How Does a Hash Function Differ from an Encryption Algorithm?
A hash function is a one-way mathematical process that converts data of any size into a fixed-size string of characters (the hash). It is irreversible; you cannot get the original data back from the hash.
An encryption algorithm is a two-way process that scrambles data (plaintext) into an unreadable format (ciphertext) using a key, which can then be reversed (decrypted) back into the original data using the correct key.
Glossar
Encryption
Cryptography ⎊ Encryption is the mathematical process of encoding information, known as plaintext, into an unreadable format, or ciphertext, using an algorithm and a cryptographic key.
Hash Function
Computation ⎊ A hash function, within cryptocurrency, options trading, and financial derivatives, serves as a deterministic algorithm mapping data of arbitrary size to a fixed-size output, crucial for data integrity and security.
Encryption Algorithm
Process ⎊ An encryption algorithm is a deterministic mathematical process that transforms plaintext data into an unreadable ciphertext using a cryptographic key.