piece of data, its output is identical. This makes it easy to confirm the original data has not been tampered with or altered in any way – minimizing the risk of identity fraud.

What else can a hash function do?

  • Store passwords: When you type your password into a web service, the server can run a hash function to check that your password matches the saved one. Even if the database of stored hashes is hacked, it remains secure because there is no way for a hacker to work out a password from a hash. 
  • Bitcoin mining: Hash functions also form an essential part of the Bitcoin protocol and are used to write new transactions in the blockchain through the mining process. This ensures the entire chain is legitimate, and every coin can be traced back to when it was mined.
  • Sending and receiving crypto: Hash functions are used to create private and public keys, used to send and receive cryptocurrency. These typically come in pairs, connected by a hash function. This means you can share your public key with others, or post it online, and your private key remains safe.

  • Linking the blockchain: Hashes connect the ‘blocks’ in a blockchain to each other and create the ‘chain’ – making the blockchain secure and immutable. Hashing every block to the next one creates a hash pointer. Looking at the hash pointers means every transaction in the entire chain can be traced back to the start, ensuring that the chain has not been tampered with.  

ShareRing Vault is hashed onto ShareLedger

In ShareRing Vault, your data is not stored in a centralized database that can be accessed by third parties. There’s no information on the cloud for hackers to access, either. When you put your identity documents in your ShareRing Vault, you can relax knowing it’s hashed and unreadable by anyone but you. We put control of your data back in your hands. 

Minimize the risk of identity fraud to protect your digital footprint and reputation. Find out more about ShareRing Vault here.

From the ShareRing Blog

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