SHA-256

Bitcoin uses SHA-256 because it offers an ideal combination of proven security, computational efficiency, and widespread cryptographic analysis. When Satoshi Nakamoto created Bitcoin in 2008, SHA-256 was already well-established and trusted by security professionals worldwide, having undergone extensive cryptographic scrutiny without practical weaknesses being found. The algorithm is fast enough for efficient transaction verification while remaining computationally intensive enough for secure proof-of-work mining. SHA-256's 256-bit output provides astronomical collision resistance—finding hash collisions would require more computational power than exists on Earth. Bitcoin could theoretically change its hash function through a hard fork (protocol upgrade requiring network consensus), but this would only happen if serious cryptographic vulnerabilities were discovered in SHA-256, which is extremely unlikely given decades of analysis by thousands of security experts. Changing hash functions would be a massive undertaking affecting miners, wallets, and all Bitcoin infrastructure, so it would only occur for critical security reasons. The cryptocurrency community closely monitors cryptographic research and would have significant warning before any hash function became vulnerable.

Bitcoin mining requires massive computing power because miners must perform trillions of SHA-256 hash calculations per second to find valid blocks, and this computational race consumes significant electricity. Modern Bitcoin mining uses specialized hardware called ASICs (Application-Specific Integrated Circuits) designed exclusively for SHA-256 calculations, capable of performing over 100 trillion hashes per second per machine. The entire Bitcoin network performs approximately 400-600 exahashes per second (400-600 quintillion hashes per second) as of 2024. This computational intensity exists because Bitcoin's difficulty adjustment algorithm automatically increases mining difficulty as more computing power joins the network, maintaining an average 10-minute block time. The energy consumption isn't a flaw—it's a security feature. This computational work makes attacking Bitcoin prohibitively expensive because an attacker would need to match or exceed the entire network's hash rate, requiring billions of dollars in hardware and electricity. The high energy requirements are what makes Bitcoin's proof-of-work consensus secure and trustless. However, this has led to valid environmental concerns and ongoing debates about sustainable energy sources for mining operations.

Quantum computers pose less threat to SHA-256 than to other cryptographic components of Bitcoin, and practical threats remain decades away at minimum. SHA-256 and other hash functions are relatively quantum-resistant compared to signature algorithms like ECDSA. While quantum computers could theoretically use Grover's algorithm to search hash outputs faster than classical computers, this would only reduce SHA-256's effective security from 256 bits to 128 bits—still far beyond practical breaking capability. Breaking 128-bit security would require quantum computers orders of magnitude more powerful than anything currently existing or theoretically possible in the near future. For perspective, current quantum computers have fewer than 1,000 stable qubits, while breaking even 128-bit security might require millions of stable, error-corrected qubits working in coordination for extended periods. The cryptocurrency community has decades of warning before quantum computing becomes a practical threat to SHA-256. Additionally, if quantum computing did advance sufficiently, Bitcoin could upgrade to quantum-resistant hash functions like SHA-3 through a network consensus upgrade. The greater quantum threat to Bitcoin involves signature algorithms, which are more vulnerable than hash functions and would likely be addressed first.