What Is the Minimum Acceptable Hash Output Size for a Secure Modern Cryptocurrency?

Most modern, secure cryptocurrencies, including Bitcoin and Ethereum, use hash functions with an output size of at least 256 bits. While a 128-bit hash is technically possible, it is generally considered insufficient for long-term security due to the Birthday Paradox.

A 256-bit hash provides an effective security level of 128 bits against collision attacks, which is currently the industry standard.