What Is SHA-256 — and Why Is It Important?

Security is an important selling point of any alt coin or cryptocurrency. Like any investment, you need to know outside forces won’t unfairly manipulate the value of your purchase. At Aureus, security is something we take extremely seriously. We designed our product to be a transparent, reliable choice for both newcomers to alternative currencies and longtime investors. The key to this is our use of the SHA-256 hash function. Here’s what that means for you, and why it’s important.


What Is a Hash Function?

A hash function is an algorithm that takes input data of any length and transforms it into output with a fixed size and value. When used as a cryptographic tool, it prevents hackers from obtaining damaging information. For example, hash functions are often used to protect user information in a password database — if the database is hacked, the hacker will only be able to access the hashed values, rather than the passwords themselves.

Hash functions have many uses in information security. They comprise a variety of algorithms, each of which has unique properties and potential applications.


What Is SHA-256?

SHA-256 is a cryptographic hash function originally developed by the U.S. National Security Agency (NSA). It is part of the larger SHA-2 (Secure Hash Algorithm) family of functions. SHA-256 is unique in that it employs 32-bit words in the encryption process. It’s known for its collision resistance — or its ability to reduce the likelihood that two distinct inputs will produce the same hash values. SHA-2 improves on the flaws of its predecessor, SHA-1, which was found to be significantly easier to crack. It’s no longer recommended for applications in which collision resistance is essential to security.


What Does SHA-256 Have to Do With Cryptocurrency?

SHA-256 serves two primary functions for cryptocurrencies and alt coins: verifying transactions and calculating proof-of-work systems. The importance of secure, verified transactions should be obvious. For those new to alt coins, however, proof-of-work is a concept that may require some unpacking.

Proof-of-work systems were initially developed to prevent spam and denial-of-service attacks on websites. However, with the rise of electronic currency, they are increasingly being used for mining. Mining is the process of releasing more coins into circulation by unlocking “blocks” of transaction records. Proof-of-work systems confirm blocks require sufficient effort to unlock, thus ensuring the overall integrity of the system. More complicated proof-of-work-systems — based on more complex hash functions — mean more stable and reliable currency.



SHA-256, Bitcoin and Aureus

The Bitcoin cryptocurrency network uses a variant of the hashcash proof-of-work verification system, which features two SHA-256 hashes. The system’s difficulty level is periodically reassessed to ensure miners unlock blocks at an average rate of no more than six per hour.

As a Bitcoin-backed cryptocurrency, Aureus coins have been premined using the standard SHA-256 hash function. This helps keep your funds secure and provides a measure of confidence you can trust. You’ll also benefit from Aureus’ low fees, fast transactions and monthly dividend program. To learn more, keep browsing our website or contact our team directly.

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