What Is a Hash Collision and Is It a Threat to Blockchain Security?

A hash collision occurs when two different inputs produce the exact same hash output. For the cryptographic hash functions used in blockchains, like SHA-256, collisions are theoretically possible but statistically improbable to the point of being practically impossible with current technology.

If a collision were found, it could potentially allow an attacker to substitute a fraudulent transaction for a legitimate one without changing the block's hash. However, the strength of modern hash algorithms makes this threat negligible for the foreseeable future.