What Is the Difference between a Signature Algorithm and a Hashing Algorithm?
A hashing algorithm (like SHA-256) is a one-way function that transforms data of any size into a fixed-length output (the hash or digest). Its purpose is data integrity.
A signature algorithm (like ECDSA) is a two-part cryptographic scheme involving a private key to create a signature and a public key to verify it. Its purpose is authentication and non-repudiation.
A signature algorithm typically uses a hashing algorithm as a component.
Glossar
Authentication
Verification ⎊ Authentication within cryptocurrency, options trading, and financial derivatives represents a critical process confirming the legitimacy of a user, device, or transaction prior to granting access or executing an operation.
Digital Signature
Authentication ⎊ A digital signature, within cryptocurrency, options trading, and financial derivatives, functions as cryptographic attestation of a transaction’s origin and integrity, ensuring non-repudiation for the signatory.
Private Key
Ownership ⎊ The private key is the definitive proof of non-custodial ownership over the associated cryptocurrency or the collateral securing a derivative position.
Signature Algorithm
Validation ⎊ Refers to the mathematical procedure used to confirm that a submitted signature corresponds to the sender's public key and the transaction data.
Cryptographic Scheme
Scheme ⎊ A cryptographic scheme, within the context of cryptocurrency, options trading, and financial derivatives, represents a formalized, mathematically rigorous protocol designed to achieve specific security objectives.
Hashing Algorithm
Cryptography ⎊ Hashing algorithms, within cryptocurrency and derivatives, function as deterministic functions transforming variable-sized inputs into fixed-size outputs ⎊ hashes ⎊ critical for data integrity and security.