What is a Bitcoin hash function?

A Bitcoin hash function is a core component of the Bitcoin network's underlying technology, known as blockchain. In Bitcoin, transactions are grouped into blocks, and each block contains a cryptographic hash of the previous block, creating a chain of blocks. This is where the term "blockchain" originates.

The hash function used in Bitcoin is SHA-256 (Secure Hash Algorithm 256-bit). It takes an input (data of any size) and produces a fixed-size output (256 bits or 64 characters in hexadecimal format).

Bitcoin miners compete to solve a complex mathematical problem that involves finding a hash value that meets a specific criteria set by the network, known as the "proof of work." This involves repeatedly hashing the block's data with different nonce values until a hash is found that meets the difficulty target. Once a miner finds such a hash, they can broadcast the block to the network, and if other nodes verify that the hash is valid, the block is added to the blockchain, and the miner is rewarded with newly created bitcoins and transaction fees.

The hash function is crucial for ensuring the security and immutability of the blockchain, as any change to the data within a block would result in a completely different hash value, making it computationally infeasible to alter past transactions without being detected.