How Does Hashing Compare to Traditional Methods like Notarization for Contract Integrity?
Hashing provides a faster, universally verifiable, and cryptographically stronger method for proving contract integrity than traditional notarization. Notarization relies on the trust of a third-party authority and physical or digital stamps.
Hashing provides a mathematical proof that the data has not changed since the hash was generated. This allows for automated, peer-to-peer verification without a trusted intermediary, which is fundamental to decentralized finance (DeFi).
Glossar
Hashing
Cryptography ⎊ Hashing functions are foundational to the security of cryptocurrency systems, providing a deterministic transformation of input data into a fixed-size output, crucial for block creation and transaction verification.
Contract Integrity
Audit ⎊ The immutability of the underlying code allows for pre-execution auditing of the financial terms, a critical step for ensuring that derivative contracts function as intended under all market conditions.