What is SHA-256? How does it work?

In the context of the Secure Hash Algorithm (SHA) family of algorithms, of which SHA 256 is a subset, SHA 2 refers to a specific version of the algorithm. The NSA and NIST collaborated on a 2001 publication to provide a new hashing algorithm to replace the SHA 1 family, which was becoming increasingly vulnerable to brute-force attacks.

The number “256” in the name refers to the length of the resulting hash digest, which is fixed at 256 bits regardless of the length of the input plaintext or cleartext.

SHA 256 is the most similar of the other algorithms in the SHA family.

Now, you might be wondering, what is the use case of this?

How is SHA encryption used?

Digital signatures, S/MIME email certificates, PGP, and IPsec are just some of the many security protocols and applications that rely on SHAs. For some uses by the United States government, such as the protection of secret information, this form of encryption is often mandated by law. Companies that make browsers, like Google, Microsoft, and Mozilla, have begun advising their customers to switch to SHA-3 and abandon the older SHA-1.

In the SSL/TLS protocol, SHAs serve as the hashing method for digital signatures, making them one of the protocol’s most critical functions.

Security Sockets Layer (SSL) and Transport Layer Security (TLS) are cryptographic protocols developed to encrypt data in transit between clients and servers in an online environment. TLS/SSL certificates are an X.509 certificate subtype that verifies a server’s identity to a client browser.

The purpose of this certificate is not just to authenticate the distant server that the client browser talks with, but also to verify the server’s identity. Key information about the web server and its associated files are documented there. Certificates must be valid and contain the necessary DNS information to establish a secure SSL/TLS session.

Uses of SHA-256 in Blockchain

For example, Bitcoin, Bitcoin Cash, and Bitcoin SV all use SHA-256 as a hashing algorithm, making it one of the first and most widely used in blockchain technology. The most popular uses of SHA-256 in a blockchain are:

Bitcoin’s consensus method relies on miners adjusting the nonce value in a block until the resulting SHA-256 hash is below a certain threshold. Afterward, the ledger can incorporate that block.
Ledger entries are organized as chains of blocks, with each block including a hash computed using SHA-256 that references the entry before it in the chain.
Transaction information is hashed with SHA-256 and then encrypted with the sender’s private key to create a digital signature, ensuring the authenticity of the transaction. This signature is then checked by the miner to ensure the legitimacy of the transaction.

History of SHA Algorithms

The National Security Agency (NSA) developed the standard for secure hash algorithms (SHA) (NSA). The algorithm was patented by the United States government, and then made available to the public under a license that did not require payment of any kind. The hashing algorithms employed today are one-way functions, meaning they are only intended to be processed in one direction and would be too time-consuming to reverse engineer if utilized in any other.

In 1993, SHA-0 was the pioneering hashing algorithm. In 1995, SHA-1 was introduced; despite having been broken, it remains in widespread use. SHA 256 is one of six hash algorithms in the SHA-2 family, which was made public in 2001.

  • SHA 224
  • SHA 256
  • SHA 384
  • SHA 512
  • SHA 512/224
  • SHA 512/256

Hash values are generated using a different set of cryptographic hash algorithms in each member of the family. The hash value in SHA 256 consists of 256 bits (equal to 32 bytes). Six unique hash functions were created by varying the number of rounds, shift amounts, and additive constants (more on that in a moment).

How does SHA-256 work?

For the sake of clarity, we will not go into great depth regarding SHA 256. But if we step back and look at the big picture, we can see what’s going on. FIPS-180 explains that SHA algorithms consist of two main phases:

In preprocessing, the message is padded, split into smaller chunks, and initialization settings are established.
Calculating a hash value is a procedure that requires multiple steps and ends in a string of hash values. The final 256-bit hash digest is computed from all of these smaller hash values.

The steps of SHA 256 are as follows.

  • Initially, information is transformed into binary. The use of 0s and 1s to represent information is called binary coding. The letter “a” is represented as “01000001” in this simple programming language.
  • Each 512-bit section of binary information represents a separate entity. 512 bytes will be “padded” onto the end of the block if it is smaller than that. If it’s more than 512 bits long, it will be divided into smaller chunks. (Padding is applied to the last block to make it exactly 512 bits if it isn’t already.)
  • Messages are broken down into 32-bit chunks for easier handling.
  • There are 64 rounds of compression functions performed, during which the hash values created above are swapped around in a predetermined sequence and new information is appended to the hash.
  • Combining the results of several procedures yields a new hash value.
  • The final round of SHA 256 generates a hash digest with a length of 256 bits.


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