How Does the Hash Output Size Relate to the Security Level?

A larger hash output size directly increases the security level of a cryptocurrency. This is because a larger output, measured in bits, creates a vastly larger set of possible hash values.

Consequently, it becomes exponentially more difficult for an attacker to find two different inputs that produce the same hash, an attack known as a collision. For robust security against such attacks, a hash function's output size must be large enough to make brute-force attempts computationally infeasible.

Therefore, a larger hash output provides stronger protection against fraudulent activities.